Hudbay Minerals Inc. ("Hudbay" or the "company") (TSX, NYSE:HBM) today released its second quarter 2022 financial results. All amounts are in U.S. dollars, unless otherwise noted.
Strong Operating and Financial Results
Atico Mining Corporation (TSX.V: ATY | OTCQX: ATCMF) (the "Company" or "Atico") reports a land slide in the vicinity of its operations and most importantly, no injuries occurred as a result of this incident.
On April 1st the landslide occurred in the vicinity of our dewatering plant causing minor equipment damage resulting in a pause in operations. The Company is very pleased to report that there were no injuries as a result of this incident. The operations team estimates that it will take approximately two to three weeks for repairs and circuit testing to take place, at which point, we plan to resume full operations.
The Company, will not be adjusting its 2022 annual guidance as it anticipates that it will be able to make up lost time throughout the remainder of the year.
About Atico Mining Corporation
Atico is a growth-oriented Company, focused on exploring, developing and mining copper and gold projects in Latin America. The Company generates significant cash flow through the operation of the El Roble mine and is developing it's high-grade La Plata VMS project in Ecuador. The Company is also pursuing additional acquisition of advanced stage opportunities. For more information, please visit www.aticomining.com.
ON BEHALF OF THE BOARD
Fernando E. Ganoza
CEO
Atico Mining Corporation
Trading symbols: TSX.V: ATY | OTCQX: ATCMF
Investor Relations
Igor Dutina
Tel: +1.604.633.9022
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
No securities regulatory authority has either approved or disapproved of the contents of this news release. The securities being offered have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the ''U.S. Securities Act''), or any state securities laws, and may not be offered or sold in the United States, or to, or for the account or benefit of, a "U.S. person" (as defined in Regulation S of the U.S. Securities Act) unless pursuant to an exemption therefrom. This press release is for information purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any securities of the Company in any jurisdiction.
Cautionary Note Regarding Forward Looking Statements
This announcement includes certain "forward-looking statements" within the meaning of Canadian securities legislation. All statements, other than statements of historical fact, included herein, without limitation the use of net proceeds, are forward-looking statements. Forward- looking statements involve various risks and uncertainties and are based on certain factors and assumptions. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company's expectations include uncertainties relating to interpretation of drill results and the geology, continuity and grade of mineral deposits; uncertainty of estimates of capital and operating costs; the need to obtain additional financing to maintain its interest in and/or explore and develop the Company's mineral projects; uncertainty of meeting anticipated program milestones for the Company's mineral projects; the world-wide economic and social impact of COVID-19 is managed and the duration and extent of the coronavirus pandemic is minimized or not long-term; disruptions related to the COVID-19 pandemic or other health and safety issues, or the responses of governments, communities, the Company and others to such pandemic or other issues; and other risks and uncertainties disclosed under the heading "Risk Factors" in the prospectus of the Company dated March 2, 2012 filed with the Canadian securities regulatory authorities on the SEDAR website at www.sedar.com
Volcanogenic massive sulphide (VMS) deposits are some of the world’s most prosperous base metal and precious metal deposits. This type of deposit is found across the globe, and often forms in clusters. The oldest known VMS deposits date back three billion years, and new ones are still being formed. VMS deposits have impressive mineralization and high grades, but only 2.2 percent of world gold production and 6 percent of copper production currently comes from VMS deposits.
Atico Mining (TSXV:ATY,OTC:ATCMF), operating in Colombia and Ecuador, has two projects that are VMS style surrounded by large land packages. Such strategic positioning gives Atico the potential to mimic successes seen with the Fortuna Silver Mines (TSX:FVI,NYSE:FSM), a company with an estimated market cap of US$2 billion that was founded by the team currently leading Atico.
“We have a very strong production profile along with a pipeline of growth prospects for a small company. And we generate a robust free cash flow from which we can finance all of our exploration plans,” commented Igor Dutina, the company’s Corporate Development lead.
The stable mining jurisdictions of Latin America have proven to be a premier place for acquisition and mining development for Atico. The company is also looking at avenues of growth in the possible acquisition of a third project.
The company’s flagship El Roble mine in Colombia has proven to be an extremely valuable asset. The gold-copper mine generates roughly 21 million pounds of copper and 11,000 ounces of gold per year with a life of mine of about four years. This VMS asset primes the company to achieve the mid-tier producer level Atico intends on reaching.
The company’s second asset, the La Plata project in Ecuador, is a pre-development stage asset with a mineralized profile containing high-grade gold, copper, zinc and silver. Past exploration campaigns and a completed PEA have also aided in pushing along this highly prospective asset’s advancement. With 60 percent ownership of the project and an earn-in option of up to 75 percent, the future of La Plata has tremendous exploration and development potential.
In December 2020, Atico Mining announced the closing of US$6.5 million of its unsecured convertible debenture private placement. This news follows its report announcing US$5 million in income from mining operations a month earlier. The company intends to use funds and proceeds from the offering to further advance its La Plata project, including a full feasibility study delivered by mid 2022.
Atico Mining has a world-class team of mine developers and mine operators. With several generations of mining in Latin America and extensive experience in the industry and regional networking sectors, this team understands the mining industry. Moving into 2021, Atico intends to generate significant cash flow at the El Roble mine and explore its highly prospective VMS targets.
Atico’s El Roble mine is the only copper mine currently in production in Colombia. Under-explored until 1990, the 6,355 hectare asset has processed approximately 1.8 million tonnes of primarily pyrite-chalcopyrite ore with an average grade of 2.67 percent copper and an approximate grade of 2.63 g/t gold. Currently, the mine has an 850 tonne per day throughput capacity and 15 prospective geochemical VMS exploration targets that extend over 10 kilometers across the property.
The land package, which is located in Carmen de Atrato, also leverages a strategically positioned infrastructure with proximity to paved roads, a power grid and established mine and plant facilities on site. As of January 2021, the company owns 90 percent of the operating mine and surrounding claims.
Future plans for the project include a continued focus on drilling into recently discovered resources and mineralization exploration along the strike’s depth. With the impressive cluster profile of VMS deposits, El Roble has the potential to generate significant cash flow and shareholder returns for the company as production advances. The current available free cash flow stands at approximately US$13 million.
This Noranda/Kuroko-type VMS deposit hosts nine priority exploration targets over a land package that spans 2,300 hectares near Quito, Ecuador. Surrounded by large Atico-controlled land packages, the property operates in an investor-friendly jurisdiction with governmental mining support. It hosts an infrastructure with high road accessibility and good natural resource networks.
This pre-development asset hosts the characteristic VMS cluster profiling which reinforces the prospect of further nearby deposits and significant exploration potential. Currently, La Plata has prospective resources of 1.9 million tonnes at 12.9 grams per tonne gold equivalent mineralization. Historic resources based on past drilling campaigns are estimated at 913,977 tonnes graded at 8.01 g/t gold and 5.01 percent copper. High-grade silver, lead and zinc have also been found along the over 9 kilometers of favorable strike geology on the property.
Atico Mining has been quick to begin exploring and developing this exciting project after its acquisition in late 2019. By 2022, the company intends on completing a full feasibility study for the project and to prepare the asset for the initial development of prospective targets.
Fernando E. Ganoza has over 15 years of management experience in Latin America, including key roles in developing mines in Peru and Mexico as the project manager and country manager for Canada-based producer Fortuna Silver Mines Inc.
He has strategic planning and business development experience with Cargill, at which he participated in the valuation and structuring of deals with a cumulative value of over US$350 million. Fernando holds a BSc. in Mining Engineering from the Universidad de Antofagasta in Chile and an MBA from the Darden School of Business at the University of Virginia.
Luis D. Ganoza has held the position of CFO in Fortuna Silver Mines Inc. since 2006 and has over 12 years of experience in the financial management of public mining companies. He has participated in debt and equity financings for mining projects in Peru and Mexico for over C$120 million. Luis has a B.Sc. in Mining Engineering from the Universidad Nacional de Ingenieria in Peru; an MBA from ESAN, a Tier 1 Latin American Business School; and an M.Sc. in Accounting and Finance from The London School of Economics.
Jorge Ganoza has over 40 years of experience in the Latin American mining industry, holding senior leading roles in the founding and development of private and public mining companies.
For the past six years, he has held the position of VP of Operation in Fortuna Silver Mines Inc. Jorge has a B.Sc. in Engineering from the Universidad Nacional La Molina and also completed advanced finance studies at the Escuela Superior de Administration, ESAN, in Peru. Jorge is a third-generation miner from a Peruvian family that has owned and operated underground gold, silver and base metal mines in Peru and Panama.
Alain Bureau has over 25 years of leadership in project management, operating in North and Latin American countries gained through notable projects including mines in Peru, Chile, Mexico, Panama and Canada.
Joseph A. Salas has 20 years of experience in exploration, mine geology, project evaluation and development with vast expertise in gold-copper and copper-molybdenum porphyries in Colombia and Peru.
For the past three years, he has held the position of Exploration Country Manager in Colombia for Barrick Gold Corporation. From 1996 to 2002, he worked in various exploration positions of increasing responsibility for Anglo American. Joseph has a B. Sc. in Geological Engineering from the Universidad Nacional de San Agustín de Arequipa in Peru and is affiliated with the Society of Economic Geologists Inc.
Matias Herrero is a Canadian chartered accountant, with 15 years of progressive senior level experience as a mining professional in various areas including finance, mergers and acquisitions, international arbitration, treasury management, risk management, regulatory compliance, and multi-jurisdictional public company reporting. Prior to joining Atico, Mr. Herrero served as the CFO before becoming the CEO of Gold Springs Resource Corp. Prior to that, he served as the CFO of a gold producer in South America.
He began his career with PricewaterhouseCoopers and gained experience working in senior management roles in publicly-traded companies with gold projects in North America, South America, and Africa. Mr. Herrero earned a bachelor’s degree in accounting from the University of Belgrano in Buenos Aires, Argentina, he is fluent in English and Spanish and holds a CPA in both Colorado and Washington.
Igor Dutina has an extensive background in financial and capital market analysis, with more than 12 years of experience in the mineral exploration and mining industry, working with several publicly listed companies.
Hole ID | From (m) | To (m) | Interval (m) | Cu (%) | Au (g/t) | Ag (g/t) |
ATDHAR-02 | 7.2 | 56.0 | 48.8 | nsr | Anomalous | |
ATDHAR-03 | 239.5 | 242.0 | 2.5 | nsr | Anomalous | |
ATDHAR-04 | 296.0 | 303.7 | 7.7 | nsr | Anomalous | |
ATDHAR-05 | 2.2 | 5.5 | 3.3 | 1.00 | 0.88 | 3.9 |
ATDHAR-08 | 157.2 | 160.2 | 3.0 | 1.17 | 2.24 | 6.59 |
ATDHAR-09 | 18.0 | 20.8 | 2.8 | 2.39 | 1.69 | 6.5 |
ATDHAR-10 | 2.5 | 8.0 | 5.5 | 1.27 | 0.17 | 6.66 |
nsr – No Significant Result |
El Roble Mine
The El Roble mine is a high grade, underground copper and gold mine with nominal processing plant capacity of 800 tonnes per day, located in the Department of Choco in Colombia. Its commercial product is a copper-gold concentrate.
Since obtaining control of the mine on November 22, 2013, Atico has upgraded the operation from a historical nominal capacity of 400 tonnes per day.
El Roble has a measured and indicated resource of 1.87 million tonnes grading 3.46% copper and 2.27 g/t gold, at a cut-off grade of 0.93% copper equivalent. Mineralization is open at depth and along strike and the Company plans to further test the limits of the resource.
On the larger land package, the Company has identified a prospective stratigraphic contact between volcanic rocks and black and grey pelagic sediments and cherts that has been traced by Atico geologists for ten kilometers. This contact has been determined to be an important control on VMS mineralization on which Atico has identified numerous target areas prospective for VMS type mineralization occurrence, which is the focus of the current surface drill program at El Roble.
Qualified Control
Dr. Demetrius Pohl, Ph.D., AIPG Certified Geologist, a qualified person under NI 43-101 standards and independent of the Company, is responsible for ensuring that the information contained in this news release is an accurate summary of the original reports and data provided to or developed by Atico Mining Corporation. Dr. Pohl has approved the scientific and technical content of this news release.
About Atico Mining Corporation
Atico is a growth-oriented Company, focused on exploring, developing and mining copper and gold projects in Latin America. The Company operates the El Roble mine and is pursuing additional acquisition opportunities. For more information, please visit www.aticomining.com.
ON BEHALF OF THE BOARD
Fernando E. Ganoza, CEO
Atico Mining Corporation
Trading symbols: (TSX VENTURE:ATY)(OTC PINK:ATCMF)
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
No securities regulatory authority has either approved or disapproved of the contents of this news release. The securities being offered have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or any state securities laws, and may not be offered or sold in the United States, or to, or for the account or benefit of, a “U.S. person” (as defined in Regulation S of the U.S. Securities Act) unless pursuant to an exemption therefrom. This press release is for information purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any securities of the Company in any jurisdiction.
Cautionary Note Regarding Forward Looking Statements
This announcement includes certain “forward-looking statements” within the meaning of Canadian securities legislation. All statements, other than statements of historical fact, included herein, without limitation the use of net proceeds, are forward-looking statements. Forward- looking statements involve various risks and uncertainties and are based on certain factors and assumptions. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company’s expectations include uncertainties relating to interpretation of drill results and the geology, continuity and grade of mineral deposits; uncertainty of estimates of capital and operating costs; the need to obtain additional financing to maintain its interest in and/or explore and develop the Company’s mineral projects; uncertainty of meeting anticipated program milestones for the Company’s mineral projects; and other risks and uncertainties disclosed under the heading “Risk Factors” in the prospectus of the Company dated March 2, 2012 filed with the Canadian securities regulatory authorities on the SEDAR website at www.sedar.com.
