Opawica Explorations Inc. (TSXV: OPW) (FSE: A2PEAD) (OTCQB: OPWEF) (the "Company" or "Opawica") is pleased to provide an update on its first phase of drilling on the Company's Bazooka property in Rouyn Noranda camp of Quebec.
Highlights include:
Figure 1 Visible gold in OP-21-22 @ 279.45 m depth
Company President and Chief Executive Officer, Blake Morgan, commented, "The drilling to date has progressed extremely well. It is encouraging to be encountering visible gold during our maiden drill program. Over 2,000 meters of core have now been sent for assay. Phase two of the planned drilling will begin shortly, in addition to a maiden drill campaign on the Arrowhead project. We look forward to the assay results and reporting them to our shareholders."
Bazooka Property
The Bazooka property occurs along one of the most prolific auriferous structures in the world, the Cadillac-Larder Lake break/fault. The Cadillac-Larder Lake break/fault, in part, marks the boundary between the Archean Abitibi subprovince in the north and the predominantly metasedimentary Pontiac subprovince south of the fault.
Gold mineralization on the property occurs within mixed, up to 60-metre-wide (estimated true width), strong quartz-carbonate-sericite and talc-chlorite schists of sedimentary and ultramafic to mafic volcanic protoliths, respectively, and is referred to as the Main zone. The alteration and mineralization are spatially associated with the Cadillac-Larder Lake.
The break/fault zone is at the base and is characterized by up to two-metre-wide (estimated true width), strongly graphitic fault. The graphitic fault generally marks the contact between the sedimentary and ultramafic metavolcanic rocks.
Structures and hydrothermal pathways were interpreted using the co-occurrence of selected exploration criteria in drill hole data. Interpreted prospective panels trend generally east-west with a steep dip to the north. They are constrained within the northern and southern borders of the Cadillac shear zone, a 150-metre-wide corridor of highly carbonate-chlorite-talc altered and schistosed ultramafic units, which form a Z-shape asymmetric drag fold in the area of the Bazooka historic mine.
Derrick Strickland, P. Geo (OGQ No. 35402), is the qualified person for Opawica Explorations, and has reviewed and approved the technical content of this news release.
About Opawica Explorations Inc.
Opawica Explorations Inc. is a junior Canadian exploration company with a strong portfolio of precious and base metal properties within the Rouyn-Noranda region of the Abitibi Gold Belt in Québec and in Central Newfoundland and Labrador. The Company's management has a great track record in discovering and developing successful exploration projects. The Company's objective is to increase shareholder value through the development of exploration properties using cost effective exploration practices, acquiring further exploration properties, and seeking partnerships by either joint venture or sale with industry leaders.
FOR FURTHER INFORMATION CONTACT
Blake Morgan
President and Chief Executive Officer
Opawica Explorations Inc.
Telephone: 604-681-3170
Fax: 604-681-3552
Neither the TSX Venture Exchange nor its Regulation Service Provider (as the term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy of accuracy of this news release.
Forward-Looking Statements
This news release contains certain forward-looking statements, which relate to future events or future performance and reflect management's current expectations and assumptions. Such forward-looking statements reflect management's current beliefs and are based on assumptions made by and information currently available to the Company. Readers are cautioned that these forward-looking statements are neither promises nor guarantees, and are subject to risks and uncertainties that may cause future results to differ materially from those expected including, but not limited to, market conditions, availability of financing, actual results of the Company's exploration and other activities, environmental risks, future metal prices, operating risks, accidents, labor issues, delays in obtaining governmental approvals and permits, and other risks in the mining industry. All the forward-looking statements made in this news release are qualified by these cautionary statements and those in our continuous disclosure filings available on SEDAR at www.sedar.com. These forward-looking statements are made as of the date hereof and the Company does not assume any obligation to update or revise them to reflect new events or circumstances save as required by applicable law.
Eric Sprott, touted as a “Canada's biggest gold enthusiast," has injected somewhere between $200 and $300 million into the junior mining space in recent times. Sprott's investment strategy has recently shifted from investing in major mining companies towards investing in junior mining companies which he believes could provide him with big returns.
Sprott's investments may be of particular interest to investors considering the coattail investing strategy—this refers to mimicking the trades of well-known and historically successful investors to metaphorically 'ride the coattails' of respected investors in the hopes of realizing returns.
