Osisko Metals Incorporated (the " Company " or " Osisko Metals ") ( TSX-V: OM ; OTCQX: OMZNF ; FRANKFURT: 0B51 ) is pleased to announce that it expects to close its previously-announced transaction with a subsidiary of Appian Natural Resources Fund III LP (" Appian ") in late March or early April 2023 which will result in the formation of a joint venture for the advancement of Osisko Metals' Pine Point Project (the " Transaction "). To that end, the Company is pleased to announce that it has received the requisite shareholder and stock exchange approvals to close the Transaction.

Osisko Metals: Developing High-grade Base Metal Assets in Canada to Meet Future Demand
Osisko Metals (TSXV:OM)) focuses on two base metal assets in Canada as the demand for base metals is expected to continue to increase. The company's Gaspé Copper and Pine Point projects target copper and zinc, both critical minerals necessary for the global transition to clean energy. Both company assets are past-producing, brownfield assets that provide significant potential for future production.
The Gaspé Copper project in Quebec has a rapid development plan to begin mining the inferred 456 million tonnes of ore at 0.31 percent sulfide copper. As the gap between available copper supply and growing demand widens, Osisko Metals is well-positioned to help create and strengthen a domestic supply chain for the North American market.
The Pine Point Zinc-Lead project in the Northwest Territories, on the other hand, contains a mineral resource estimate of 15.8 million tonnes at 4.2 percent zinc and 1.5 percent lead, in addition to significant inferred resources.
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Osisko Metals
Overview
Osisko Metals (TSX:OM) is an exploration and development company focusing on two base metal assets in Canada - Gaspé Copper and Pine Point - targeting copper and zinc, both critical minerals necessary for the global transition to clean energy. Both company assets are past-producing, brownfield assets that provide significant potential for future production.
Demand for base metals is expected to continue to increase as the global transition towards a green economy and post-COVID activities in the construction and other industries ramp up, creating ideal economic conditions for Osisko’s projects.
The Gaspé Copper project in Quebec has a rapid development plan to begin mining the inferred 456 million tonnes of ore at 0.31 percent sulfide copper. As the gap between available copper supply and growing demand widens, Osisko Metals is well-positioned to help create and strengthen a domestic supply chain for the North American market.
The company’s Pine Point Zinc-Lead project in the Northwest Territories, on the other hand, contains a mineral resource estimate of 15.8 million tonnes at 4.2 percent zinc and 1.5 percent lead, in addition to significant inferred resources. Zinc is a necessary mineral for the clean energy transition and has important applications throughout the manufacturing industry. This widespread use for this mineral has analysts cautioning about a looming supply shortage.
A preliminary economic assessment (PEA) completed in 2022 indicates the Pine Point project has the potential to become a world-class, high-grade zinc asset, with an after-tax net present value (NPV) of C$602 million and internal rate of return (IRR) of 25 percent.
In February 2023, Osisko Metals announced a C$100-million investment agreement with Appian Natural Resources Fund III for a joint venture on the Pine Point Project. The agreement includes C$75.3 million of funding for the project and up to C$24.7M in cash payments to Osisko Metals.
With a management team that has a wide range of expertise throughout the natural resources industry, with experience in geology, exploration, corporate finance and corporate administration, the company is well-positioned to become a world-class supplier of base metals.
Company Highlights
- Osisko Metals is an exploration and development company focusing on two base metal assets in Canada containing copper and zinc.
- The company’s projects target critical metals to aid in the global transition to clean energy and net-zero emissions.
- Both of Osisko’s assets are past-producing brownfield projects with the potential to become significant base metal producers.
- The Gaspé Copper project in Quebec has a rapid development plan to begin capitalizing on its 456 million tonnes of ore at 0.31 percent sulfide copper to meet the needs of a growing supply gap.
- The Pine Point project in the Northwest Territories has the potential to become a top-ten zinc producer with high-grade zinc concentrates.
- C$100 million investment agreement with Appian Natural Resources Fund III for a joint venture on the Pine Point Project - including C$75.3 million of funding for the project
- A completed PEA indicates the Pine Point asset may have an after-tax IRR of 25 percent and an NPV of C$602 million.
- A management team with expertise throughout the mining industry leads the company toward achieving its goals of supplying the base metals necessary for the clean energy transition.
Key Projects
Gaspé Copper Project
The Gaspé Copper project in Quebec is among the most significant copper development projects in eastern North America. Additionally, Quebec has a well-known reputation of being one of the most mining-friendly jurisdictions in North America, with a long history of copper production.