Click here to connect with Atico Mining Corporation (TSXV:ATY) to receive an Investor Presentation.
Source: www.marketwired.com
Second Quarter Summary of Financial Results
Q2 2017 | Q2 2016 | % Change | |
Revenue | $ 14,074,005 | $ 3,659,067 | 285% |
Cost of sales | (10,001,505) | (3,661,942) | 173% |
Income (loss) from mining operations | 4,072,500 | (2,875) | 141,752% |
As a % of revenue | 29% | 0% | 36,928% |
Selling, general and administrative expenses | 1,647,562 | 1,468,159 | 12% |
Income (loss) from operations | 2,320,219 | (1,619,135) | 137% |
As a % of revenue | 16% | -44% | 137% |
Income (loss) before income taxes | 1,767,112 | (1,715,008) | 203% |
Net income (loss) | 615,847 | (1,413,402) | 144% |
As a % of revenue | 4% | -39% | 111% |
Operating cash flow before changes in non-cash operating working capital items(1) | $ 4,640,042 | $ 29,543 | 15,606% |
Second Quarter Operations Review
During the quarter, the Company produced 5.2 million pounds (“lbs”) of copper, 2,570 ounces (“oz”) of gold, and 10,005 oz of silver. When compared to Q2-2016, production increased 8% for copper and decreased 13% for gold. The increase in copper produced is mainly explained by an 8.5% increase in the copper head grade slightly offset by a 2% decrease in processed material. In the case of gold, a decrease of 5.9% in the head grade along with the lower processed material and a 5% decrease in metal recovery explain the lower production.
Cash costs(1) for the period were $115.37 per tonne of processed ore, and $1.30 per pound of payable copper produced, a 28% and 35% increase over the same period last year, respectively. The increase in the cash cost per pound of payable copper net of by products is mainly explained by the increase in the cost per processed tonne and a 19% decrease in the gold credit driven by a lower gold-to-copper production ratio to Q2-2016. All-in sustaining cash cost per payable pound of copper produced(1)(2) was $1.96.
Despite the cash cost per pound of payable copper produced decrease of 8% in Q2-2017 relative to the previous quarter (Q1-2017 – $1.41), the operating cost was higher than anticipated by the Company. A 14% decrease in milling and distribution cost this quarter was completely offset by a 3% increase in the mining and indirect cost relative to the previous quarter.
At the mine, efforts made by the Company to reduce the cemented backfill unit cost were successful in Q2-2017 and were reduced by 11% relative to Q1-2017, but were offset by a 9% increase in the quantity of cubic meters backfilled during the same period. In addition, there was a 25% increase in preparation laboring (from 312 m in Q1-2017 to 389 m in Q2-2017) and a 32% increase in ground support cost due to poor ground conditions in level 1722.
The Company is taking additional cost reduction measures for the remaining quarters of 2017.
Second Quarter Operational Details
Q2 2017 | Q2 2016 | % Change | |
Production (Contained in Concentrate)(3) | |||
Copper (000s lbs) | 5,154 | 4,786 | 8% |
Gold (oz) | 2,570 | 2,948 | -13% |
Silver (oz) | 10,005 | 9,953 | 1% |
Mine | |||
Tonnes of material mined | 65,942 | 63,112 | 4% |
Mill | |||
Tonnes processed | 62,802 | 64,246 | -2% |
Tonnes processed per day | 794 | 814 | -2% |
Copper grade (%) | 3.94 | 3.62 | 9% |
Gold grade (g/t) | 2.07 | 2.20 | -6% |
Silver grade (g/t) | 9.96 | 8.03 | 24% |
Recoveries | |||
Copper (%) | 94.4 | 93.0 | 2% |
Gold (%) | 61.8 | 65.0 | -5% |
Silver (%) | 49.9 | 59.8 | -17% |
Concentrates | |||
Copper Concentrates (DMT) | 10,460 | 10,718 | -2% |
Copper (%) | 22.3 | 20.3 | 10% |
Gold (g/t) | 7.6 | 8.6 | -12% |
Silver (g/t) | 29.7 | 28.9 | 3% |
Payable copper produced (000s lbs) | 4,897 | 4,547 | 8% |
Cash cost per pound of payable copper ($/lbs)(1)(2) | 1.30 | 0.96 | 35% |
The financial statements and MD&A are available on SEDAR and have also been posted on the company’s website at http://www.aticomining.com/
El Roble Mine
The El Roble mine is a high grade, underground copper and gold mine with nominal processing plant capacity of 800 tonnes per day, located in the Department of Choco in Colombia. Its commercial product is a copper-gold concentrate.
Since obtaining control of the mine on November 22, 2013, Atico has upgraded the operation from a historical nominal capacity of 400 tonnes per day.
El Roble has a measured and indicated resource of 1.87 million tonnes grading 3.46% copper and 2.27 g/t gold, at a cut-off grade of 0.93% copper equivalent. Mineralization is open at depth and along strike and the Company plans to further test the limits of the resource.
On the larger land package, the Company has identified a prospective stratigraphic contact between volcanic rocks and black and grey pelagic sediments and cherts that has been traced by Atico geologists for ten kilometers. This contact has been determined to be an important control on VMS mineralization on which Atico has identified numerous target areas prospective for VMS type mineralization occurrence, which is the focus of the current surface drill program at El Roble.
Qualified Person
Mr. Thomas Kelly (SME Registered Member 1696580), advisor to the Company and a qualified person under National Instrument 43-101 standards, is responsible for ensuring that the technical information contained in this news release is an accurate summary of the original reports and data provided to or developed by Atico.
About Atico Mining Corporation
Atico is a growth-oriented Company, focused on exploring, developing and mining copper and gold projects in Latin America. The Company operates the El Roble mine and is pursuing additional acquisition opportunities. For more information, please visit www.aticomining.com.
ON BEHALF OF THE BOARD
Fernando E. Ganoza
CEO
Atico Mining Corporation
Trading symbols: TSX.V: ATY | OTC: ATCMF
Investor Relations
Igor Dutina
Tel: +1.604.633.9022
(1) Alternative performance measures; please refer to “Non-GAAP Financial Measures” at the end of this release.
(2) Net of by-product credits
(3) Subject to adjustments on final settlement
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
No securities regulatory authority has either approved or disapproved of the contents of this news release. The securities being offered have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the ‘‘U.S. Securities Act’’), or any state securities laws, and may not be offered or sold in the United States, or to, or for the account or benefit of, a “U.S. person” (as defined in Regulation S of the U.S. Securities Act) unless pursuant to an exemption therefrom. This press release is for information purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any securities of the Company in any jurisdiction.
Cautionary Note Regarding Forward Looking Statements
This announcement includes certain “forward-looking statements” within the meaning of Canadian securities legislation. All statements, other than statements of historical fact, included herein, without limitation the use of net proceeds, are forward-looking statements. Forward- looking statements involve various risks and uncertainties and are based on certain factors and assumptions. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company’s expectations include uncertainties relating to interpretation of drill results and the geology, continuity and grade of mineral deposits; uncertainty of estimates of capital and operating costs; the need to obtain additional financing to maintain its interest in and/or explore and develop the Company’s mineral projects; uncertainty of meeting anticipated program milestones for the Company’s mineral projects; and other risks and uncertainties disclosed under the heading “Risk Factors” in the prospectus of the Company dated March 2, 2012 filed with the Canadian securities regulatory authorities on the SEDAR website at www.sedar.com
The Company has not based its production decisions and ongoing mine production on mineral reserve estimates, preliminary economic assessments or feasibility studies, and historically such projects have increased uncertainty and risk of failure. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
Non-GAAP Financial Measures
The items marked with a “(1)” are alternative performance measures and readers should refer to Non-GAAP Financial Measures in the Company’s Management’s Discussion and Analysis for the three months ended March 31, 2017 as filed on SEDAR and as available on the Company’s website for further details.
Atico Mining Corp.
Suite # 501
543 Granville St.
Vancouver, BC
V6C 1X8
Tel: +1.604-633-9022
Click here to connect with Atico Mining Corporation (TSXV:ATY) to receive an Investor Presentation.
Source: aticomining.com
Atico Mining Corp.
Suite # 501
543 Granville St.
Vancouver, BC
V6C 1X8
Tel: +1.604-633-9022
Source: aticomining.com
Click here to connect with Atico Mining Corporation (TSXV:ATY) to receive an Investor Presentation.
Source: www.marketwired.com
Atico Mining Corporation (the “Company” or “Atico”)(TSXV:ATY) announces its operating results for the three months ended June 30, 2017 from its El Roble mine. Production for the quarter totaled 5.15 million pounds of copper and 2,570 ounces of gold in concentrates, an increase of 8% for copper and a decrease of 13% for gold over the same period in 2016.
“We are very pleased to report a strong operating quarter maintaining steady state production levels and remaining in line to reach operational objectives for 2017.” said Fernando E. Ganoza, CEO. “For the remainder of the year, the Company will continue focusing on the regional and mine vicinity exploration programs with four rigs currently drilling on surface and underground.”
Second Quarter Operational Highlights
Second Quarter Operational Review
Processed ore was in line with Company budget for the second quarter. The increase in higher copper output for the quarter relative to Q2-2016 is explained by a higher copper head grade and an increase in copper recovery. In the case for gold production, a planned lower head grade and a decrease in the gold recovery resulted in lower gold output over Q2-2016.
Copper recoveries were higher than the same period last year, while gold recoveries during the quarter were in line with Company projections. Gold recovery decreased slightly as expected driven by a 10% increase in the copper content in the concentrate to 22.34% (20.30% in Q2-2016). This increase in the copper content in the concentrate provides a net economic benefit offsetting the resulting decrease in gold recovery. The Company will continue to explore increasing the copper content in the concentrate in the following quarters while increasing the gold recovery.
The operation remains on track to deliver on set guidance throughout the remainder of the year.
Second Quarter Operational Details
Q2 2017 Total | Q2 2016 Total | % Change | |
Production (Contained in Concentrates) | |||
Copper (000s pounds) | 5,154 | 4,786 | 8% |
Gold (ounces) | 2,570 | 2,948 | -13% |
Mine | |||
Tonnes of ore mined | 65,942 | 63,112 | 5% |
Mill | |||
Tonnes processed | 62,802 | 64,246 | -2% |
Tonnes processed per day | 794 | 814 | -3% |
Copper grade (%) | 3.94 | 3.62 | 9% |
Gold grade (g/t) | 2.07 | 2.20 | -6% |
Recoveries | |||
Copper (%) | 94.4 | 93.0 | 2% |
Gold (%) | 61.8 | 65.0 | -5% |
Concentrates | |||
Copper and Gold Concentrates (dmt) | 10,460 | 10,718 | -2% |
Payable copper produced (000s lbs) | 4,897 | 4,547 | 8% |
Note: Metal production figures are subject to adjustments based on final settlement.
El Roble Mine
The El Roble mine is a high grade, underground copper and gold mine with nominal processing plant capacity of 800 tonnes per day, located in the Department of Choco in Colombia. Its commercial product is a copper-gold concentrate.
Since obtaining control of the mine on November 22, 2013, Atico has upgraded the operation from a historical nominal capacity of 400 tonnes per day.
El Roble has a measured and indicated resource of 1.87 million tonnes grading 3.46% copper and 2.27 g/t gold, at a cut-off grade of 0.93% copper equivalent. Mineralization is open at depth and along strike and the Company plans to further test the limits of the resource.
On the larger land package, the Company has identified a prospective stratigraphic contact between volcanic rocks and black and grey pelagic sediments and cherts that has been traced by Atico geologists for ten kilometers. This contact has been determined to be an important control on VMS mineralization on which Atico has identified numerous target areas prospective for VMS type mineralization occurrence, which is the focus of the current surface drill program at El Roble.
Qualified Person
Mr. Thomas Kelly (SME Registered Member 1696580), advisor to the Company and a qualified person under National Instrument 43-101 standards, is responsible for ensuring that the technical information contained in this news release is an accurate summary of the original reports and data provided to or developed by Atico.
About Atico Mining Corporation
Atico is a growth-oriented Company, focused on exploring, developing and mining copper and gold projects in Latin America. The Company operates the El Roble mine and is pursuing additional acquisition opportunities. For more information, please visit www.aticomining.com.
ON BEHALF OF THE BOARD
Fernando E. Ganoza
CEO
Atico Mining Corporation
Trading symbols: TSX.V: ATY | OTC: ATCMF
Investor Relations
Igor Dutina
Tel: +1.604.633.9022
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
No securities regulatory authority has either approved or disapproved of the contents of this news release. The securities being offered have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the ‘‘U.S. Securities Act’’), or any state securities laws, and may not be offered or sold in the United States, or to, or for the account or benefit of, a “U.S. person” (as defined in Regulation S of the U.S. Securities Act) unless pursuant to an exemption therefrom. This press release is for information purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any securities of the Company in any jurisdiction.
Cautionary Note Regarding Forward Looking Statements
This announcement includes certain “forward-looking statements” within the meaning of Canadian securities legislation. All statements, other than statements of historical fact, included herein, without limitation the use of net proceeds, are forward-looking statements. Forward- looking statements involve various risks and uncertainties and are based on certain factors and assumptions. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company’s expectations include uncertainties relating to interpretation of drill results and the geology, continuity and grade of mineral deposits; uncertainty of estimates of capital and operating costs; the need to obtain additional financing to maintain its interest in and/or explore and develop the Company’s mineral projects; uncertainty of meeting anticipated program milestones for the Company’s mineral projects; and other risks and uncertainties disclosed under the heading “Risk Factors” in the prospectus of the Company dated March 2, 2012 filed with the Canadian securities regulatory authorities on the SEDAR website at www.sedar.com
The Company has not based its production decisions and ongoing mine production on mineral reserve estimates, preliminary economic assessments or feasibility studies, and historically such projects have increased uncertainty and risk of failure. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
Non-GAAP Financial Measures
The items marked with a “(1)” are alternative performance measures and readers should refer to Non-GAAP Financial Measures in the Company’s Management’s Discussion and Analysis for the nine months ended September 30, 2016 as filed on SEDAR and as available on the Company’s website for further details.