One company that Sprott has invested in recently is Opawica Explorations (TSXV:OPW) (FSE:A2PEAD) (OTC:OPWEF), a Canadian junior mineral exploration and development company focused on Quebec and Newfoundland. The company is backed by a management team with decades of experience and success in the mining industry and lead investors GoldSpot Discoveries (TSXV:SPOT,OTCQX:SPOFF) and Eric Sprott.
Opawica Explorations has strategically located projects near high-yielding mines in the gold-rich and mining-friendly Rouyn-Noranda camp in the Abitibi gold belt in Quebec and the Rogerson structural gold corridor in Newfoundland. The Abitibi gold belt is the world's largest mineral-rich greenstone geological belt and hosts more than 170 million ounces of produced gold while the Rogerson structural gold corridor is well-endowed in gold deposits and showings.
The company has three early-stage projects including Arrowhead, Bazooka and McWatters which have shown promising drill and sample results for significant high-grade gold mineralization. Opawica Explorations may have the potential to replicate the success of several high-yielding nearby mines including Agnico Eagle's Mouska, Yamana Gold's Wasamac and Yourbeau Resources Astoria.
The company is fully funded, having recently raised C$5.3 million in June 2021 through non-brokered private placement despite only seeking to raise C$4 million. As a result of this successful funding round, the company is fully equipped to extend drilling programs without financial constraints.
Opawica Explorations recently signed a service agreement with GoldSpot Discoveries Corp. to assist in the exploration of its projects. The strategic partnership will maximize the chances of mineral discovery through the use of GoldSpot's proprietary technology and geoscience expertise. GoldSpot Discoveries has been granted a 0.5 percent NSR royalty on the Bazooka project and multiple royalty options on various projects.
Opawica Explorations is currently in the process of gaining permits in Quebec and prospecting the Newfoundland property. The company plans to begin drilling no later than October 2021 after sufficient geological assessments are completed on its properties.
The Bazooka project is located in the high-grade gold region of the Abitibi gold belt in Quebec on the Cadillac Larder Lake Break. The property spans 1200 hectares including seven kilometres of strike length. The project is contiguous to the south-western border of Yamana Gold's Wasamac gold property that has proven and probable mineral reserves of 1.8 million ounces of gold at 2.56 g/t. Additionally, the Bazooka property is directly west of the IAMGOLD Corporation option which has produced high grades in the past.
From 2003 to 2005, drilling on the Bazooka property yielded widespread gold mineralization from a few hundred ppb to as high as 316.23 g/t of gold over 1.0 m in a singular hole. In 2017, drilling and historical holes confirmed a wide gold zone extending from the west to east at 275 m deep.
The property is believed to host higher-grade gold and will be operated on in three phases. The first phase will consist of a review of drill cores to establish a more consistent lithological code. The second phase will consist of drilling to obtain additional results in the central part of the high-grade gold zone associated with the four mineralized gold zones outlined by previous workings. Lastly, the third phase will conduct a resource estimate, metallurgical testing and preparation of the resource estimate report.
The Arrowhead project is also located in the high-grade gold region of the Abitibi gold belt in Quebec. The property is fully surrounded by Agnico Eagle Mines Ltd. which recently conducted a significant drilling campaign to the west and north of Arrowhead.
The Arrowhead project has a history of exploration and drilling work which includes 34.29 g/t of gold sampled in 1929. Previous drill holes on the property intercepted 40 gold-copper mineralized zones, enhancing the potential for quartz-carbonate auriferous veins associated with E-V trending on the shear zone, gold-rich VMS deposits and gold-rich polymetallic veins. Fine visible gold was seen throughout the historical drilling and on the surface including 4000 ppb of gold at 0.37 m depth.
The property is believed to host new mineralized veins as a result of previous exploration work that was conducted but the economic potential has not yet been proven.
The MacWatters project is located in the Abitibi gold belt region of Quebec. The project is continuous to the Long Bars Zone Break, the Yourbeau Rouyn property and the Granada Gold property that contains a gold resource of 2.3 million ounces. The project is associated with quartz veins in deformation zones.
The property has a limited exploration history including an MMI survey, walking IP and soil sampling. Several gold showings have been identified both within and in the surrounding area including visible gold reported. Historical drill results done by Opawica Explorations include 7.79 g/t of gold over 3 metres.
The property is believed to host significant gold opportunities for the company.
Blake Morgan has 15 years of experience in the mining industry including 10 years dedicated to the mining and natural resource sector in Australia working with Rio Tinto, BMA Metals (a subsidiary of BHP) and Santos Ltd. Gaining first-hand knowledge, culture and an understanding of mining operations, Morgan then made the move from Australia to Canada and has been instrumental in consolidating significant exploration land packages and financing their development for private resource exploration companies in British Columbia.