Project Highlights:
- Significant Mineral Resource Estimate: The current NI 43-101 resource estimate for the asset demonstrates 3.1 billion pounds of contained copper at a 0.16 percent sulfide copper cut-off. Osisko Metals believes there is room to expand known deposits with its upcoming drill campaign. Drilling will also ascertain the potential for molybdenum and silver deposits for additional revenue.
- Prolific Past Production: The former Gaspé mines were in production from 1950 to 2002 and produced more than 100 million tonnes from a combination of open-pit and high-grade underground mines. The growing demand for copper makes reviving the project economically compelling.
- Robust Infrastructure: The project has infrastructure in place to quicken development, including paved road access, hydroelectric power on site and port access via the Saint Lawrence River and Gaspé.
Pine Point Zinc-Lead Project
The Pine Point asset in the Northwest Territories has the infrastructure in place to help the company move the project toward development. The project has an existing hydroelectric power substation on site, rail access within 60 kilometers and paved access roads to the site.
Project Highlights:
- Joint Venture: C$100 million investment agreement with Appian Natural Resources Fund III for a joint venture on the Pine Point Project - including C$75.3 million of funding for the project
- High-Grade Clean Concentrates: Pine Point has demonstrated the potential to produce one of the world’s cleanest concentrates for zinc and lead. Recent metallurgy assessment indicates high recoveries of 87 percent for zinc and 93 percent for lead using XRT sorting and conventional grinding and flotation processes. Additionally, studies indicate low deleterious elemental content.
- Promising Preliminary Economic Assessment: The 2022 PEA indicates an average annual life-of-mine production of 329 million pounds of zinc and 241 million pounds of lead. Additionally, the 2022 PEA indicates reduced estimated dewatering volume by 30 percent compared to the 2020 PEA.
- Community Support: Osisko Metals has worked hard to earn community support, recently announcing two separate collaboration agreements with local Indigenous communities: Deninu K’ue First Nation and Northwest Territory Metis Nation. These agreements include education, training, employment and business opportunities. Additionally, a 2017 exploration agreement was signed with K’atl’odeeche First Nation.
Management Team
Robert Wares - CEO
Robert Wares is a professional geologist with more than 35 years of experience in mineral exploration and development. He was responsible for the discovery of the Canadian Malartic bulk tonnage gold mine, which was subsequently developed by Osisko Mining Inc. into one of Canada’s largest gold producers. Among other awards, Wares was a co-winner of the Prospectors and Developers Association of Canada’s “Prospector of the Year Award” for 2007 and was named, together with John Burzynski and Sean Roosen, as “Mining Men of the Year” for 2009 by the Northern Miner. Wares sits on the board of directors of Brunswick Exploration Inc. Wares has a Bachelor of Science and an Honorary Doctorate in Earth sciences from McGill University.
Jeff Hussey - President and COO
Jeff Hussey has 32 years of professional experience in the mining industry. He has worked in both open-pit and underground mine operations at various stages of mine life, from start-up to mine closure, and more recently, working in mineral exploration and development projects. He spent 19 years with Noranda/Falconbridge. His mine operation experience includes work at the Brunswick No. 12 mine, Gaspé Copper mines, the Antamina mine start-up in Peru, as well as the Raglan mine in Northern Quebec. As senior scientist with the Mining Technology Group at the Noranda Technology Center in 2002, he enhanced his network into the metallurgical research and mining innovation fields. As a consultant since 2007, Jeff Hussey and Associates Inc. has helped junior mine development companies by offering exploration, mining and geo-metallurgical support services. These include Champion Iron Mines, Focus Graphite, Puma Exploration and Starcore International in Mexico. While at Champion Iron Mines, he participated in building significant high-quality iron ore resources, completing feasibility studies and participating in raising more than $70 million for corporate development. While working with Focus Graphite, development responsibilities included a feasibility study and associated work with community stakeholders and governments. Hussey has a Bachelor of Science in geology from the University of New Brunswick.
Anthony Glavac - Chief Financial Officer
Anthony Glavac has over 17 years of experience in financial reporting, including over 12 years in the mining industry. Since August 2017, Glavac has served as vice-president, corporate controller for Falco Resources Ltd. and previously served as director, financial reporting and internal controls at Dynacor Gold Mines, and interim chief financial officer at Alderon Iron Ore Corp. Prior to joining Alderon, Glavac spent 10 years at KPMG, working with both public and private companies, providing audit, taxation, strategic advisory and public offering services. Glavac is also involved with other public companies in the mining industry.