Click here to connect with Atico Mining Corporation (TSXV:ATY) to receive an Investor Presentation.
Source: aticomining.com
Copper producer Austral Resources Australia Ltd (ASX:AR1) (“Austral” or the “Company”) is pleased to announce the completion of a maiden Mineral Resource for the Enterprise deposit within EPM 17527 in Austral’s Eastern Succession tenement package.
Highlights:
The Enterprise deposit was originally discovered and initially drilled out by CST Minerals’ Lady Annie Exploration Pty Ltd (“CST”) in 2015 and 2016. Further work planned by CST was not completed due to budget constraints.
Today’s maiden Mineral Resource is classified as Inferred and reflects the broad 40m by 120m drill hole spacing.
Austral has completed the maiden Mineral Resource estimate originally planned by CST to determine the next phase of resource definition infill drilling.
The maiden Mineral Resource estimate, along with preliminary mining studies has indicated the potential for a small sulphide open pit mine with toll treatment potential at one of several regional copper processing mills.
The Enterprise Mineral Resource warrants further work including drilling to test depth potential and infill current drill spacing, metallurgical evaluation and the measurement of density.
Click here for the full ASX Release
This article includes content from Austral Resources, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
Hudbay Minerals Inc. ("Hudbay" or the "company") (TSX, NYSE:HBM) today released its second quarter 2022 financial results. All amounts are in U.S. dollars, unless otherwise noted.
Strong Operating and Financial Results
Executing on Growth Initiatives
"Our operating performance was strong during the second quarter with higher consolidated copper and gold production and lower consolidated cash costs," said Peter Kukielski, President and Chief Executive Officer. "This was a result of a continuous focus on operating efficiencies which has allowed us to reaffirm our production and operating cost guidance for 2022. We have seen steady performance from our operations in Peru and the New Britannia mill in Manitoba achieved higher than expected throughput. We are advancing a pre-feasibility study to evaluate project optimization opportunities on the private land plan at our Copper World Complex, and we have been focused on closure activities in Flin Flon and a smooth transition of our workforce to Snow Lake."
1 The preliminary economic assessment for the Copper World Complex is preliminary in nature, includes inferred resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves and there is no certainty the preliminary economic assessment will be realized.
Summary of Second Quarter Results
Consolidated copper production in the second quarter of 2022 was 25,668 tonnes, an increase of 4% compared to the first quarter of 2022 and in line with expected quarterly cadence for the year. Consolidated gold production was 58,645 ounces, an increase of 9% compared to the previous quarter due to higher gold grades in Peru and higher gold output from New Britannia. Consolidated zinc production in the second quarter was 23% lower than the first quarter primarily due to lower tonnes and grades at 777 as the mine approached the end of its mine life and the continued transition toward mining the gold lenses at Lalor with a corresponding decrease of production from the base metal zones.
Consolidated cash cost per pound of copper produced, net of by-product credits i , in the second quarter of 2022 was $0.65, compared to $1.11 in first quarter of 2022. This improvement was a result of higher zinc and gold by-product credits and higher copper production. Consolidated sustaining cash cost per pound of copper produced, net of by-product credits i , was $1.87 in the second quarter of 2022 compared to $2.29 in the first quarter. This decrease was primarily due to the same reasons affecting consolidated cash cost. Both measures were within the 2022 guidance ranges and the company is reaffirming its full year consolidated cash cost guidance. Consolidated all-in sustaining cash cost per pound of copper produced, net of by-product credits i , was $1.93 in the second quarter of 2022, lower than $2.54 in the first quarter of 2022, due to the same reasons outlined above along with lower corporate selling and administrative expenses.
Cash generated from operating activities in the second quarter of 2022 increased to $165.6 million compared to $63.3 million in the first quarter of 2022. The increase is primarily the result of an increase in non-cash working capital, higher realized zinc metal prices and higher copper, gold and zinc sales volumes. Operating cash flow before change in non-cash working capital increased to $123.9 million during the second quarter of 2022, compared to $77.1 million in the first quarter of 2022, primarily due to the same factors above.
Net earnings and earnings per share in the second quarter of 2022 were $32.1 million and $0.12, respectively, compared to net earnings and earnings per share of $63.8 million and $0.24, respectively, in the first quarter. Second quarter earnings benefited from a non-cash gain of $60.7 million mostly related to the quarterly revaluation of the Flin Flon environmental provision, which was impacted by rising long term risk-free discount rates. Given the long-term nature of the reclamation cash flows, the related environmental provision is highly sensitive to changes in long-term risk-free discount rates and, as such, Hudbay may continue to experience quarterly environmental provision revaluations. The quarterly financial results were also negatively impacted by $95.0 million pre-tax impairment loss related to certain specific capitalized costs and assets associated with the previous stand-alone development plan for the Rosemont deposit, which were determined to no longer be recoverable.
Adjusted net earnings i and adjusted net earnings per share i in the second quarter of 2022 were $30.5 million and $0.12 per share, respectively, after adjusting for the non-cash gain related to the revaluation of the environmental provision and the specific asset impairment loss, among other items. This compares to an adjusted net earnings and adjusted net earnings per share of $5.2 million, and $0.02 per share in first quarter of 2022. Second quarter adjusted EBITDA i was $141.4 million, compared to $110.2 million in the first quarter of 2022, primarily as a result of the same factors affecting operating cash flow noted above.
As at June 30, 2022, the company's liquidity includes $258.6 million in cash as well as undrawn availability of $363.6 million under its revolving credit facilities. The company expects that current liquidity combined with cash flow from operations, particularly in the fourth quarter when production in Peru is expected to benefit from higher grades, will be sufficient to meet its liquidity needs for the foreseeable future. As such, Hudbay is well positioned to weather the volatility in commodity prices experienced during the second quarter.
Consolidated Financial Condition ($000s) | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | |
Cash | 258,556 | 213,359 | 270,989 | |
Total long-term debt | 1,182,143 | 1,181,119 | 1,180,274 | |
Net debt 1 | 923,587 | 967,760 | 909,285 | |
Working capital 2 | 180,371 | 161,846 | 147,512 | |
Total assets | 4,382,727 | 4,538,214 | 4,616,231 | |
Equity | 1,601,123 | 1,561,978 | 1,476,828 |
1 Net debt is a non-IFRS financial performance measure with no standardized definition under IFRS. For further information, please see the "Non-IFRS Financial Reporting Measures" section of this news release.
2 Working capital is determined as total current assets less total current liabilities as defined under IFRS and disclosed on the consolidated financial statements
Consolidated Financial Performance | Three Months Ended | |||
Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2021 | ||
Revenue | $000s | 415,454 | 378,619 | 404,242 |
Cost of sales | $000s | 325,940 | 293,351 | 322,060 |
Earnings (loss) before tax | $000s | 21,504 | 88,861 | 14,819 |
Earnings (loss) | $000s | 32,143 | 63,815 | (3,395) |
Basic and diluted earnings (loss) per share | $/share | 0.12 | 0.24 | (0.01) |
Adjusted earnings (loss) per share 1 | $/share | 0.12 | 0.02 | 0.02 |
Operating cash flow before change in non-cash working capital | $ millions | 123.9 | 77.1 | 132.8 |
Adjusted EBITDA 1 | $ millions | 141.4 | 110.2 | 143.2 |
1 Adjusted earnings (loss) per share and adjusted EBITDA are non-IFRS financial performance measures with no standardized definition under IFRS. For further information, please see the "Non-IFRS Financial Reporting Measures" section of this news release.
Consolidated Production and Cost Performance | Three Months Ended | |||
Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2021 | ||
Contained metal in concentrate and doré produced 1 | ||||
Copper | tonnes | 25,668 | 24,702 | 23,474 |
Gold | ounces | 58,645 | 53,956 | 39,848 |
Silver | ounces | 864,853 | 784,357 | 685,916 |
Zinc | tonnes | 17,053 | 22,252 | 21,538 |
Molybdenum | tonnes | 390 | 207 | 295 |
Payable metal sold | ||||
Copper | tonnes | 23,650 | 20,609 | 25,176 |
Gold 2 | ounces | 50,884 | 48,343 | 38,205 |
Silver 2 | ounces | 738,171 | 864,591 | 577,507 |
Zinc 3 | tonnes | 20,793 | 17,306 | 25,361 |
Molybdenum | tonnes | 208 | 213 | 265 |
Consolidated cash cost per pound of copper produced 4 | ||||
Cash cost | $/lb | 0.65 | 1.11 | 0.84 |
Peru | $/lb | 1.82 | 1.54 | 1.85 |
Manitoba | $/lb | (4.48 ) | (0.40) | (3.51) |
Sustaining cash cost | $/lb | 1.87 | 2.29 | 2.25 |
Peru | $/lb | 2.62 | 2.27 | 2.69 |
Manitoba | $/lb | (1.40 ) | 2.33 | 0.36 |
All-in sustaining cash cost | $/lb | 1.93 | 2.54 | 2.48 |
Manitoba gold cash cost per ounce of gold produced 4,5 | ||||
Cash cost | $/oz | (207 ) | 416 | — |
Sustaining cash cost | $/oz | 519 | 1,187 | — |
1 Metal reported in concentrate is prior to deductions associated with smelter contract terms.
2 Includes total payable gold and silver in concentrate and in doré sold.
3 Includes refined zinc metal and payable zinc in concentrate sold.
4 Cash cost, sustaining cash cost and all-in sustaining cash cost per pound of copper produced, net of by-product credits, are non-IFRS financial performance measures with no standardized definition under IFRS. For further information, please see the "Non-IFRS Financial Reporting Measures" section of this news release.
5 Cash cost and sustaining cash cost per ounce of gold produced, net of by-product credits, were introduced in 2022 and do not have a published comparative for 2021.
Peru Operations Review
Peru Operations | Three Months Ended | |||
Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2021 | ||
Constancia ore mined 1 | tonnes | 7,017,114 | 6,908,151 | 8,016,373 |
Copper | % | 0.33 | 0.32 | 0.30 |
Gold | g/tonne | 0.04 | 0.04 | 0.04 |
Silver | g/tonne | 3.53 | 3.22 | 3.02 |
Molybdenum | % | 0.01 | 0.01 | 0.01 |
Pampacancha ore mined 1 | tonnes | 1,211,387 | 847,306 | 982,992 |
Copper | % | 0.29 | 0.27 | 0.26 |
Gold | g/tonne | 0.28 | 0.43 | 0.27 |
Silver | g/tonne | 4.25 | 4.06 | 4.43 |
Molybdenum | % | 0.01 | 0.01 | 0.01 |
Total ore mined | tonnes | 8,228,501 | 7,755,457 | 8,999,365 |
Strip ratio 2 | 1.22 | 1.10 | 0.83 | |
Ore milled | tonnes | 7,770,706 | 7,213,833 | 7,413,043 |
Copper | % | 0.32 | 0.31 | 0.31 |
Gold | g/tonne | 0.09 | 0.08 | 0.07 |
Silver | g/tonne | 3.64 | 3.26 | 2.88 |
Molybdenum | % | 0.01 | 0.01 | 0.01 |
Copper recovery | % | 85.0 | 85.3 | 83.3 |
Gold recovery | % | 60.3 | 59.8 | 62.2 |
Silver recovery | % | 64.2 | 66.9 | 68.2 |
Molybdenum recovery | % | 38.8 | 21.1 | 33.3 |
Contained metal in concentrate | ||||
Copper | tonnes | 20,880 | 19,166 | 19,058 |
Gold | ounces | 13,858 | 10,789 | 10,220 |
Silver | ounces | 584,228 | 505,568 | 468,057 |
Molybdenum | tonnes | 390 | 207 | 295 |
Payable metal sold | ||||
Copper | tonnes | 18,473 | 16,825 | 19,946 |
Gold | ounces | 8,430 | 14,452 | 5,638 |
Silver | ounces | 484,946 | 636,133 | 315,064 |
Molybdenum | tonnes | 208 | 213 | 265 |
Combined unit operating cost 3,4,5 | $/tonne | 12.02 | 12.37 | 10.40 |
Cash cost 5 | $/lb | 1.82 | 1.54 | 1.85 |
Sustaining cash cost 5 | $/lb | 2.62 | 2.27 | 2.69 |
1 Reported tonnes and grade for ore mined are estimates based on mine plan assumptions and may not reconcile fully to ore milled.
2 Strip ratio is calculated as waste mined divided by ore mined.
3 Reflects combined mine, mill and general and administrative ("G&A") costs per tonne of ore milled. Reflects the deduction of expected capitalized stripping costs.
4 Excludes approximately $1.3 million, or $0.16 per tonne, of COVID-related costs during the three months ended June 30, 2022, $2.3 million, or $0.32 per tonne, of COVID-related costs during the three months ended March 31, 2022 and $6.3 million, or $0.85 per tonne, during the three months ended June 30, 2021.
5 Combined unit cost, cash cost and sustaining cash cost per pound of copper produced, net of by-product credits, are non-IFRS financial performance measures with no standardized definition under IFRS. For further information, please see the "Non-IFRS Financial Reporting Measures" section of this news release.