Sandra Wong is a Chartered Professional Accountant with over 10 years of working experience with several TSX Venture Exchange- and Canadian Securities Exchange-listed companies in the area of financial reporting and company management.
Chris Reynolds has been investing in the natural resource sector for over 10 years. Delivering solutions for corporate structure, strategy and communications for small-cap juniors, Reynolds was an instrumental part in the incubation of Lithium Consolidated Mineral Exploration which went public on the ASX in 2017. He started his career at Longview Capital Partners in corporate development, then worked as an investment advisor at Mackie Research. He is currently the Founder of Progenitor Metals Corp.
Owen King has 20 years of experience in the financial markets and management consulting fields. King was employed at Mackie Research as an investment advisor focusing on venture capital financings. Since 2014, King has been working with public companies in business development and assisting with capital raises and IPOs. Before this, King was a management consultant working in the high-tech industry installing auditable quality management systems in small businesses.
Philippe Harvard has been involved in the mineral exploration industry since 2008 and is one of the principals of Investissements Gema Inc., a private company engaged in the purchase and sale of mineral properties in the Province of Quebec. Harvard is also the president of TelKel, an independent telecommunications company in the province of Quebec. Harvard is also the President of Cubicule Studio, a software engineering company.
(TheNewswire)
Vancouver, B.C. TheNewswire - June 29 th 2022 - Opawica Explorations Inc. (TSXV:OPW) (FSE:A2PEAD) (OTC:OPWEF) (the "Company" or "Opawica") is pleased to announce it has completed its maiden drill program on the Arrowhead Property in the Rouyn Noranda camp of the Abitibi in Quebec.
Highlights include:
To date, the Company has drilled 13 holes on the Arrowhead Property, comprising 4,305.7 metres. The Company has sent 1,577 rock samples, representing 1,844.75 linear metres, for assay to ALS in Quebec.
The drill program targeted the Cadillac shear zone and intersected prospective geology with a variable amount of quartz veining, brecciation, silicification and quartz stockwork, with associated sulphides.
Visible gold was encountered in a quartz vein shear zone in hole AR-22-13 at a depth of approximately 375.945 metres.
Time-domain downhole EM survey were performed on four holes including AR22-04.
The Company has intersected a section of 16.9 meters (AR-22-04) of silicified mafic tuff interbedded with felsic lapilli tuffs, quart-feldspar veins, and quartz veins.
Company President and chief executive officer Blake Morgan commented, " The Opawica team is thrilled with our maiden drill program on the Arrowhead Project. With visible gold and numerous intersections of up to nearly 17 metres. The team eagerly await assays results and will begin preparations for our phase 2 drill program. Phase two will take place later this year once all data has been received."
The Company has engaged services TMC Geophysics (TMC) of Val-d'or to undertake a downhole 3D Borehole Pulse EM Time Domain survey on four drill holes AR-22-04, AR-22-5, AR22-09 and AR-22-10 (see below). The surveys were done to help identify mineralization that does not have a surface expression.
A 3D Borehole Pulse EM system is used in which an axial component (Z) probe and a cross component (XY) probe measure the three components of the induced secondary field. The first pass with the ‘Z' probe detects any in-hole or off-hole anomalies and gives information on size, conductivity, and distances to the edge of conductors. The second pass with the ‘XY' probe measures two orthogonal components of the EM field in a plane oriented at right angles with the borehole. These results give directional information about the center of the conductive body.
The Arrowhead Project is mainly covered by the metavolcanites of the Blake River Group. Strata are oriented east-west and present a subvertical dip. Volcanic and sedimentary rocks form a series of east-west-trending, steeply dipping monoclinal panels. The sequences are separated by longitudinal contacts parallel to the lithologies. In the southern part of Joannes township, the Cadillac Fault runs along an east-west axis over a lateral distance of about 150 kilometres. In the province of Quebec, more than 40 gold deposits that have produced over 60 million ounces of gold in the past hundred years and are associated with this major structure and its subsidiary faults.*
Figure 1. 3D Borehole Pulse EM system
Click Image To View Full Size
Derrick Strickland, P. Geo (OGQ No. 35402), independent consultant to the company has reviewed and approved the technical content of this news release. * The Qualified Person has been unable to verify the information on the adjacent properties. Mineralization hosted on adjacent and/or nearby and/or geologically similar properties is not necessarily indicative of mineralization hosted on the Company's properties.