Robin Adair - Vice-president Exploration
Robin Adair is a professional geologist with over thirty-three years of experience in base metals exploration and development including project acquisition, exploration and discoveries, development and production. Adair spent the majority of his career working for Noranda/Falconbridge, holding several senior positions including senior manager, zinc exploration. During this time, he spent 11 years in the Bathurst camp where he is credited with a number of significant discoveries leading to production. In later years, Adair worked in base metal exploration throughout Quebec and Canada as well as internationally. He was also a key member of the team that discovered and developed the Bracemac-McLead mine in the Matagami camp in Quebec. His technical experience encompasses resource estimation, predictive metallurgical studies, environmental impact assessments, NI 43-101 reporting, negotiation of joint-venture agreements, corporate development and community relations. Adair received his B.Sc. and M.Sc. in geology from the University of Alberta and is a registered professional geologist and qualified person. He is currently an honorary research associate at the University of New Brunswick and works with the mineral deposits group.
Osisko Metals Announces Receipt of Shareholder and Stock Exchange Approvals for Appian Joint Venture Transaction
Pursuant to the policies of the TSX Venture Exchange (the " Exchange "), the Company is permitted to obtain shareholder approval of the Transaction by way of a written consent of the shareholders holding at least 50% of the outstanding common shares of the Company. As at March 17, 2023, the Company received written consents in respect of the Transaction from shareholders holding an aggregate of 122,018,186 Common Shares, representing approximately 54.1% of the outstanding common shares of the Company.
In addition, on March 16, 2023, the Company received the conditional approval of the Exchange to complete the Transaction. The Transaction remains subject to final acceptance of the Exchange.
Robert Wares, Chairman & CEO, commented : "We are very grateful for the support of our shareholders regarding the joint venture transaction with Appian on the Pine Point Project. Having expeditiously obtained the required shareholder and stock exchange approvals, we expect to be able to close the joint venture transaction in late March or early April 2023. On behalf of the Board of Directors of Osisko Metals, we thank our shareholders, management, and our advisors and partners for their hard work and long-standing support, and we look forward to rapidly advancing the Pine Point project with Appian."
Completion of the Transaction remains subject to, among other things, satisfaction of all conditions precedent to the closing of the Transaction pursuant to the investment agreement dated February 21, 2023 between the Company and Appian in respect of the Transaction (the " Investment Agreement "). Assuming that all conditions precedent to the completion of the Transaction are satisfied or waived, the Company anticipates the closing of the Transaction will occur in late March or early April 2023.
For more details on the Transaction, please refer to the Company's news release on February 22, 2023, the material change report dated February 27, 2023 and the Investment Agreement, copies of which are available on SEDAR ( www.sedar.com ) under the Company's issuer profile.
Advisors
Maxit Capital LP is acting as financial advisor to Osisko Metals and Bennett Jones LLP is acting as the Company's legal counsel.
McCarthy Tétrault LLP is acting as Appian's legal counsel.
About Osisko Metals
Osisko Metals Incorporated is a Canadian exploration and development company creating value in the critical metals space, specifically copper and zinc. The Company controls one of Canada's premier past-producing zinc mining camps, the Pine Point Project, located in the Northwest Territories, for which the 2022 PEA has indicated an after-tax NPV of $602M and an IRR of 25%, based on long-term zinc price of US$1.37/lb and the current Mineral Resource Estimates (" MRE ") that are amenable to open pit and shallow underground mining. The latest MRE consist of 15.7Mt grading 5.55% ZnEq of Indicated Mineral Resources and 47.2Mt grading 5.94% ZnEq of Inferred Mineral Resources. Please refer to the technical report entitled "Preliminary Economic Assessment, Pine Point Project, Hay River, Northwest Territories, Canada" dated July 30, which has been filed on SEDAR. The Pine Point Project is located on the south shore of Great Slave Lake in the Northwest Territories, near infrastructure, paved highway access, and has an electrical substation as well as 100 kilometres of viable haulage roads already in place.
The Company is also in the process of acquiring, from Glencore Canada, a 100% interest in the past-producing Gaspé Copper Mine, located near Murdochville in the Gaspé peninsula of Quebec. The Company is currently focused on resource evaluation of the Mount Copper Expansion Project that hosts a NI 43-101 Inferred Resource of 456Mt grading 0.31% Cu (see April 28, 2022 news release). Gaspé Copper hosts the largest undeveloped copper resource in Eastern North America, strategically located near existing infrastructure in the mining-friendly province of Quebec.
About Appian
Appian Capital Advisory LLP is a London-headquartered investment advisor to long-term value-focused private equity funds that invest solely in mining and mining-related companies.