During the first quarter of 2022, the Constancia operations produced 20,880 tonnes of copper, 13,858 ounces of gold, 584,228 ounces of silver and 390 tonnes of molybdenum. Production of all metals was higher than the first quarter of 2022 due to an increase in throughput and milled grades. As previously disclosed, full year production in Peru is expected to benefit from higher grades in the fourth quarter of 2022. As such, full year production of all metals remains on track to achieve guidance ranges for 2022.
Total ore mined slightly declined in the second quarter of 2022 compared to the first quarter of 2022 due to higher amounts of waste being mined. Ore mined from Pampacancha increased in the second quarter as mining rates in the pit returned to normal productivity levels following heavy rains and delays in the water management system earlier in the year. Ore milled during the second quarter of 2022 was higher compared to the previous quarter and copper, gold and silver grades increased over the first quarter of 2022.
Combined mine, mill and G&A unit operating costs i in the second quarter of 2022 were $12.02 per tonne, lower than the first quarter of 2022 primarily due to lower milling costs and higher throughput.
Peru's cash cost per pound of copper produced, net of by-product credits i , in the second quarter of 2022 was $1.82, higher than the previous quarter primarily due to higher mining and general and administrative costs and lower by-product credits, partially offset by lower milling costs. Cash cost per pound of copper produced, net of by-product credits i , is expected to decline with higher expected copper production and contributions from precious metal by-product credits in the fourth quarter. However, full year cash cost is expected to trend towards the upper end of the 2022 guidance range, reflecting the current inflationary cost environment.
Peru's sustaining cash cost per pound of copper produced, net of by-product credits i , in the second quarter of 2022 increased to $2.62, compared to $2.27 in the first quarter, mainly due to the same factors affecting cash cost, and slightly higher sustaining capital expenditures.
Manitoba Operations Review
Manitoba Operations | Three Months Ended | |||
Jun. 30, 2022 | Mar. 31, 2021 | Jun. 30, 2021 | ||
Lalor ore mined | tonnes | 412,653 | 386,752 | 356,951 |
Copper | % | 0.70 | 0.80 | 0.64 |
Zinc | % | 3.06 | 4.06 | 3.81 |
Gold | g/tonne | 3.73 | 3.76 | 3.19 |
Silver | g/tonne | 23.95 | 22.94 | 22.98 |
777 ore mined | tonnes | 226,286 | 258,069 | 255,170 |
Copper | % | 1.03 | 1.19 | 0.82 |
Zinc | % | 3.51 | 4.12 | 3.57 |
Gold | g/tonne | 1.62 | 1.69 | 1.97 |
Silver | g/tonne | 20.63 | 21.05 | 23.35 |
Stall Concentrator & New Britannia Mill: | ||||
Ore milled | tonnes | 406,006 | 397,301 | 317,484 |
Copper | % | 0.73 | 0.82 | 0.68 |
Zinc | % | 3.20 | 4.24 | 4.06 |
Gold | g/tonne | 3.93 | 3.87 | 3.19 |
Silver | g/tonne | 23.98 | 23.16 | 22.02 |
Copper recovery - concentrate | % | 89.5 | 87.5 | 88.8 |
Zinc recovery – concentrate (Stall) | % | 84.3 | 85.7 | 88.1 |
Gold recovery - concentrate | % | 58.8 | 58.4 | 55.5 |
Silver recovery - concentrate | % | 58.1 | 60.0 | 55.1 |
Flin Flon Concentrator: | ||||
Ore milled | tonnes | 243,312 | 254,032 | 329,503 |
Copper | % | 1.02 | 1.20 | 0.89 |
Zinc | % | 3.60 | 4.13 | 3.65 |
Gold | g/tonne | 1.64 | 1.70 | 2.06 |
Silver | g/tonne | 20.76 | 21.23 | 23.65 |
Copper recovery | % | 85.5 | 87.6 | 84.8 |
Zinc recovery | % | 82.9 | 83.2 | 84.8 |
Gold recovery | % | 56.4 | 57.7 | 52.9 |
Silver recovery | % | 51.0 | 52.5 | 37.5 |
Total contained metal in concentrate and doré | ||||
Copper | tonnes | 4,788 | 5,536 | 4,416 |
Zinc | tonnes | 17,053 | 22,252 | 21,538 |
Gold | ounces | 44,787 | 43,167 | 29,628 |
Silver | ounces | 280,625 | 278,789 | 217,859 |
Total payable metal sold | ||||
Copper | tonnes | 5,177 | 3,784 | 5,230 |
Zinc 1 | tonnes | 20,793 | 17,306 | 25,361 |
Gold 2 | ounces | 42,454 | 33,891 | 32,567 |
Silver 2 | ounces | 253,225 | 228,458 | 262,443 |
Combined unit operating cost 3,4 | C$/tonne | 168 | 176 | 148 |
Gold cash cost 4,5 | $/oz | (207 ) | 416 | — |
Gold sustaining cash cost 4,5 | $/oz | 519 | 1,187 | — |
1 Includes refined zinc metal sold and payable zinc in concentrate sold.
2 Includes total payable precious metals in concentrate and in doré sold.
3 Reflects combined mine, mill and G&A costs per tonne of ore milled.
4 Combined unit cost, cash cost and sustaining cash cost per ounce of gold produced, net of by-product credits, are non-IFRS financial performance measures with no standardized definition under IFRS. For further information, please see the "Non-IFRS Financial Reporting Measures" section of this news release.
5 Cash cost and sustaining cash cost per ounce of gold produced were introduced in 2022 and do not have a published comparative.
During the second quarter of 2022, the Manitoba operations produced 44,787 ounces of gold, 17,053 tonnes of zinc, 4,788 tonnes of copper and 280,625 ounces of silver. Gold and silver production increased by 4% and 1%, respectively, while copper and zinc production decreased by approximately 14% and 23%, respectively, compared to the first quarter of 2022. Copper and zinc production declined due to lower grades at Lalor and 777, and precious metals production increased due to higher throughput and recoveries at the New Britannia mill. Full year production of all metals in Manitoba are on track to achieve guidance ranges for 2022.
After 18 years of steady production at the 777 mine in Manitoba, the final reserves were depleted with the last ore hoisted on June 17, 2022, consistent with the mine plan. Closure activities to safely decommission the mine commenced in the second quarter and are advancing ahead of schedule. As 777 mining activities wound down, Hudbay employees and equipment transitioned from 777 to Lalor to support Lalor's ramp-up strategy.
The company continued to advance the Lalor ramp-up strategy and remains on track to achieve 5,300 tonnes per day by the end of 2022. Hudbay also further refined the processes to separate gold and base metal ores from Lalor to optimize feed for the New Britannia and Stall mills. Metal grades form the basis of separating higher gold content ore for processing at New Britannia from base metal ore which is directed towards Stall. Lalor successfully completed planned maintenance in the second quarter to allow for increased availability in the third quarter.
Ore mined at Lalor increased by 7% in the second quarter of 2022, while production at 777 decreased as the mine approached closure in June 2022, resulting in an overall 1% decline in total ore mined in Manitoba compared to the first quarter. Mined zinc and copper grades were lower compared to the first quarter, in line with the mine plan, while precious metal grades remained relatively constant.
The New Britannia mill achieved higher than targeted throughput in the second quarter of 2022, averaging approximately 1,590 tonnes per day, due to a number of improvement initiatives aimed at increasing throughput and further improving recoveries. With the inclusion of doré, the gold and silver recoveries at the New Britannia mill have also improved significantly in relation to previous quarters. Additional improvement initiatives will continue to be advanced in the second half of 2022 to further improve gold and silver recoveries.
The combined Snow Lake mills processed 2% more ore in the second quarter compared to the first quarter of 2022, tracking the increase in Lalor's production over the same period. Stall mill recoveries were consistent with the metallurgical model for the head grades delivered. The Flin Flon concentrator consumed all available ore feed from the 777 mine in the second quarter of 2022. Last ore from 777 was processed on June 21, 2022 and closure activities to safely place the Flin Flon concentrator on long-term care and maintenance are ahead of schedule. Flin Flon mill recoveries were consistent with the metallurgical model for the head grades delivered.
Combined mine, mill and G&A unit operating costs i in the second quarter of 2022 decreased by 5% compared to the first quarter of 2022, mainly due to lower costs at 777 as the mine ceased operations during the quarter, partially offset by higher inflationary cost pressures for bulk commodities, fuel, and Lalor contractor costs. Looking ahead to the second half of 2022, the company expects combined unit operating costs to increase due to ongoing inflationary cost pressures and the removal of the lower-cost Flin Flon operations. As such, Hudbay expects the full year combined unit costs to trend towards the upper end of the 2022 guidance range.
Cash cost per ounce of gold produced, net of by-product credits i , in the second quarter of 2022 was negative $207, lower than the first quarter of 2022 and well below the 2022 guidance range as the operations benefited from higher zinc by-product credits, lower operating costs and higher gold production.
Robust Preliminary Economic Assessment Released for Copper World
In June, Hudbay released the results of the PEA of its 100%-owned Copper World Complex in Arizona, which includes the recently discovered Copper World deposits along with the Rosemont deposit. Highlights of the PEA include:
The preliminary economic assessment for the Copper World Complex is preliminary in nature, includes inferred resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves and there is no certainty the preliminary economic assessment will be realized. For additional details on the Copper World Complex PEA, please refer to the news release dated June 8, 2022 and the NI 43-101 technical report filed on July 14, 2022.
Hudbay is advancing a pre-feasibility study for Phase I of the Copper World Complex during the second half of 2022, which will focus on converting the remaining inferred mineral resources to measured and indicated and evaluating many of the project optimization and upside opportunities.
2 The valuation metrics are based on a preliminary economic assessment that includes an economic analysis of the potential viability of mineral resources. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
Arizona Permitting and Litigation Update
The permitting process for the Copper World Complex is expected to require state and local permits for Phase I and federal permits for Phase II. On May 23, 2022, the U.S. District Court for the District of Arizona issued a favourable ruling effectively stating that there is no obligation for the Army Corps of Engineers ("ACOE") to include Phase I of the project as part its NEPA federal review of the previous standalone Rosemont project design. Furthermore, on May 12, 2022, a decision from the 9 th Circuit Court of Appeals clarified the permitting path for Phase II, including the requirements to receive federal permits for the second phase under existing mining regulations. Hudbay expects it will be able to pursue and obtain federal permits for Phase II within the constraints imposed by the Court's decision.
On July 27, 2022, Hudbay received approval from the Arizona State Mine Inspector for its amended Mined Land Reclamation Plan ("MLRP") for the Copper World Complex. The MLRP was initially approved in October 2021 and was subsequently amended to reflect a larger private land project footprint. Hudbay expects to submit applications for the other key state-level permits for Phase I of the Copper World Complex in the second half of 2022.
777 Mine Closure
On June 17, 2022, mining activities at Hudbay's 777 mine in Flin Flon, Manitoba concluded after the reserves were depleted following 18 years of steady production. The 777 deposit was a large and rich orebody and for many years was the flagship mine of Hudbay's Manitoba operations. The mine commenced production in 2004 with an initial ten-year mine life, operated steadily and successfully expanded reserves by an additional eight years. After extensive drilling in and around the mine in recent years, no new deposits were identified. The company's hydrometallurgical zinc facility in Flin Flon will also be closed after more than 25 years of successful operations. The 777 mine and the zinc plant are scheduled to be safely decommissioned by September 2022. The Flin Flon concentrator and tailings impoundment area will be shifted to care and maintenance to provide optionality should another mineral discovery occur in the Flin Flon area. Hudbay strives to achieve closure practices that align with leading standards and has developed stringent and detailed environmental plans to manage water and the remaining infrastructure and processing plants in Flin Flon.
Closure activities at the 777 mine and zinc plant have commenced and employees and equipment are transitioning to Hudbay's operations in Snow Lake, Manitoba as part of Lalor's mine ramp-up strategy.
19 th Annual Sustainability Report
In June, Hudbay released its annual sustainability report, which provides transparency and progress on key accomplishments and initiatives in 2021 along with goals for the upcoming year and long-term future. Hudbay believes global demand for the metals that it mines will continue to rise alongside the need for green technology that will play an essential role in meeting the challenge of climate change.
Hudbay is committed to a reduced GHG emissions future and is currently working toward specific emissions reduction targets to align with the global 2030 and 2050 climate change goals. The company is also designing the Copper World Complex in Arizona in compliance with 2030 and 2050 GHG objectives. In 2021, to better understand the nature of the company's GHG footprint and the best options for approaching and achieving sustainable GHG reductions, it began work on a 10-year Greenhouse Gas Reduction Roadmap. The roadmap will identify key sources of emissions, including Scope 3 emissions, and the nature of the changes – operational or technical – that will be required to make full or significant changes in each source area.
As a member of the Mining Association of Canada, Hudbay implements the Towards Sustainable Mining ("TSM") Protocols at all of its operations, with the goal to maintain a score of "A" or higher for all protocols. In 2021, the company achieved a rating of "AA" across all TSM tailings management protocol indicators in both Manitoba and Peru. Hudbay also saw a 7% decrease in energy intensity per tonne of ore processed, and over 50% of its indirect energy consumption was from renewable sources.
Exploration Update
Peru Regional Exploration
Hudbay controls a large, contiguous block of mineral rights with the potential to host mineral deposits within trucking distance of the Constancia processing facility, including the past producing Caballito property and the highly prospective Maria Reyna property. Discussions with the community of Uchucarcco related to a surface rights exploration agreement on the Maria Reyna and Caballito properties are progressing well. The company expects to finalize an agreement in the coming weeks before commencing field exploration activities. Finalization of the Uchucarcco agreement is expected to increase community investment costs in the second half of 2022.