About Opawica Explorations Inc.
Opawica Explorations Inc. is a junior Canadian exploration company with a strong portfolio of precious and base metal properties within the Rouyn-Noranda region of the Abitibi Gold Belt in Québec and in Central Newfoundland and Labrador. The Company's management has a great track record in discovering and developing successful exploration projects. The Company's objective is to increase shareholder value through the development of exploration properties using cost effective exploration practices, acquiring further exploration properties, and seeking partnerships by either joint venture or sale with industry leaders.
FOR FURTHER INFORMATION CONTACT
Blake Morgan
President and Chief Executive Officer
Telephone: 604-681-3170
Fax: 604-681-3552
Neither the TSX Venture Exchange nor its Regulation Service Provider (as the term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy of accuracy of this news release.
Forward-Looking Statements
This news release contains certain forward-looking statements, which relate to future events or future performance and reflect management's current expectations and assumptions. Such forward-looking statements reflect management's current beliefs and are based on assumptions made by and information currently available to the Company. Readers are cautioned that these forward-looking statements are neither promises nor guarantees, and are subject to risks and uncertainties that may cause future results to differ materially from those expected including, but not limited to, market conditions, availability of financing, actual results of the Company's exploration and other activities, environmental risks, future metal prices, operating risks, accidents, labor issues, delays in obtaining governmental approvals and permits, and other risks in the mining industry. All the forward-looking statements made in this news release are qualified by these cautionary statements and those in our continuous disclosure filings available on SEDAR at www.sedar.com. These forward-looking statements are made as of the date hereof and the Company does not assume any obligation to update or revise them to reflect new events or circumstances save as required by applicable law.
Copyright (c) 2022 TheNewswire - All rights reserved.
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(TheNewswire)
Vancouver, B.C. TheNewswire - June 22 nd 2022 - Opawica Explorations Inc. (TSXV:OPW) (FSE:A2PEAD) (OTC:OPWEF) (the "Company" or "Opawica") is pleased to provide an update on its first phase of drilling at the Company's Arrowhead Property in the Rouyn Noranda camp of the Abitibi in Quebec.
Highlights include:
Twelve holes have been completed on the Arrowhead, comprising 3,603 metres. Core logging and sampling are ongoing.
The drill program was designed to target the well-known Cadillac shear zone and the campaign has intersected prospective geology with varying amounts of visible gold, quartz veining, brecciation and silicification, and quartz stockwork with associated sulphides.
The Company has intersected a section of 16.9 meters (AR-22-04) of silicified mafic tuff interbedded with felsic lapilli tuffs, quart-feldspar veins, and quartz veins.
Company President and chief executive officer Blake Morgan commented, "The drilling has progressed very well, and I really like what I am seeing, especially from hole AR-22-04. It looks like we are on the right track, in the right part of the world. We know this area holds elephant sized deposits at depth, as the La Rhonde mine held by Agnico Eagle is located next door to the Arrowhead Property and goes to depths over 3,000m. The Opawica team is thrilled to be hitting visually exciting mineralisation at shallow depths."
In drill hole AR-22-04, at 129.9m to 146.8m a section of well silicified mafic tuff interbedded with felsic lapilli tuffs, quart-feldspar veins, and quartz veins, with bedding measured at 60⁰-50⁰ to core angle, pyrite varied from 1% to 10%, and trace amounts of pyrrhotite were intersected. Drill hole AR-22-04 was drilled at dip of 55⁰ at 187Az to a depth of 270 m. The true thickness of this section is not known. ( See figure below for picture of the drill core from AR-22-04. )
The Arrowhead Project is mainly covered by the metavolcanites of the Blake River Group. Strata are oriented east-west and present a subvertical dip. Volcanic and sedimentary rocks form a series of east-west-trending, steeply dipping monoclinal panels. The sequences are separated by longitudinal contacts parallel to the lithologies. In the southern part of Joannes township, the Cadillac Fault runs along an east-west axis over a lateral distance of about 150 kilometres. In the province of Quebec, more than 40 gold deposits that have produced over 60 million ounces of gold in the past hundred years and are associated with this major structure and its subsidiary faults. *
Click Image To View Full Size
Figure 1 Drill Hole AR-22-04 129.9m to 146.8m
Initial prospecting on the Arrowhead started in 1920 on the major shear zone located in the northern part of Opawica's property. In 1926, the exploration works consisted of prospecting, pitting, trenching and diamond drilling, mainly to test two shear zones containing quartz-carbonate veins with free gold. Gold values of up to 45.05 g/t were obtained over appreciable widths. Two main veins, designed as A and B, were explored. This work led to underground exploration that started in 1936. A three-compartment shaft was sunk to a depth of 154 metres. Levels were established at depths of 60.96 m (200 feet), 106.68 m (350 feet) and 152.40 m (500 feet). Drifting and crosscutting were carried out on all three levels on the A and B veins.