Appian is a leading investment advisor in the metals and mining industry, with global experience across South America, North America, Europe, Australia and Africa and a successful track record of supporting companies to achieve their development targets, with a global operating portfolio overseeing nearly 5,000 employees. Appian has a global team of 60 experienced professionals with presences in London, Toronto, Montreal, Vancouver, Lima, Belo Horizonte and Perth. The Appian team, through its private equity funds, has a long history of successfully bringing mines through development and into production, having completed 8 mine builds in the last 5 years.
For more information, please visit www.appiancapitaladvisory.com , or find us on LinkedIn, Instagram and Twitter.
For further information on this news release, visit www.osiskometals.com or contact:
Robert Wares, Chairman & CEO of Osisko Metals Incorporated
Email: info@osiskometals.com
www.osiskometals.com
Cautionary Statement on Forward-Looking Information
This news release contains "forward-looking information" within the meaning of applicable Canadian securities legislation based on expectations, estimates and projections as at the date of this news release. Any statement that involves predictions, expectations, interpretations, beliefs, plans, projections, objectives, assumptions, future events or performance are not statements of historical fact and constitute forward-looking information. This news release may contain forward-looking information pertaining to the Pine Point Project, including, among other things, the results of the PEA and the IRR, NPV and estimated costs, production, production rate and mine life; the expectation that the Pine Point Project will be a robust operation and profitable at a variety of prices and assumptions; the ability to identify additional resources and reserves (if any) and exploit such resources and reserves on an economic basis; the expected high quality of the Pine Point concentrates; the potential impact of the Pine Point Project in the Northwest Territories, including but not limited to the potential generation of tax revenue and contribution of jobs; the Pine Point Project having the potential for mineral resource expansion and new discoveries; the timing and ability for the Pine Point Project to reach construction decision; the estimated costs to take the Pine Point Project to construction decision; the timing and ability to complete the Transaction on the terms contemplated (if at all); the ability of the Company to realize on the benefit of the Transaction; and the impact to the Company of the disposition of ownership interest and control in the Pine Point Project, which is a material property of the Company. There can be no certainty on the timing, costs and ability for the joint-venture parties to take the Pine Point Project to reach construction decision or pursue planned exploration and development as presently contemplated.
Forward-looking information is not a guarantee of future performance and is based upon a number of estimates and assumptions of management, in light of management's experience and perception of trends, current conditions and expected developments, as well as other factors that management believes to be relevant and reasonable in the circumstances, including, without limitation, assumptions about: favourable equity and debt capital markets; the ability and timing for the parties to fund cash calls to advance the development of the Pine Point Project and pursue planned exploration and development; the ability to complete the Transactions in the timing and terms contemplated (if at all); the ability to satisfy or waive on satisfactory terms any conditions to the completion of the Transaction; future prices of zinc and lead; the timing and results of exploration and drilling programs; the accuracy of mineral resource estimates; production costs; operating conditions being favourable; political and regulatory stability; the receipt of governmental and third party approvals; licenses and permits being received on favourable terms; sustained labour stability; stability in financial and capital markets; availability of equipment; the economic viability of the Pine Point Project; and positive relations with local groups. Forward-looking information involves risks, uncertainties and other factors that could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information. Factors that could cause actual results to differ materially from such forward-looking information are set out in the Company's public documents filed at www.sedar.com . Although the Company believes that the assumptions and factors used in preparing the forward-looking information in this news release are reasonable, undue reliance should not be placed on such information, which only applies as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames or at all. The Company disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, other than as required by law.
Neither the Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Exchange) accept responsibility for the adequacy or accuracy of this news release. No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein.
News Provided by GlobeNewswire via QuoteMedia
Osisko Metals Inc Announces Participation in Red Cloud's 2023 Pre-PDAC Mining Showcase
Osisko Metals Inc (TSXV: OM) is pleased to announce that the Company will be presenting at Red Cloud's Pre-PDAC 2023 Mining Showcase. We invite our shareholders and all interested parties to join us.
The annual conference will take place in-person at the Sheraton Centre Toronto Hotel from March 2-3, 2023.
Robert Wares will be presenting on March 2nd at 9:30 Eastern Standard time.
For more information and/or to register for the conference please visit: https://redcloudfs.com/prepdac2023/.
We look forward to seeing you there.
About Osisko Metals Inc
The global push towards decarbonization to combat climate change has led to an unprecedented shift in energy transition metals such as copper and zinc. Coupled with uncertain supply in politically sensitive regions, Osisko Metals is at the forefront of a new generation of mining companies looking to restart project in historical mining camps through its lead-zinc Pine Point Project and the Gaspé Copper Project. We intend to make Osisko Metals the leading base metal developer in North America.