The company is compiling results from recent drilling at the Llaguen copper porphyry target in northern Peru and remains on track to complete an initial inferred mineral resource estimate in the third quarter of 2022.
Manitoba Regional Exploration
Hudbay has been actively conducting drilling activities in Manitoba with success in identifying extensions of the copper-gold rich feeder zone at the 1901 deposit and compiling results from ongoing infill drilling at Lalor.
Arizona Regional Exploration
A majority of the infill drilling to support the pre-feasibility study for the Copper World Complex has been completed, and in July, Hudbay reduced the number of drill rigs at site to three. Ongoing drilling will focus on continued confirmatory drilling in support of future feasibility studies.
Nevada Regional Exploration
A conductivity-resistivity IP ground survey will be conducted in the second half of 2022 at the Mason Valley properties located on private land claims near the Mason project. This work, in combination with a re-interpretation of geological data from past operating mines and previous exploration data, will be used to finalize a drill plan to test high grade skarn targets. The drilling program initially planned for late 2022 has been postponed to a later date considering the recent changes in the metal price environment.
Dividend Declared
A semi-annual dividend of C$0.01 per share was declared on August 8, 2022. The dividend will be paid out on September 23, 2022 to shareholders of record as of September 2, 2022.
Website Links
Hudbay:
www.hudbay.com
Management's Discussion and Analysis:
http://www.hudbayminerals.com/files/doc_financials/2022/Q2/MDA222.pdf
Financial Statements:
http://www.hudbayminerals.com/files/doc_financials/2022/Q2/FS222.pdf
Conference Call and Webcast
Date: | Tuesday, August 9 2022 |
Time: | 8:30 a.m. ET |
Webcast: | www.hudbay.com |
Dial in: | 1-416-915-3239 or 1-800-319-4610 |
Qualified Person and NI 43-101
The technical and scientific information in this news release related to the company's material mineral projects has been approved by Olivier Tavchandjian, P. Geo, Vice President, Exploration and Technical Services. Mr. Tavchandjian is a qualified person pursuant to NI 43‑101.
Mineral resources that are not mineral reserves do not have demonstrated economic viability. The Copper World Complex PEA is preliminary in nature, includes inferred resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves and there is no certainty the PEA will be realized.
For a description of the key assumptions, parameters and methods used to estimate mineral reserves and resources at Hudbay's material properties, as well as data verification procedures and a general discussion of the extent to which the estimates of scientific and technical information may be affected by any known environmental, permitting, legal title, taxation, sociopolitical, marketing or other relevant factors, please see the technical reports for the company's material properties as filed by Hudbay on SEDAR at www.sedar.com .
Non-IFRS Financial Performance Measures
Adjusted net earnings (loss), adjusted net earnings (loss) per share, adjusted EBITDA, net debt, cash cost, sustaining and all-in sustaining cash cost per pound of copper produced, cash cost and sustaining cash cost per ounce of gold produced and combined unit cost are non-IFRS performance measures. These measures do not have a meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other issuers. These measures should not be considered in isolation or as a substitute for measures prepared in accordance with IFRS and are not necessarily indicative of operating profit or cash flow from operations as determined under IFRS. Other companies may calculate these measures differently.
Management believes adjusted net earnings (loss) and adjusted net earnings (loss) per share provides an alternate measure of the company's performance for the current period and gives insight into its expected performance in future periods. These measures are used internally by the company to evaluate the performance of its underlying operations and to assist with its planning and forecasting of future operating results. As such, the company believes these measures are useful to investors in assessing the company's underlying performance. Hudbay provides adjusted EBITDA to help users analyze the company's results and to provide additional information about its ongoing cash generating potential in order to assess its capacity to service and repay debt, carry out investments and cover working capital needs. Net debt is shown because it is a performance measure used by the company to assess its financial position. Cash cost, sustaining and all-in sustaining cash cost per pound of copper produced are shown because the company believes they help investors and management assess the performance of its operations, including the margin generated by the operations and the company. Cash cost and sustaining cash cost per ounce of gold produced are shown because the company believes they help investors and management assess the performance of its Manitoba operations. Combined unit cost is shown because Hudbay believes it helps investors and management assess the company's cost structure and margins that are not impacted by variability in by-product commodity prices.
During 2021, there were non-recurring adjustments for Manitoba operations, including severance, past service pension costs, write-downs of certain machinery and equipment, and inventory supplies write-downs as well as non-cash impairment charges related to an updated Flin Flon closure plan and lower long term discount rates in the fourth quarter, none of which management believes are indicative of ongoing operating performance and therefore are adjusting items in the calculations of adjusted net earnings (loss) and adjusted EBITDA.
Cash cost and sustaining cash cost per pound of zinc produced was a previously disclosed non-IFRS measure, most recently published in the company's MD&A for the year ended December 31, 2021, dated February 23, 2022. With the planned closure of 777 mine and Flin Flon operations, including the zinc plant, in the second quarter of 2022, the production profile of Manitoba has shifted from zinc to gold and therefore the company has ceased providing this measure on a go forward basis.
In the first and second quarter of 2022, Hudbay recorded a non-cash gain of $79.9 million and $60.7 million, respectively, mostly related to the quarterly revaluation of its Flin Flon environmental provision, which was impacted by rising long-term risk-free discount rates. With closure of 777 mine and Flin Flon operations in the second quarter of 2022 and given the long-term nature of the reclamation cash flows, quarterly revaluation of the corresponding environmental provision remains highly sensitive to changes in long-term risk-free discount rates and, as such, the company expects to continue to experience quarterly environmental provision revaluations, which is not indicative of its ongoing operating performance. This item has been included prospectively in the calculation of adjusted earnings.
The following tables provide detailed reconciliations to the most comparable IFRS measures.
Adjusted Net Earnings (Loss) Reconciliation
Three Months Ended | ||||||
(in $ millions) | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2021 | |||
Profit (loss) for the period | 32.1 | 63.8 | (3.4 | ) | ||
Tax (recovery) expense | (10.6 | ) | 25.0 | 18.2 | ||
Profit before tax | 21.5 | 88.8 | 14.8 | |||
Adjusting items: | ||||||
Mark-to-market adjustments 1 | (14.0 | ) | 10.5 | 10.9 | ||
Foreign exchange (gain) loss | (2.2 | ) | 1.5 | 1.7 | ||
Inventory adjustments | 1.9 | (0.5 | ) | (0.7 | ) | |
Variable consideration adjustment - stream revenue and accretion | — | (5.8 | ) | — | ||
Impairment loss | 95.0 | — | — | |||
Environmental obligation adjustments 2 | (60.7 | ) | (79.9 | ) | — | |
Evaluation expenses | 0.7 | 7.0 | — | |||
Insurance recovery | (5.7 | ) | — | — | ||
Restructuring charges – Manitoba 3 | 3.7 | 0.7 | — | |||
Loss on disposal of plant and equipment - Manitoba | 3.1 | — | — | |||
Adjusted earnings before income taxes | 43.3 | 22.3 | 26.7 | |||
Tax recovery (expense) | 10.6 | (25.0 | ) | (18.2 | ) | |
Tax impact of adjusting items | (23.4 | ) | 7.9 | (3.1 | ) | |
Adjusted net earnings | 30.5 | 5.2 | 5.4 | |||
Adjusted net earnings ($/share) | 0.12 | 0.02 | 0.02 | |||
Basic weighted average number of common shares outstanding (millions) | 261.9 | 261.7 | 261.5 |
1 Includes changes in fair value of the gold prepayment liability, Canadian junior mining investments, other financial assets and liabilities at fair value through profit or loss and share-based compensation expenses.
2 Changes from movements to environmental obligation closure estimates are primarily related to the Flin Flon operations, which were fully depreciated as of March 31, 2022, as well as other Manitoba non-operating sites.
3 Includes closure costs for Flin Flon operations.
Adjusted EBITDA Reconciliation
Three Months Ended | ||||||
(in $ millions) | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2021 | |||
Profit (loss) for the period | 32.1 | 63.8 | (3.4 | ) | ||
Add back: Tax (recovery) expense | (10.6 | ) | 25.0 | 18.2 | ||
Add back: Net finance expense | 24.4 | 36.7 | 43.7 | |||
Add back: Other (income) expenses | (1.3 | ) | 2.0 | 1.6 | ||
Add back: Evaluation expenses | — | 7.0 | — | |||
Add back: Depreciation and amortization | 87.3 | 81.1 | 99.3 | |||
Add back: Amortization of deferred revenue and variable consideration adjustment | (19.2 | ) | (28.2 | ) | (17.1 | ) |
112.7 | 187.4 | 142.3 | ||||
Adjusting items (pre-tax): | ||||||
Environmental obligation adjustments 1 | (60.7 | ) | (79.9 | ) | (0.6 | ) |
Impairment loss | 95.0 | — | — | |||
Inventory adjustments | 1.9 | (0.5 | ) | (0.7 | ) | |
Share-based compensation (recovery) expenses 2 | (7.5 | ) | 3.2 | 2.2 | ||
Adjusted EBITDA | 141.4 | 110.2 | 143.2 |
1 Environmental obligation adjustments were presented within other (income) expense for 2021 periods.
2 Share-based compensation expenses reflected in cost of sales and selling and administrative expenses.
Net Debt Reconciliation
(in $ thousands) | |||
Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2021 | |
Total long-term debt | 1,182,143 | 1,181,119 | 1,181,195 |
Cash | 258,556 | 213,359 | 294,287 |
Net debt | 923,587 | 967,760 | 886,908 |
Cash Cost Reconciliation
Consolidated | Three Months Ended | ||
Net pounds of copper produced | |||
(in thousands) | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2021 |
Peru | 46,032 | 42,254 | 42,015 |
Manitoba | 10,556 | 12,205 | 9,736 |
Net pounds of copper produced | 56,588 | 54,459 | 51,751 |
Consolidated | Three Months Ended | |||||||||||
Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2021 | ||||||||||
Cash cost per pound of copper produced | $000s | $/lb 1 | $000s | $/lb 1 | $000s | $/lb 1 | ||||||
Cash cost, before by-product credits | 243,902 | 4.31 | 242,058 | 4.45 | 218,899 | 4.23 | ||||||
By-product credits | (207,191 | ) | (3.66 | ) | (181,673 | ) | (3.34 | ) | (175,470 | ) | (3.39 | ) |
Cash cost, net of by-product credits | 36,711 | 0.65 | 60,385 | 1.11 | 43,429 | 0.84 |
1 Per pound of copper produced.
Consolidated | Three Months Ended | ||||||||
Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2021 | |||||||
Supplementary cash cost information | $000s | $/lb 1 | $000s | $/lb 1 | $000s | $/lb 1 | |||
By-product credits 2 : | |||||||||
Zinc | 88,548 | 1.56 | 67,129 | 1.23 | 77,707 | 1.50 | |||
Gold 3 | 91,317 | 1.61 | 84,174 | 1.55 | 68,880 | 1.33 | |||
Silver 3 | 17,956 | 0.32 | 18,639 | 0.34 | 15,443 | 0.30 | |||
Molybdenum & other | 9,370 | 0.17 | 11,731 | 0.22 | 13,440 | 0.26 | |||
Total by-product credits | 207,191 | 3.66 | 181,673 | 3.34 | 175,470 | 3.39 | |||
Reconciliation to IFRS: | |||||||||
Cash cost, net of by-product credits | 36,711 | 60,385 | 43,429 | ||||||
By-product credits | 207,191 | 181,673 | 175,470 | ||||||
Treatment and refining charges | (15,033 | ) | (12,083 | ) | (15,243 | ) | |||
Share-based compensation expense | (632 | ) | 448 | 274 | |||||
Inventory adjustments | 1,933 | (461 | ) | (723 | ) | ||||
Change in product inventory | 4,494 | (20,920 | ) | 15,260 | |||||
Royalties | 3,971 | 3,218 | 4,288 | ||||||
Depreciation and amortization 4 | 87,305 | 81,091 | 99,305 | ||||||
Cost of sales 5 | 325,940 | 293,351 | 322,060 |
1 Per pound of copper produced.
2 By-product credits are computed as revenue per financial statements, including amortization of deferred revenue and pricing and volume adjustments.
3 Gold and silver by-product credits do not include variable consideration adjustments with respect to stream arrangements. Variable consideration adjustments are cumulative adjustments to gold and silver stream deferred revenue primarily associated with the net change in mineral reserves and resources or amendments to the mine plan that would change the total expected deliverable ounces under the precious metal streaming arrangement. For the three months ended June 30, 2022 the variable consideration adjustments amounted to income of $nil, the three months ended March 31, 2022 - income of $3,245 and for the three months ended June 30, 2021 - of $nil.