Assays are still pending on the Bazooka property which is an ongoing frustration. The Company is working with the labs to exercise a timelier process.
Derrick Strickland, P. Geo (OGQ No. 35402), has reviewed and approved the technical content of this news release. * The Qualified Person has been unable to verify the information on the adjacent properties. Mineralization hosted on adjacent and/or nearby and/or geologically similar properties is not necessarily indicative of mineralization hosted on the Company's properties.
About Opawica Explorations Inc.
Opawica Explorations Inc. is a junior Canadian exploration company with a strong portfolio of precious and base metal properties within the Rouyn-Noranda region of the Abitibi Gold Belt in Québec and in Central Newfoundland and Labrador. The Company's management has a great track record in discovering and developing successful exploration projects. The Company's objective is to increase shareholder value through the development of exploration properties using cost effective exploration practices, acquiring further exploration properties, and seeking partnerships by either joint venture or sale with industry leaders.
FOR FURTHER INFORMATION CONTACT
Blake Morgan
President and Chief Executive Officer
Telephone: 604-681-3170
Fax: 604-681-3552
Neither the TSX Venture Exchange nor its Regulation Service Provider (as the term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy of accuracy of this news release.
Forward-Looking Statements
This news release contains certain forward-looking statements, which relate to future events or future performance and reflect management's current expectations and assumptions. Such forward-looking statements reflect management's current beliefs and are based on assumptions made by and information currently available to the Company. Readers are cautioned that these forward-looking statements are neither promises nor guarantees, and are subject to risks and uncertainties that may cause future results to differ materially from those expected including, but not limited to, market conditions, availability of financing, actual results of the Company's exploration and other activities, environmental risks, future metal prices, operating risks, accidents, labor issues, delays in obtaining governmental approvals and permits, and other risks in the mining industry. All the forward-looking statements made in this news release are qualified by these cautionary statements and those in our continuous disclosure filings available on SEDAR at www.sedar.com. These forward-looking statements are made as of the date hereof and the Company does not assume any obligation to update or revise them to reflect new events or circumstances save as required by applicable law.
Copyright (c) 2022 TheNewswire - All rights reserved.
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Opawica Explorations Inc. (TSXV: OPW) (FSE: A2PEAD) (OTCQB: OPWEF) (the "Company" or "Opawica") is pleased to provide an update on the Arrowhead Property in Rouyn Noranda camp of the Abitibi in Quebec.
Highlights include:
Company president and chief executive officer, Blake Morgan, commented, "Drilling is progressing extremely well on our Arrowhead Property. With several visually exciting holes drilled, the team is looking forward to receiving the assay results. This new Yvan Zone has been a high priority to the Opawica geologists, and we are thrilled to not only have drilled a small portion of it, but to have hit visible gold, adding to our new potential extension theory."
In 2016, the Company collected a total of 36 rock outcrop samples over the entire property to cover the outcropping felsic volcanics. These samples were analysed for multi elements, whole rock oxides and rare earth elements to determine the geochemical alteration and element content. The objective of the rock outcrop geochemistry survey was to delineate favourable zones for gold-rich volcanogenic massive sulphide deposits.
Several type geological geochemistry indexes of the chemistry were generated, these included, PER-GH index, Ishikawa index, Sericite index, Chlorite index Spitz-Darling index, Alkali index, and CCPI (Chlorite Carbonate Pyrite Index). A summary of these indexes is present in Figure 1. Figure 1 visually illustrates four areas of interest. There are three areas on the western part of the property, where the much of the historical drill and current drill program is currently being undertaken, and one the area on the eastern side representing a new exploration target.
As a direct result of the 2016 rock analyses, the Company permitted and drilled two holes into the alteration index anomalies on the east side of the property. Holes AR-22-11 and AR-22-12 both have dip of 50⁰ at 175⁰ Az and depth of 447m and 468m respectively.