For further information:
Osisko Metals Inc
Kimberly Darlington
Investor Relations
(514) 989-7970
Kimberly@refinedsubstance.com
Alex@refinedsubstance.com
News Provided by Newsfile via QuoteMedia
Osisko Metals Signs C$100 Million Investment Agreement With Appian Natural Resources Fund for a Joint Venture on Pine Point
Osisko Metals Incorporated (the " Company or " Osisko Metals ") ( TSX-V: OM ; OTCQX: OMZNF ; FRANKFURT: 0B51 ) is pleased to announce that it has entered into an investment agreement dated February 21, 2023 (the " Investment Agreement ") with a subsidiary of Appian Natural Resources Fund III LP (" Appian "), a fund advised by Appian Capital Advisory LLP, a London-based private equity group specializing in the acquisition and development of mining assets, pursuant to which Osisko Metals and Appian have agreed to form a joint venture for the advancement of the Pine Point Project (the " Transaction "), subject to satisfaction of certain terms and conditions, including shareholder and stock exchange approvals. The Transaction is an arm's length transaction within the policies of the TSX Venture Exchange (the " Exchange ").
Highlights
- Commitment by Appian to invest up to C$100 million over an estimated four-year period, to acquire an undivided 60% interest in Pine Point Mining Limited (" PPML "), a wholly-owned subsidiary of Osisko Metals and owner of the Pine Point Project, at a pre-money valuation of PPML of C$91.3 million.
- The C$100 million investment includes an estimated C$75.3 million of funding (C$19.8 million of which will be provided upon establishment of the joint venture, the " Initial Subscription ") to advance the Pine Point Project to a Final Investment Decision (" FID "), or construction approval, and approximately C$24.7 million in cash payments to Osisko Metals, comprised of:
- A C$8.3 million initial payment on closing of the Transaction to acquire an initial 9% interest in PPML; and
- A milestone payment upon positive FID to bring Appian's ownership in PPML to 60%, expected to be approximately C$16.4 million. The final milestone payment will increase or decrease should the actual amount spent to FID differ from the estimated budget of C$75.3 million.
- In addition, Appian has agreed to make a C$5 million investment in the common shares of Osisko Metals on closing, priced at C$0.2481 per share (being the 20-day VWAP calculated as of the date of this announcement).
Robert Wares, Chairman & CEO, commented: "We are delighted to welcome Appian as a long-term joint-venture partner for the advancement of the Pine Point Project. This milestone agreement is a significant endorsement and daylights the considerable intrinsic value of Pine Point. The Transaction allows us to leverage Appian's extensive mine development experience and includes a crucial investment of C$75 million into the Project that will advance the development of Pine Point to a "shovel-ready" status. This funding is expected to cover all costs including final definition drilling, additional exploration drilling, feasibility, environmental assessment and permitting, including Indigenous engagements. This joint venture, coupled with Appian's significant cash payments to Osisko Metals and C$5 million equity investment, will allow Osisko Metals to focus on the development of other projects while avoiding excessive dilution to advance the Pine Point Project."
Summary of Joint Venture
Osisko Metals and Appian have agreed to a budget to fund Pine Point to FID as follows:
Definition and Exploration Drilling | C$25.2 million |
Permitting and G&A | C$29.3 million |
Feasibility and Technical Studies | C$8.7 million |
Metallurgical Optimization Studies | C$1.0 million |
Geotech/Hydrogeological Studies | C$4.3 million |
Contingencies | C$6.8 million |
Total | C$75.3 million |
Subsequent to the closing of the Transaction and until Appian has acquired an ownership interest of 60% in PPML (the " Target Ownership Percentage "), all funding in respect of the Pine Point Project will be made by way of cash calls issued by the board of PPML to Appian, the quantum and speed of which are determined at the sole discretion of the board of directors of PPML. The Company will not be required to make any cash contributions to PPML until Appian has reached the Target Ownership Percentage, following which cash calls will be satisfied by each of Appian and Osisko Metals on a pro-rata basis pursuant to approved annual programs and budgets as determined by the board of PPML. Pursuant to the terms of the Investment Agreement, in the event of a protracted intervening event, Appian has a unilateral right to terminate its investment commitment.