4 Depreciation is based on concentrate sold.
5 As per IFRS financial statements.
Peru | Three Months Ended | ||
(in thousands) | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2021 |
Net pounds of copper produced 1 | 46,032 | 42,254 | 42,015 |
1 Contained copper in concentrate.
Peru | Three Months Ended | |||||||||||
Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2021 | ||||||||||
Cash cost per pound of copper produced | $000s | $/lb | $000s | $/lb | $000s | $/lb | ||||||
Mining | 32,300 | 0.70 | 28,402 | 0.67 | 26,133 | 0.62 | ||||||
Milling | 44,731 | 0.97 | 47,655 | 1.13 | 40,286 | 0.96 | ||||||
G&A | 18,677 | 0.41 | 16,100 | 0.38 | 16,910 | 0.40 | ||||||
Onsite costs | 95,708 | 2.08 | 92,157 | 2.18 | 83,329 | 1.98 | ||||||
Treatment & refining | 9,226 | 0.20 | 7,585 | 0.18 | 9,824 | 0.23 | ||||||
Freight & other | 12,297 | 0.26 | 9,477 | 0.22 | 11,555 | 0.29 | ||||||
Cash cost, before by-product credits | 117,231 | 2.54 | 109,219 | 2.58 | 104,708 | 2.50 | ||||||
By-product credits | (33,268 | ) | (0.72 | ) | (43,997 | ) | (1.04 | ) | (27,137 | ) | (0.65 | ) |
Cash cost, net of by-product credits | 83,963 | 1.82 | 65,222 | 1.54 | 77,571 | 1.85 |
Peru | Three Months Ended | ||||||||
Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2021 | |||||||
Supplementary cash cost information | $000s | $/lb 1 | $000s | $/lb 1 | $000s | $/lb 1 | |||
By-product credits 2 : | |||||||||
Gold 3 | 14,191 | 0.31 | 21,712 | 0.51 | 8,835 | 0.21 | |||
Silver 3 | 11,687 | 0.25 | 12,991 | 0.31 | 7,466 | 0.18 | |||
Molybdenum | 7,390 | 0.16 | 9,294 | 0.22 | 10,836 | 0.26 | |||
Total by-product credits | 33,268 | 0.72 | 43,997 | 1.04 | 27,137 | 0.65 | |||
Reconciliation to IFRS: | |||||||||
Cash cost, net of by-product credits | 83,963 | 65,222 | 77,571 | ||||||
By-product credits | 33,268 | 43,997 | 27,137 | ||||||
Treatment and refining charges | (9,226 | ) | (7,585 | ) | (9,824 | ) | |||
Inventory adjustments | (97 | ) | (461 | ) | (723 | ) | |||
Share-based compensation expenses | (100 | ) | 98 | 52 | |||||
Change in product inventory | (8,394 | ) | (4,772 | ) | 4,465 | ||||
Royalties | 1,117 | 854 | 578 | ||||||
Depreciation and amortization 4 | 47,811 | 48,362 | 52,710 | ||||||
Cost of sales 5 | 148,342 | 145,715 | 151,966 |
1 Per pound of copper produced.
2 By-product credits are computed as revenue per financial statements, including amortization of deferred revenue and pricing and volume adjustments.
3 Gold and silver by-product credits do not include variable consideration adjustments with respect to stream arrangements.
4 Depreciation is based on concentrate sold.
5 As per IFRS financial statements.
Manitoba | Three Months Ended | ||
(in thousands) | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2021 |
Net pounds of copper produced 1 | 10,556 | 12,205 | 9,736 |
1 Contained copper in concentrate.
Manitoba | Three Months Ended | |||||||||||
Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2021 | ||||||||||
Cash cost per pound of copper produced | $000s | $/lb | $000s | $/lb | $000s | $/lb | ||||||
Mining | 54,500 | 5.16 | 59,433 | 4.87 | 54,714 | 5.62 | ||||||
Milling | 20,953 | 1.98 | 21,509 | 1.76 | 13,655 | 1.40 | ||||||
Refining (Zinc) | 14,379 | 1.36 | 18,376 | 1.51 | 17,908 | 1.84 | ||||||
G&A | 23,253 | 2.21 | 22,893 | 1.88 | 14,749 | 1.51 | ||||||
Onsite costs | 113,085 | 10.71 | 122,211 | 10.01 | 101,026 | 10.38 | ||||||
Treatment & refining | 5,807 | 0.55 | 4,498 | 0.37 | 5,419 | 0.56 | ||||||
Freight & other | 7,779 | 0.74 | 6,130 | 0.50 | 7,746 | 0.80 | ||||||
Cash cost, before by-product credits | 126,671 | 12.00 | 132,839 | 10.88 | 114,191 | 11.73 | ||||||
By-product credits | (173,923 | ) | (16.48 | ) | (137,676 | ) | (11.28 | ) | (148,333 | ) | (15.24 | ) |
Cash cost, net of by-product credits | (47,252 | ) | (4.48 | ) | (4,837 | ) | (0.40 | ) | (34,142 | ) | (3.51 | ) |
Manitoba | Three Months Ended | ||||||||
Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2021 | |||||||
Supplementary cash cost information | $000s | $/lb | $000s | $/lb | $000s | $/lb | |||
By-product credits 2 : | |||||||||
Zinc | 88,548 | 8.39 | 67,129 | 5.50 | 77,707 | 7.98 | |||
Gold 3 | 77,126 | 7.31 | 62,462 | 5.12 | 60,045 | 6.17 | |||
Silver 3 | 6,269 | 0.59 | 5,648 | 0.46 | 7,977 | 0.82 | |||
Other | 1,980 | 0.19 | 2,437 | 0.20 | 2,604 | 0.27 | |||
Total by-product credits | 173,923 | 16.48 | 137,676 | 11.28 | 148,333 | 15.24 | |||
Reconciliation to IFRS: | |||||||||
Cash cost, net of by-product credits | (47,252 | ) | (4,837 | ) | (34,142 | ) | |||
By-product credits | 173,923 | 137,676 | 148,333 | ||||||
Treatment and refining charges | (5,807 | ) | (4,498 | ) | (5,419 | ) | |||
Inventory adjustments | 2,030 | — | — | ||||||
Share-based compensation expenses | (532 | ) | 350 | 222 | |||||
Change in product inventory | 12,888 | (16,148 | ) | 10,795 | |||||
Royalties | 2,854 | 2,364 | 3,710 | ||||||
Depreciation and amortization 4 | 39,494 | 32,729 | 46,595 | ||||||
Cost of sales 5 | 177,598 | 147,636 | 170,094 |
1 Per pound of copper produced.
2 By-product credits are computed as revenue per financial statements, including amortization of deferred revenue and pricing and volume adjustments.
3 Gold and silver by-product credits do not include variable consideration adjustments with respect to stream arrangements.
4 Depreciation is based on concentrate sold.
5 As per IFRS financial statements.
Sustaining and All-in Sustaining Cash Cost Reconciliation
Consolidated | Three Months Ended | |||||||||||
Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2021 | ||||||||||
All-in sustaining cash cost per pound of copper produced | $000s | $/lb | $000s | $/lb | $000s | $/lb | ||||||
Cash cost, net of by-product credits | 36,711 | 0.65 | 60,385 | 1.11 | 43,429 | 0.84 | ||||||
Cash sustaining capital expenditures | 65,173 | 1.15 | 60,963 | 1.12 | 68,803 | 1.33 | ||||||
Royalties | 3,971 | 0.07 | 3,218 | 0.06 | 4,288 | 0.08 | ||||||
Sustaining cash cost, net of by-product credits | 105,855 | 1.87 | 124,566 | 2.29 | 116,520 | 2.25 | ||||||
Corporate selling and administrative expenses & regional costs | 2,479 | 0.04 | 13,060 | 0.24 | 10,995 | 0.22 | ||||||
Accretion and amortization of decommissioning and community agreements 1 | 874 | 0.02 | 721 | 0.01 | 705 | 0.01 | ||||||
All-in sustaining cash cost, net of by-product credits | 109,208 | 1.93 | 138,347 | 2.54 | 128,220 | 2.48 | ||||||
Reconciliation to property, plant and equipment additions: | ||||||||||||
Property, plant and equipment additions | 70,712 | 39,399 | 96,090 | |||||||||
Capitalized stripping net additions | 27,302 | 24,146 | 22,506 | |||||||||
Total accrued capital additions | 98,014 | 63,545 | 118,596 | |||||||||
Less other non-sustaining capital costs 2 | 32,988 | 12,832 | 52,655 | |||||||||
Total sustaining capital costs | 65,026 | 50,713 | 65,941 | |||||||||
Right of use leased assets | (12,501 | ) | (7,772 | ) | (9,101 | ) | ||||||
Capitalized lease cash payments - operating sites | 9,313 | 9,259 | 8,331 | |||||||||
Community agreement cash payments | 370 | 3,772 | 108 | |||||||||
Accretion and amortization of decommissioning and restoration obligations | 2,965 | 4,991 | 3,524 | |||||||||
Cash sustaining capital expenditures | 65,173 | 60,963 | 68,803 |
1 Includes accretion of decommissioning relating to non-productive sites, and accretion and amortization of current community agreements.
2 Other non-sustaining capital costs include Arizona capitalized costs, capitalized interest, capitalized exploration, growth capital expenditures.
Peru | Three Months Ended | |||||
Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2021 | ||||
Sustaining cash cost per pound of copper produced | $000s | $/lb | $000s | $/lb | $000s | $/lb |
Cash cost, net of by-product credits | 83,963 | 1.82 | 65,222 | 1.54 | 77,571 | 1.85 |
Cash sustaining capital expenditures | 35,527 | 0.78 | 30,039 | 0.71 | 34,898 | 0.83 |
Royalties | 1,117 | 0.02 | 854 | 0.02 | 578 | 0.01 |
Sustaining cash cost per pound of copper produced | 120,607 | 2.62 | 96,115 | 2.27 | 113,047 | 2.69 |
1 Only includes exploration costs incurred for locations near to existing mine operations.
Manitoba | Three Months Ended | |||||||||||
Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2021 | ||||||||||
Sustaining cash cost per pound of copper produced | $000s | $/lb | $000s | $/lb | $000s | $/lb | ||||||
Cash cost, net of by-product credits | (47,252 | ) | (4.48 | ) | (4,837 | ) | (0.40 | ) | (34,142 | ) | (3.51 | ) |
Cash sustaining capital expenditures | 29,646 | 2.81 | 30,924 | 2.53 | 33,905 | 3.49 | ||||||
Royalties | 2,854 | 0.27 | 2,364 | 0.19 | 3,710 | 0.38 | ||||||
Sustaining cash cost per pound of copper produced | (14,752 | ) | (1.40 | ) | 28,451 | 2.33 | 3,473 | 0.36 |
Manitoba Gold Cash Cost and Sustaining Cash Cost Reconciliation
Manitoba | Three Months Ended | |
Jun. 30, 2022 | Mar. 31, 2022 | |
Net ounces of gold produced | 44,787 | 43,167 |
Manitoba | Three Months Ended | |||||||
Jun. 30, 2022 | Mar. 31, 2022 | |||||||
Cash cost per ounce of gold produced | $000s | $/loz | $000s | $/oz | ||||
Cash cost, before by-product credits | 126,671 | 2,828 | 132,839 | 3,077 | ||||
By-product credits | (135,924 | ) | (3,035 | ) | (114,874 | ) | (2,661 | ) |
Gold cash cost, net of by-product credits | (9,253 | ) | (207 | ) | 17,965 | 416 |
Manitoba | Three Months Ended | |||||
Jun. 30, 2022 | Mar. 31, 2022 | |||||
Supplementary cash cost information | $000s | $/oz | $000s | $/oz | ||
By-product credits 2 : | ||||||
Copper | 39,127 | 874 | 39,660 | 919 | ||
Zinc | 88,548 | 1,977 | 67,129 | 1,555 | ||
Silver 3 | 6,269 | 140 | 5,648 | 131 | ||
Other | 1,980 | 44 | 2,437 | 56 | ||
Total by-product credits | 135,924 | 3,035 | 114,874 | 2,661 | ||
Reconciliation to IFRS: | ||||||
Cash cost, net of by-product credits | (9,253 | ) | 17,965 | |||
By-product credits | 135,924 | 114,874 | ||||
Treatment and refining charges | (5,807 | ) | (4,498 | ) | ||
Share-based compensation expenses | (532 | ) | 350 | |||
Inventory adjustments | 2,030 | — | ||||
Change in product inventory | 12,888 | (16,148 | ) | |||
Royalties | 2,854 | 2,364 | ||||
Depreciation and amortization 4 | 39,494 | 32,729 | ||||
Cost of sales 5 | 177,598 | 147,636 |
1 Per ounce of gold produced.
2 By-product credits are computed as revenue per financial statements, amortization of deferred revenue and pricing and volume adjustments. For more information, please see the realized price reconciliation table in the Q1 2022 Management Discussion and Analysis posted on hudbayminerals.com
3 Silver by-product credits do not include variable consideration adjustments with respect to stream arrangements.
4 Depreciation is based on concentrate sold.
5 As per IFRS financial statements.
Manitoba | Three Months Ended | |||||
Jun. 30, 2022 | Mar. 31, 2022 | |||||
Sustaining cash cost per ounce of gold produced | $000s | $/loz | $000s | $/oz | ||
Gold cash cost, net of by-product credits | (9,253 | ) | (207 | ) | 17,965 | 416 |
Cash sustaining capital expenditures | 29,646 | 662 | 30,924 | 716 | ||
Royalties | 2,854 | 64 | 2,364 | 55 | ||
Sustaining cash cost per ounce of gold produced | 23,247 | 519 | 51,253 | 1,187 |
Combined Unit Cost Reconciliation
Peru | Three Months Ended | ||||||
(in thousands except unit cost per tonne) | |||||||
Combined unit cost per tonne processed | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2021 | ||||