A preliminary review of the hole AR22-12 at 375m indicates the presence of a quartz vein structure ~ 3x2cm thick with a bleb of chalcopyrite and trace visible gold (Figure 2 below - the Yvan Zone). The gold occurs in Rhyolite- Felsic volcanic rock which is massive in appearance with weak/discrete foliation 70⁰ core access. The mineralization recognized in the core may represent an unknown extension for the known mineralization on the western part of the Arrowhead property.
Figure 1 - Rock Geochemistry Map
To view an enhanced version of Figure 1, please visit:
https://orders.newsfilecorp.com/files/1541/126863_f72ba8d364eafb39_001full.jpg
Figure 2 - New Zone Core Sample
To view an enhanced version of Figure 2, please visit:
https://orders.newsfilecorp.com/files/1541/126863_f72ba8d364eafb39_002full.jpg
The Arrowhead project is mainly covered by the metavolcanites of the Blake River Group. Strata are oriented east-west and present a subvertical dip. Volcanic and sedimentary rocks form a series of east-west-trending, steeply dipping monoclinal panels. The sequences are separated by longitudinal contacts parallel to the lithologies. In the southern part of Joannes township, the Cadillac Fault runs along an east-west axis over a lateral distance of about 150 kilometres. In the province of Quebec, more than 40 gold deposits that have produced over 60 million ounces of gold in the past hundred years and are associated with this major structure and its subsidiary faults. *
Derrick Strickland, P. Geo (OGQ No. 35402), has reviewed and approved the technical content of this news release. * The Qualified Person has been unable to verify the information on the adjacent properties. Mineralization hosted on adjacent and/or nearby and/or geologically similar properties is not necessarily indicative of mineralization hosted on the Company's properties.
About Opawica Explorations Inc.
Opawica Explorations Inc. is a junior Canadian exploration company with a strong portfolio of precious and base metal properties within the Rouyn-Noranda region of the Abitibi Gold Belt in Québec and in Central Newfoundland and Labrador. The Company's management has a great track record in discovering and developing successful exploration projects. The Company's objective is to increase shareholder value through the development of exploration properties using cost effective exploration practices, acquiring further exploration properties, and seeking partnerships by either joint venture or sale with industry leaders.
FOR FURTHER INFORMATION CONTACT
Blake Morgan
President and Chief Executive Officer
Opawica Explorations Inc.
Telephone: 604-681-3170
Fax: 604-681-3552
Neither the TSX Venture Exchange nor its Regulation Service Provider (as the term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy of accuracy of this news release.
Forward-Looking Statements
This news release contains certain forward-looking statements, which relate to future events or future performance and reflect management's current expectations and assumptions. Such forward-looking statements reflect management's current beliefs and are based on assumptions made by and information currently available to the Company. Readers are cautioned that these forward-looking statements are neither promises nor guarantees, and are subject to risks and uncertainties that may cause future results to differ materially from those expected including, but not limited to, market conditions, availability of financing, actual results of the Company's exploration and other activities, environmental risks, future metal prices, operating risks, accidents, labor issues, delays in obtaining governmental approvals and permits, and other risks in the mining industry. All the forward-looking statements made in this news release are qualified by these cautionary statements and those in our continuous disclosure filings available on SEDAR at www.sedar.com. These forward-looking statements are made as of the date hereof and the Company does not assume any obligation to update or revise them to reflect new events or circumstances save as required by applicable law.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/126863
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(TheNewswire)
Vancouver, British Columbia TheNewswire - June 2nd, 2022, (TSXV:OPW) (FSE:A2PEAD) (OTC:OPWEF) (the "Company" or "Opawica") is pleased to announce that it has completed filming for its upcoming educational documentary series "Viewpoint with Dennis Quaid" ( "Viewpoint" ). The long-running award-winning series, hosted by the well-known actor Dennis Quaid produces educational documentaries on a range of topics including business, technology, travel, health, and culture with a focus on highlighting innovation around the world. Viewpoint is distributed nationwide in the United States through public television stations and major networks; including but not limited to CNBC, FOX Business, Bloomberg TV, Discovery Channel, History Channel, National Geographic and HLN and is aired to over 60 million households in the United States.
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(TheNewswire)
Vancouver, British Columbia TheNewswire - June 1, 2022, (TSXV:OPW) (FSE:A2PEAD) (OTC:OPWEF) (the "Company" or "Opawica") is pleased to report the passing of all resolutions at the Annual General Meeting (" AGM ") held on Tuesday, May 31, 2022, in Vancouver, B.C.
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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 |
* 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/
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