The board of directors of PPML will initially consist of four directors with two nominees from Appian and two nominees from Osisko Metals. Appian will be entitled to appoint the Chair and the Chair will have the casting vote. Upon Appian earning an interest in PPML above 50%, the board of directors will consist of five directors with three nominees from Appian and two nominees from Osisko Metals. The board of directors of PPML will be responsible for, among other things, approving PPML's annual programs and budgets. Certain material decisions will require a super-majority approval by the board of directors.
The joint venture agreement in respect of the Transaction, to be signed upon closing of the Transaction, contains customary dilution mechanisms for failures to meet cash calls and certain other events, as well as customary share transfer restrictions.
Jeff Hussey, President & COO of Osisko Metals, will assume the role of Chief Executive Officer of PPML and spearhead the initiative to advance Pine Point to FID. There are no changes contemplated to the board of directors of Osisko Metals in connection with the Transaction.
Transaction Details
The Transaction is considered as a "reviewable disposition" under Policy 5.3 of the Exchange, as it is a potential disposition of more than 50% of the ownership interest in the Pine Point Project, which is Osisko Metal's only material property as of the date hereof. The Transaction is subject to the simple majority approval of Osisko Metals' shareholders, Exchange approval and other closing conditions customary in transactions of this nature. There is no certainty on the timing or ability of Osisko Metals to complete the Transaction on the terms currently contemplated. The Investment Agreement includes, among other things, a non-solicitation provision and a C$4.5 million termination fee payable by Osisko Metals to Appian under certain circumstances.
Concurrent with closing of the Transaction, Osisko Metals and Appian will enter into an investor rights agreement (the " Investor Rights Agreement "). The Investor Rights Agreement includes, among other things, pre-emptive and top-up rights in favor of Appian, a standstill provision for a period of 12 months and a share transfer restriction provision for a period of six months.
Osisko Metals believes that it will be in compliance with all continued listing requirements of the Exchange following the completion of the Transaction. Osisko Metals expects to continue to meet public float requirements and have sufficient working capital and financial resources as well as experienced management and board. Although the Transaction contemplates a disposition of up to 60% in the Pine Point Project, Osisko Metals will maintain a substantial 40% interest in the Pine Point Project. In addition, Osisko Metals had exercised the option to earn a 100% interest in the past-producing Gaspé Copper Mine with an inferred mineral resource estimate on the Gaspé property effective April 12, 2022. No assurance can be provided as to Osisko Metals' continued qualification for listing on the Exchange, whether as a Tier 1 issuer or otherwise. The Transaction, including the C$5 million investment by Appian in the common shares of Osisko Metals, remains subject to the approval of the Exchange.
For more details on the terms of the Transaction, please refer to a copy of the Investment Agreement, which will be available electronically on SEDAR ( www.sedar.com ) under Osisko Metals' issuer profile.
Fairness Opinion
Maxit Capital LP has provided a fairness opinion to the board of directors of Osisko Metals. The fairness opinion stated that, as of the date thereof and, based upon and subject to the assumptions, limitations and qualifications stated in such opinion, the Transaction is fair, from a financial point of view, to the Company.
Board Approval
The board of directors of Osisko Metals, following consultation with their financial and legal advisors, has unanimously approved the Transaction. The Board of Directors of Osisko Metals recommends that shareholders vote FOR the Transaction.
Voting Support Agreements
Shareholders collectively owning approximately 18.7% of the outstanding shares of Osisko Metals as of the date hereof have entered into voting support agreements with Appian in support of the Transaction. Directors and senior officers of Osisko Metals collectively owning approximately 18.2% of the outstanding shares of Osisko Metals have entered into voting support agreements to support the Transaction. It is currently anticipated that the closing of the Transaction will occur on or about late Q1 2023 or early Q2 2023.
Interim Funding
Concurrent with the execution with the Investment Agreement, Osisko Metals and Appian entered into an agreement for the issuance of a convertible instrument to provide PPML with short-term interim funding of up to C$11.5 million to fund the current drilling program on the Pine Point Project, in accordance with the agreed initial program and budget. The current 29,000-metre winter definition drilling program is progressing as planned with six drill rigs operating and this program, with associated costs, will be integrated into the Investment Agreement and pre-FID budget, retroactively as of December 1, 2022.
If the Investment Agreement is terminated and the Transaction does not close, the principal amount then outstanding under the convertible instrument would then become repayable. Subject to the approval of the Exchange at such a repayment event, the amount then outstanding under the convertible instrument would be repaid by the issuance of common shares of Osisko Metals, at the minimum permitted price under the policies of the Exchange, for up to 19.95% of the pro forma number of issued and outstanding common shares of Osisko Metals, and the remaining amount (if any) will be converted into a senior secured term loan.