Mining | 32,300 | 28,402 | 26,133 | ||||
Milling | 44,731 | 47,655 | 40,286 | ||||
G&A 1 | 18,677 | 16,100 | 16,910 | ||||
Other G&A 2 | (1,050 | ) | (571 | ) | 52 | ||
94,658 | 91,586 | 83,381 | |||||
Less: Covid related costs | 1,275 | 2,321 | 6,293 | ||||
Unit Cost | 93,383 | 89,265 | 77,088 | ||||
Tonnes ore milled | 7,771 | 7,214 | 7,413 | ||||
Combined unit cost per tonne | 12.02 | 12.37 | 10.40 | ||||
Reconciliation to IFRS: | |||||||
Unit cost | 93,383 | 89,265 | 77,088 | ||||
Freight & other | 12,297 | 9,477 | 11,555 | ||||
Covid related costs | 1,275 | 2,321 | 6,293 | ||||
Other G&A | 1,050 | 571 | (52 | ) | |||
Share-based compensation expenses | (100 | ) | 98 | 52 | |||
Inventory adjustments | (97 | ) | (461 | ) | (723 | ) | |
Change in product inventory | (8,394 | ) | (4,772 | ) | 4,465 | ||
Royalties | 1,117 | 854 | 578 | ||||
Depreciation and amortization | 47,811 | 48,362 | 52,710 | ||||
Cost of sales 3 | 148,342 | 145,715 | 151,966 |
1 G&A as per cash cost reconciliation above.
2 Other G&A primarily includes profit sharing costs.
3 As per IFRS financial statements.
Manitoba | Three Months Ended | |||||
(in thousands except tonnes ore milled and unit cost per tonne) | ||||||
Combined unit cost per tonne processed | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2021 | |||
Mining | 54,500 | 59,433 | 54,714 | |||
Milling | 20,953 | 21,509 | 13,655 | |||
G&A 1 | 23,253 | 22,893 | 14,749 | |||
Less: G&A allocated to zinc metal production | (3,141 | ) | (3,382 | ) | (3,724 | ) |
Less: Other G&A related to profit sharing | (10,206 | ) | (10,025 | ) | (1,274 | ) |
Unit cost | 85,359 | 90,428 | 78,120 | |||
USD/CAD implicit exchange rate | 1.27 | 1.27 | 1.23 | |||
Unit cost - C$ | 108,806 | 114,504 | 95,927 | |||
Tonnes ore milled | 649,318 | 651,333 | 646,987 | |||
Combined unit cost per tonne - C$ | 168 | 176 | 148 | |||
Reconciliation to IFRS: | ||||||
Unit cost | 85,359 | 90,428 | 78,120 | |||
Freight & other | 7,779 | 6,130 | 7,746 | |||
Refined (zinc) | 14,379 | 18,376 | 17,908 | |||
G&A allocated to zinc metal production | 3,141 | 3,382 | 3,724 | |||
Other G&A related to profit sharing | 10,206 | 10,025 | 1,274 | |||
Share-based compensation expenses | (532 | ) | 350 | 222 | ||
Inventory adjustments | 2,030 | — | — | |||
Change in product inventory | 12,888 | (16,148 | ) | 10,795 | ||
Royalties | 2,854 | 2,364 | 3,710 | |||
Depreciation and amortization | 39,494 | 32,729 | 46,595 | |||
Cost of sales 2 | 177,598 | 147,636 | 170,094 |
1 G&A as per cash cost reconciliation above.
2 As per IFRS financial statements.
Forward-Looking Information
This news release contains forward-looking information within the meaning of applicable Canadian and United States securities legislation. All information contained in this news release, other than statements of current and historical fact, is forward-looking information. Often, but not always, forward-looking information can be identified by the use of words such as "plans", "expects", "budget", "guidance", "scheduled", "estimates", "forecasts", "strategy", "target", "intends", "objective", "goal", "understands", "anticipates" and "believes" (and variations of these or similar words) and statements that certain actions, events or results "may", "could", "would", "should", "might" "occur" or "be achieved" or "will be taken" (and variations of these or similar expressions). All of the forward-looking information in this news release is qualified by this cautionary note.
Forward-looking information includes, but is not limited to, production, cost and capital and exploration expenditure guidance, expectations regarding an increase in community investments following formalization of an agreement with the community of Uchucarcco, expectations regarding the impact of COVID-19 and inflationary pressures on the cost of operations, financial condition and prospects, expectations regarding the company's cash balance and liquidity for the remainder of the year, expectations regarding the Copper World Complex project, including the company's plans for a pre-feasibility study and potential optimization work, expectations regarding the permitting requirements for the Copper World Complex and permitting related litigation, expectations regarding the Snow Lake transition, including anticipated timelines for achieving target throughput and recoveries at the New Britannia mill, increasing the mining rate at Lalor to 5,300 tonnes per day and implementing the Stall mill recovery improvement program, expectations regarding the Flin Flon closure process and the transition of personnel and equipment to Snow Lake, expectations regarding an agreement with the community of Uchucarcco and the ability to commence exploration work on the Maria Reyna and Caballito properties, anticipated mine plans, anticipated metals prices and the anticipated sensitivity of the company's financial performance to metals prices, events that may affect its operations and development projects, anticipated cash flows from operations and related liquidity requirements, the anticipated effect of external factors on revenue, such as commodity prices, estimation of mineral reserves and resources, mine life projections, reclamation costs, economic outlook, government regulation of mining operations, and business and acquisition strategies. Forward-looking information is not, and cannot be, a guarantee of future results or events. Forward-looking information is based on, among other things, opinions, assumptions, estimates and analyses that, while considered reasonable by Hudbay at the date the forward-looking information is provided, inherently are subject to significant risks, uncertainties, contingencies and other factors that may cause actual results and events to be materially different from those expressed or implied by the forward-looking information.
The material factors or assumptions that Hudbay has identified and applied in drawing conclusions or making forecasts or projections are set out in the forward-looking information include, but are not limited to:
The risks, uncertainties, contingencies and other factors that may cause actual results to differ materially from those expressed or implied by the forward-looking information may include, but are not limited to, risks associated with COVID-19 and its effect on Hudbay's operations, financial condition, projects and prospects, uncertainty with respect to the political and social environment in Peru and its potential impact on the company's mining operations, risks generally associated with the mining industry and the current geopolitical environment, including future commodity prices, currency and interest rate fluctuations, energy and consumable prices, supply chain constraints and general cost escalation in the current inflationary environment, uncertainties related to the development and operation of the company's projects, risks related to the preliminary economic assessment of the Copper World Complex, including in relation to permitting, litigation, project delivery and financing risks, risks related to the new Lalor mine plan, including the continuing ramp-up of the New Britannia mill and the ability to convert inferred mineral resource estimates to higher confidence categories, the potential that additional financial assurance will be required to support the updated Flin Flon closure plan, dependence on key personnel and employee and union relations, risks related to political or social instability, unrest or change, risks in respect of Indigenous and community relations, rights and title claims, operational risks and hazards, including the cost of maintaining and upgrading the Company's tailings management facilities and any unanticipated environmental, industrial and geological events and developments and the inability to insure against all risks, failure of plant, equipment, processes, transportation and other infrastructure to operate as anticipated, compliance with government and environmental regulations, including permitting requirements and anti-bribery legislation, depletion of reserves, volatile financial markets and interest rates that may affect its ability to obtain additional financing on acceptable terms, the failure to obtain required approvals or clearances from government authorities on a timely basis, uncertainties related to the geology, continuity, grade and estimates of mineral reserves and resources, and the potential for variations in grade and recovery rates, uncertain costs of reclamation activities, the company's ability to comply with its pension and other post-retirement obligations, the ability to abide by the covenants in its debt instruments and other material contracts, tax refunds, hedging transactions, as well as the risks discussed under the heading "Risk Factors" in Hudbay's most recent Annual Information Form.
Should one or more risk, uncertainty, contingency or other factor materialize or should any factor or assumption prove incorrect, actual results could vary materially from those expressed or implied in the forward-looking information. Accordingly, you should not place undue reliance on forward-looking information. Hudbay does not assume any obligation to update or revise any forward-looking information after the date of this news release or to explain any material difference between subsequent actual events and any forward-looking information, except as required by applicable law.
Note to United States Investors
This news release has been prepared in accordance with the requirements of the securities laws in effect in Canada, which may differ materially from the requirements of United States securities laws applicable to U.S. issuers.
About Hudbay
Hudbay (TSX, NYSE: HBM) is a diversified mining company with long-life assets in North and South America. The company's operations in Cusco (Peru) produce copper with gold, silver and molybdenum by-products. Its operations in Manitoba (Canada) produce gold with copper, zinc and silver by-products. Hudbay's organic pipeline includes copper development projects in Arizona and Nevada (United States), and its growth strategy is focused on the exploration, development, operation, and optimization of properties it already controls, as well as other mineral assets it may acquire that fit its strategic criteria. Hudbay's mission is to create sustainable value through the acquisition, development and operation of high-quality, long-life deposits with exploration potential in jurisdictions that support responsible mining, and to see the regions and communities in which the company operates benefit from its presence. Further information about Hudbay can be found on www.hudbay.com .
For further information, please contact:
Candace Brûlé
Vice President, Investor Relations
(416) 814-4387
candace.brule@hudbay.com
_______________________________
i Adjusted net earnings and adjusted net earnings per share; adjusted EBITDA; cash cost, sustaining cash cost and all-in sustaining cash cost per pound of copper produced, net of by-product credits; cash cost and sustaining cash cost per ounce of gold produced, net of by-product credits; and net debt are non-IFRS financial performance measures with no standardized definition under IFRS. For further information, please see the "Non-IFRS Financial Reporting Measures" section of this news release.
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Highlights· New assay results from the Valentina copper deposit confirm a potential second high grade satellite addition for the Company's low-altitude, Costa Fuego senior copper development in Chile |
· Drill hole VAP0009 returned 8m grading 5.9% CuEq (5.7% copper & 24g/t silver) from 27m depth down-hole
· VAP0009 extends high grade mineralisation by 120m to the south of shallow historical mine development
· Results of diamond hole VALMET0002 , which recorded a stunning 17m visual intersection (see announcement dated 13 th June 2002) in a twin hole of VAP0009, are expected shortly following delays in receiving ore grade analysis results
· Assay results are pending for a further seventeen drill holes at Valentina as well as sixteen drill holes from the neighbouring San Antonio high grade copper resource
· First drilling underway at the large-scale Santiago Z target, part of a potential regional porphyry cluster south of the Company's Cortadera porphyry copper-gold discovery
* Copper Equivalent (CuEq) reported for the drill holes were calculated using the following formula: CuEq% = ((Cu% × Cu price 1% per tonne × Cu_recovery) + (Mo ppm × Mo price per g/t × Mo_recovery) + (Au ppm × Au price per g/t × Au_recovery) + (Ag ppm × Ag price per g/t × Ag_recovery)) / (Cu price 1% per tonne). The Metal Prices applied in the calculation were: Cu=3.00 USD/lb, Au=1,700 USD/oz, Mo=14 USD/lb, and Ag=20 USD/oz. Average fresh rock metallurgical recoveries used for Cortadera were Cu=83%, Au=56%, Mo=82%, and Ag=37%. Average fresh rock metallurgical recoveries used for Productora/Alice were Cu=89%, Au=58%, Mo=60%, and Ag=0%. 1 including 3m unsampled outside of metallurgical test area.
Hot Chili Limited (ASX: HCH) (TSXV: HCH) (OTCQX: HHLKF) ("Hot Chili" or "Company") is pleased to announce the highest-grade drill intersection recorded by the Company to date.
First assays returned from drilling across the historical Valentina high grade copper mine confirm a significant 120m strike extension to the deposit, recording 8m grading 5.9% CuEq (5.7% copper (Cu), 24.1g/t silver (Ag)) from 27m downhole in reverse circulation (RC) drill hole VAP0009.
Valentina and its neighbouring San Antonio satellite copper deposit (Inferred resource of 4.2Mt grading 1.2% CuEq (1.1% Cu, 2.1g/t Ag) for 48kt Cu and 287koz Ag, reported March 2022) are located immediately to the east of Cortadera, the centre-piece of the Company's Costa Fuego, coastal range, copper-gold hub in Chile.
Both deposits represent shallow high grade open pit opportunities, with the potential to provide front-end ore sources and make a positive material impact on the payback period and overall project economics of the Costa Fuego copper-gold development.
Impressive First Assay Results from Valentina, More to Come
Hot Chili's recently completed phase-one drilling programme at Valentina primarily focussed on proving continuity of the mineralised trend along strike of the successful 2018 drill campaign (see announcement dated 5th September 2018).
Of the nine holes as part of a phase-one programme, four drill holes recorded significant intersections. Best drill intersections include:
· 8m grading 5.9% CuEq (5.7% Cu, 24.1g/t Ag) from 27m depth and 2m grading 1.9% CuEq (1.8% Cu, 11g/t Ag) from 46m depth (VAP0009)
· 7m grading 2.0% CuEq (1.9% Cu, 11g/t Ag) from 163m depth (VAP0004)
Drilling confirms continuity of the mineralised Valentina structure 120m south of current underground workings, in an area previously masked at-surface by a shallow horizon of Atacama gravels.
Mineralisation is interpreted to be fault-hosted, dipping steeply towards the east within a sequence of volcanic-sedimentary units, similar to the deposit setting of the neighbouring San Antonio resource. Copper grades between 27m and 35m depth in VAP0009 were associated with both copper sulphide (2-5 % chalcopyrite) and oxide mineralisation.
Importantly, the result in RC drill hole VAP0009 is complimented by a twin Diamond Drill (DD) hole (VALMET0002 drilled for metallurgical test work), which recorded a much wider 17m visual intersection of copper sulphide and oxide mineralisation ( see announcement dated 13th June 2022 ).
Assay results for VALMET0002 are expected to be received shortly following additional test work requirements and delays in receiving ore grade analysis results. A second-phase of seventeen shallow RC drill holes has been recently completed at Valentina with results expected to be received over the coming weeks.
Sixteen Drillholes Completed at San Antonio Ahead of Updated Mineral Resource
Thirteen RC and three DD drill holes have been completed at the San Antonio high-grade copper resource to upgrade its categorisation from Inferred to Indicated, ahead of a planned resource upgrade for Costa Fuego in late 2022.
RC drill holes have in-filled and extended the mineralised trend along interpreted high-grade plunging shoots, with most of the drill holes supporting the current interpretation of structure and mineralisation at San Antonio.
Diamond drillholes will provide material for metallurgical testwork, key to the inclusion of the San Antonio Resource in the Costa Fuego combined prefeasibility study (PFS) due in Q1 2023.
Assay results from San Antonio drilling are also expected to be received in the coming weeks.
First drilling is now underway across the Santiago Z porphyry target, one of several large-scale targets planned for testing this year.
The Company looks forward to next drilling results from Valentina and San Antonio, and an exciting period of exploration drilling across its consolidated, coastal range, landholdings.
Reported on a 100% Basis - combining Mineral Resource estimates for the Cortadera, Productora and San Antonio deposits. Figures are rounded, reported to appropriate significant figures, and reported in accordance with CIM and NI 43-101. Metal rounded to nearest thousand, or if less, to the nearest hundred. Total Resource reported at +0.21% CuEq for open pit and +0.30% CuEq for underground. Refer to Announcement "Hot Chili Delivers Next Level of Growth" (31st March 2022) for JORC Table 1 information related to the Costa Fuego Mineral Resource estimates.
* Copper Equivalent (CuEq) reported for the resource were calculated using the following formula: CuEq% = ((Cu% × Cu price 1% per tonne × Cu_recovery) + (Mo ppm × Mo price per g/t × Mo_recovery) + (Au ppm × Au price per g/t × Au_recovery) + (Ag ppm × Ag price per g/t × Ag_recovery)) / (Cu price 1% per tonne). The Metal Prices applied in the calculation were: Cu=3.00 USD/lb, Au=1,700 USD/oz, Mo=14 USD/lb, and Ag=20 USD/oz. For Cortadera and San Antonio (Inferred + Indicated), the average metallurgical recoveries were Cu=83%, Au=56%, Mo=82%, and Ag=37%. For Productora (Inferred + Indicated), the average metallurgical recoveries were Cu=83%, Au=43% and Mo=42%. For Costa Fuego (Inferred + Indicated), the average Metallurgical Recoveries were Cu=83%, Au=51%, Mo=67% and Ag=23%.
Significant intercepts are calculated above a nominal cut-off grade of 0.5% Cu, with a minimum estimated true thickness of 1.5m. These parameters are aligned with marginal economic cut-off grades for narrow, high-grade polymetallic copper deposits of similar grade in Chile and elsewhere in the world.
Down-hole significant intercept widths are estimated to be at or around 70 per cent of true-widths of mineralisation
* Copper Equivalent (CuEq) reported for the drill holes at Valentina used Costa Fuego averages (as no metallurgical testwork has been completed) using the following formula: CuEq% = ((Cu% × Cu price 1% per tonne × Cu_recovery) + (Mo ppm × Mo price per g/t × Mo_recovery) + (Au ppm × Au price per g/t × Au_recovery) + (Ag ppm × Ag price per g/t × Ag_recovery)) / (Cu price 1% per tonne). The Metal Prices applied in the calculation were: Cu=3.00 USD/lb, Au=1,700 USD/oz, Mo=14 USD/lb, and Ag=20 USD/oz. Average fresh rock metallurgical recoveries were Cu=83%, Au=56%, Mo=82%, and Ag=37%.
Reported on a 100% Basis - combining Mineral Resource estimates for the Cortadera, Productora and San Antonio deposits. Figures are rounded, reported to appropriate significant figures, and reported in accordance with CIM and NI 43-101. Metal rounded to nearest thousand, or if less, to the nearest hundred. Total Resource reported at +0.21% CuEq for open pit and +0.30% CuEq for underground. Refer to Announcement "Hot Chili Delivers Next Level of Growth" (31st March 2022) for JORC Table 1 information related to the Costa Fuego Mineral Resource estimates.
Copper Equivalent (CuEq) reported for the resource were calculated using the following formula: CuEq% = ((Cu% × Cu price 1% per tonne × Cu_recovery) +(Mo ppm × Mo price per g/t × Mo_recovery) + (Au ppm × Au price per g/t × Au_recovery) + (Ag ppm × Ag price per g/t × Ag_recovery)) / (Cu price 1% per tonne). The Metal Prices applied in the calculation were: Cu=3.00 USD/lb, Au=1,700 USD/oz, Mo=14 USD/lb, and Ag=20 USD/oz. For Cortadera and San Antonio (Inferred + Indicated), the average Metallurgical Recoveries were: Cu=83%, Au=56%, Mo=82%, and Ag=37%. For Productora (Inferred + Indicated), the average Metallurgical Recoveries were: Cu=83%, Au=43% and Mo=42%. For Costa Fuego (Inferred + Indicated), the average Metallurgical Recoveries were: Cu=83%, Au=51%, Mo=67% and Ag=23%.
** Note: Silver (Ag) is only present within the Cortadera Mineral Resource estimate
Competent Person's Statement- Exploration Results
Exploration information in this Announcement is based upon work compiled by Mr Christian Easterday, the Managing Director and a full-time employee of Hot Chili Limited whom is a Member of the Australasian Institute of Geoscientists (AIG). Mr Easterday has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a ‘Competent Person' as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves' (JORC Code). Mr Easterday consents to the inclusion in the report of the matters based on their information in the form and context in which it appears.
Competent Person's Statement- Costa Fuego Mineral Resources
The information in this report that relates to Mineral Resources for Cortadera, Productora and San Antonio which constitute the combined Costa Fuego Project is based on information compiled by Ms Elizabeth Haren, a Competent Person who is a Member and Chartered Professional of The Australasian Institute of Mining and Metallurgy and a Member of the Australian Institute of Geoscientists. Ms Haren is a full-time employee of Haren Consulting Pty Ltd and an independent consultant to Hot Chili. Ms Haren has sufficient experience, which is relevant to the style of mineralisation and types of deposits under consideration and to the activities undertaken, to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code of Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Ms Haren consents to the inclusion in the report of the matters based on her information in the form and context in which it appears. For further information on the Costa Fuego Project, refer to the technical report titled "Resource Report for the Costa Fuego Technical Report", dated December 13, 2021, which is available for review under Hot Chili's profile at www.sedar.com.
Reporting of Copper Equivalent
Copper Equivalent (CuEq) reported for the resource were calculated using the following formula: CuEq% = ((Cu% × Cu price 1% per tonne × Cu_recovery)+(Mo ppm × Mo price per g/t × Mo_recovery)+(Au ppm × Au price per g/t × Au_recovery)+ (Ag ppm × Ag price per g/t × Ag_recovery)) / (Cu price 1% per tonne). The Metal Prices applied in the calculation were: Cu=3.00 USD/lb, Au=1,700 USD/oz, Mo=14 USD/lb, and Ag=20 USD/oz. For Cortadera and San Antonio (Inferred + Indicated), the average Metallurgical Recoveries were: Cu=83%, Au=56%, Mo=82%, and Ag=37%. For Productora (Inferred + Indicated), the average Metallurgical Recoveries were: Cu=83%, Au=43% and Mo=42%. For Costa Fuego (Inferred + Indicated), the average Metallurgical Recoveries were: Cu=83%, Au=51%, Mo=67% and Ag=23%.
About Hot Chili
Hot Chili Limited is a mineral exploration company with assets in Chile. The Company's flagship project, Costa Fuego, is the consolidation into a hub of the Cortadera porphyry copper-gold discovery and the Productora copper-gold deposit, set 14 km apart in an excellent location – low altitude, coastal range of Chile, infrastructure rich, low capital intensity. The Costa Fuego landholdings, contains an Indicated Resource of 725Mt grading 0.47% CuEq (copper equivalent), containing 2.8 Mt Cu, 2.6 Moz Au, 10.4 Moz Ag, and 67 kt Mo and an Inferred Resource of 202 Mt grading 0.36% CuEq containing 0.6Mt Cu, 0.4 Moz Au, 2.0 Moz Ag and 13 kt Mo, at a cut-off grade of +0.21% CuEq for open pit and +0.30% CuEq for underground. The Company is working to advance its Costa Fuego Project through a preliminary feasibility study (followed by a full FS and DTM), and test several high-priority exploration targets.
Certain statements contained in this news release, including information as to the future financial or operating performance of Hot Chili and its projects may include statements that are "forwardâ€looking statements" which may include, amongst other things, statements regarding targets, estimates and assumptions in respect of mineral reserves and mineral resources and anticipated grades and recovery rates, production and prices, recovery costs and results, and capital expenditures and are or may be based on assumptions and estimates related to future technical, economic, market, political, social and other conditions.These forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by Hot Chili, are inherently subject to significant technical, business, economic, competitive, political and social uncertainties and contingencies and involve known and unknown risks and uncertainties that could cause actual events or results to differ materially from estimated or anticipated events or results reflected in such forwardâ€looking statements.
Hot Chili disclaims any intent or obligation to update publicly or release any revisions to any forwardâ€looking statements, whether as a result of new information, future events, circumstances or results or otherwise after the date of this news release or to reflect the occurrence of unanticipated events, other than as may be required by law. The words "believe", "expect", "anticipate", "indicate", "contemplate", "target", "plan", "intends", "continue", "budget", "estimate", "may", "will", "schedule" and similar expressions identify forwardâ€looking statements.
All forwardâ€looking statements made in this news release are qualified by the foregoing cautionary statements. Investors are cautioned that forwardâ€looking statements are not a guarantee of future performance and accordingly investors are cautioned not to put undue reliance on forwardâ€looking statements due to the inherent uncertainty therein.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.
Investor Relations
Graham Farrell
+1 416-842-9003
Graham.Farrell@harbor-access.com
Investor Relations
Jonathan Paterson
+1 475-477-9401
Jonathan.Paterson@harbor-access.com
Managing Director
Christian Easterday
https://www.hotchili.net.au/investors/
Copyright (c) 2022 TheNewswire - All rights reserved.
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The first week of August was positive for the S&P/TSX Venture Composite Index (INDEXTSI:JX), which was able to end the period in the green.
After slipping to a year-to-date low of 584 points in mid-August, Canada’s junior index has added 13 percent in the weeks since then, and closed last Friday (August 5) at 663.52.
Precious metals explorers were some of the main gainers as the gold price approached the US$1,800 per ounce level and silver began to rebound from its two year low.
As the TSXV clawed back its summer losses, the main indexes in North America were in the red as stocks reacted to better-than-expected July jobs numbers out of the US.
Almost half a million jobs were added during the seventh month of the year, prompting many to speculate that the US Federal Reserve will raise interest rates by another 75 basis points at its September meeting.
The five TSXV-listed mining stocks that saw the biggest rises last week are as follows:
Here’s a look at those companies and the factors that moved their share prices last week.
Junior exploration company Battery Mineral Resources is engaged in the exploration and acquisition of battery metals assets in favorable mining jurisdictions. Presently the company is developing the Punitaqui mining complex, a past copper-gold producer, in the Coquimbo region of Chile.
According to the company, Punitaqui is slated for near-term resumption of operations in late 2022.
Last Tuesday (August 2), Battery Mineral Resources announced the appointment of Derek White to its board of directors. White is the president and CEO of Ascot Resources (TSX:AOT,OTCQX:AOTVF).
“Derek was instrumental in sourcing and evaluating the Punitaqui mine, our flagship asset and has extensive experience in both copper mining and in operating in the country of Chile,” Lazaros Nikeas, Battery Mineral Resources' chairman, wrote in his welcoming statement.
The addition helped move company shares 56.54 percent higher, ending the week at C$0.29.
Contact Gold is an explorer focused on making district-scale gold discoveries in Nevada. The firm’s extensive land holdings are on the prolific Carlin and Cortez gold trends, which host numerous gold deposits and mines.
The company did not release any news last week. The last update Contact provided was the announcement of a non-brokered private placement for C$1 million in late June.
Shares of Contact gained 50.38 percent over the five day session, closing at C$0.04.
K2 Gold is a member of the Discovery Group and currently has projects in Canada’s Yukon and the Southwest US.
The company’s Si2 project is located within the Walker Lane mineral trend in Esmerelda County, Nevada. According to K2, the property encompasses a large alteration zone hosted by an arcuate rhyolite dome field.
K2 did not release any company updates last week, but its share price added 42.06 percent to end at C$0.22.
Described as a clean technology company, Petroteq Energy is focused on the development, implementation and licensing of a patented, environmentally safe and sustainable technology for the extraction and reclamation of heavy oil and bitumen from oil sands and mineable oil deposits.
Last Tuesday, Petroteq entered into a binding letter of intent with Netoil; under the deal, Netoil will be granted two licenses for Petroteq's clean oil recovery technology for use in Iraq and Libya.
“The consideration for each license has been agreed to US$6 million and a five percent royalty fee of the net production revenue. In addition, a minimum annual fee has been agreed to US$1 million until the region is producing,” a statement from the company reads.
Petroteq shares were up 42.94 percent following the news to end the five day period at C$0.25.
Focus Graphite is an exploration and development company working to produce flake graphite concentrate at its wholly owned Lac Knife and Lac Tétépisca flake graphite projects in Québec.
At the end of July, Focus Graphite commenced the second phase of a 2022 core drilling program on its Lac Tétépisca project. The drill program was initiated following the receipt of two land use permits from Quebec's Ministry of Forests, Wildlife and Parks. Shares of Focus increased by 35 percent last week to trade for C$0.27.
Data for 5 Top Weekly TSXV Performers articles is retrieved each Friday at 10:30 a.m. EST using TradingView's stock screener. Only companies with market capitalizations greater than C$10 million prior to the week's gains are included. Companies within the non-energy minerals and energy minerals are considered.
Don't forget to follow us @INN_Resource for real-time updates!
Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Battery Mineral Resources is a client of the Investing News Network. This article is not paid-for content.
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