If the Transaction is completed, any outstanding amounts under the convertible instrument would be converted into an ownership interest in PPML and the Initial Subscription would be reduced for the amounts outstanding under the convertible instrument. Such a conversion is subject to the acceptance of the Exchange in respect of the Transaction as a whole.
Advisors and Counsel
Maxit Capital LP is acting as financial advisor to Osisko Metals and Bennett Jones LLP is acting as the Company's legal counsel.
McCarthy Tétrault LLP is acting as Appian's legal counsel.
Qualified Person
Mr. Robin Adair is the Qualified Person and the Vice President of Exploration for Osisko Metals Incorporated. He is responsible for the technical data reported in this news release and is a Professional Geologist registered in the Northwest Territories.
About Osisko Metals
Osisko Metals Incorporated is a Canadian exploration and development company creating value in the critical metals space, specifically copper and zinc. The Company controls one of Canada's premier past-producing zinc mining camps, the Pine Point Project, located in the Northwest Territories, for which the 2022 PEA has indicated an after-tax NPV of $602M and an IRR of 25%, based on a long-term zinc price of US$1.37/lb and the current Mineral Resource Estimates ("MRE") that are amenable to open pit and shallow underground mining. The latest MRE consists of 15.7Mt grading 5.55% ZnEq of Indicated Mineral Resources and 47.2Mt grading 5.94% ZnEq of Inferred Mineral Resources. Please refer to the technical report entitled "Preliminary Economic Assessment, Pine Point Project, Hay River, Northwest Territories, Canada" dated July 30, which has been filed on SEDAR. The Pine Point Project is located on the south shore of Great Slave Lake in the Northwest Territories, near infrastructure, paved highway access, and has an electrical substation as well as 100 kilometres of viable haulage roads already in place.
The Company is also in the process of acquiring, from Glencore Canada, a 100% interest in the past-producing Gaspé Copper Mine, located near Murdochville in the Gaspé peninsula of Quebec. The Company is currently focused on resource evaluation of the Mount Copper Expansion Project that hosts a NI43-101 Inferred Resource of 456Mt grading 0.31% Cu (see April 28, 2022 press release). Gaspé Copper hosts the largest undeveloped copper resource in Eastern North America, strategically located near existing infrastructure in the mining-friendly province of Quebec.
About Appian
Appian Capital Advisory LLP is a London-headquartered investment advisor to long-term value-focused private equity funds that invest solely in mining and mining-related companies.
Appian is a leading investment advisor in the metals and mining industry, with global experience across South America, North America, Europe, Australia and Africa and a successful track record of supporting companies to achieve their development targets, with a global operating portfolio overseeing nearly 5,000 employees. Appian has a global team of 60 experienced professionals with presences in London, Toronto, Montreal, Vancouver, Lima, Belo Horizonte and Perth. The Appian team, through its private equity funds, has a long history of successfully bringing mines through development and into production, having completed 8 mine builds in the last 5 years.
For more information, please visit www.appiancapitaladvisory.com, or find us on LinkedIn, Instagram and Twitter.
For further information on this press release, visit www.osiskometals.com or contact:
Robert Wares, Chairman & CEO of Osisko Metals Incorporated
Email: info@osiskometals.com
www.osiskometals.com
Cautionary Statement on Forward-Looking Information
This news release contains "forward-looking information" within the meaning of applicable Canadian securities legislation based on expectations, estimates and projections as at the date of this news release. Any statement that involves predictions, expectations, interpretations, beliefs, plans, projections, objectives, assumptions, future events or performance are not statements of historical fact and constitute forward-looking information. This news release may contain forward-looking information pertaining to the Pine Point Project, including, among other things, the results of the PEA and the IRR, NPV and estimated costs, production, production rate and mine life; the expectation that the Pine Point Project will be a robust operation and profitable at a variety of prices and assumptions; the ability to identify additional resources and reserves (if any) and exploit such resources and reserves on an economic basis; the expected high quality of the Pine Point concentrates; the potential impact of the Pine Point Project in the Northwest Territories, including but not limited to the potential generation of tax revenue and contribution of jobs; the Pine Point Project having the potential for mineral resource expansion and new discoveries; the timing and ability for the Pine Point Project to reach construction decision; the estimated costs to take the Pine Point Project to construction decision; the timing and ability to complete the Transaction on the terms contemplated (if at all); the ability of the Company to realize on the benefit of the Transaction; and the impact to the Company of the disposition of ownership interest and control in the Pine Point Project, which is a material property of the Company. There can be no certainty on the timing, costs and ability for the joint-venture parties to take the Pine Point Project to reach construction decision or pursue planned exploration and development as presently contemplated.
Forward-looking information is not a guarantee of future performance and is based upon a number of estimates and assumptions of management, in light of management's experience and perception of trends, current conditions and expected developments, as well as other factors that management believes to be relevant and reasonable in the circumstances, including, without limitation, assumptions about: favourable equity and debt capital markets; the ability and timing for the parties to fund cash calls to advance the development of the Pine Point Project and pursue planned exploration and development; the ability to complete the Transactions in the timing and terms contemplated (if at all); the ability to satisfy or waive on satisfactory terms any conditions to the completion of the Transaction (including but not limited to, the Exchange acceptance and shareholder approval of the Transaction); future prices of zinc and lead; the timing and results of exploration and drilling programs; the accuracy of mineral resource estimates; production costs; operating conditions being favourable; political and regulatory stability; the receipt of governmental and third party approvals; licenses and permits being received on favourable terms; sustained labour stability; stability in financial and capital markets; availability of equipment; the economic viability of the Pine Point Project; and positive relations with local groups. Forward-looking information involves risks, uncertainties and other factors that could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information. Factors that could cause actual results to differ materially from such forward-looking information are set out in the Company's public documents filed at www.sedar.com . Although the Company believes that the assumptions and factors used in preparing the forward-looking information in this news release are reasonable, undue reliance should not be placed on such information, which only applies as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames or at all. The Company disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, other than as required by law.
Neither the Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Exchange) accept responsibility for the adequacy or accuracy of this news release. No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein.
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Hudbay Provides Annual Reserve and Resource Update
- Annual copper production from Constancia is expected to average 110,000 i tonnes over the next three years, a 23% increase from 2022 levels.
- Annual gold production from Snow Lake is expected to average more than 190,000 i ounces over the next three years, a 30% increase from 2022 levels.
- Peru concentrate inventory levels at site have reached normal levels ahead of schedule after full resumption of transportation activities.
- Mining of the higher-grade ore at Pampacancha is now expected in the second quarter of 2023, ahead of schedule.
- Copper mineral resource estimates increase year-over-year with the incorporation of the positive Copper World PEA and initial mineral resource estimate at Llaguen.
- Exploration activities in Peru are focused on ground geophysics and drill permitting for highly prospective satellite properties while evaluating the potential for reserve expansion at Constancia and Pampacancha through future mining phases.
- Exploration activities in Snow Lake are prioritizing step-out drilling for new discoveries to support future growth with preliminary results indicating the alteration zone hosting the mineralized system at Lalor continues down dip for two kilometres.
- De-risking activities at Copper World are focused on completing a pre-feasibility study in mid-2023 and obtaining state level permits.
- Recent geophysical surveys, which identify the potential for high-grade skarn and large porphyry targets on private land claims near Mason, will be used to finalize a drill program to test these targets in late 2023.
Hudbay Minerals Inc. ("Hudbay" or the "company") ( TSX, NYSE: HBM) today released its annual mineral reserve and resource update and issued new three-year production guidance. All amounts are in U.S. dollars, unless otherwise noted.
"Our greenfield exploration efforts successfully increased our copper mineral resources last year with the release of our Copper World PEA and the initial resource estimate at Llaguen," said Peter Kukielski, Hudbay's President and Chief Executive Officer. "Our 2023 exploration program is focused on high-potential opportunities to expand mineralization near our operations in Peru and Manitoba to position us for additional long-term reserves growth. We already have long lives at our existing operations, and we expect to add to our robust production outlook by leveraging our proven track record of delivering value through exploration and development as we advance our quality pipeline of growth assets."
Constancia Operations
Current mineral reserve estimates total 492 million tonnes at 0.30% copper with approximately 1.5 million tonnes of contained copper. Constancia's expected mine life has been maintained and extends until 2038. The copper contained in measured and indicated mineral resources has increased in 2023 due to infill drilling success in converting inferred mineral resources.
Hudbay released an updated mine plan for Constancia in 2021 that reflected an increase in copper and gold production as the higher grades from the Pampacancha deposit were expected to enter the mine plan over the 2022 to 2024 period. The mine plan also incorporated higher-grade reserves from the Constancia Norte pit extension. In late 2022 and early 2023, regional road blockades in Peru limited the ability to transport fuel and concentrate, but the Constancia mill continued to steadily operate as the company implemented risk mitigation plans with strong support from the local communities. As a result of processing stockpiles to lower fuel consumption in early 2023, Pampacancha's mine life has now been extended into the first half of 2025. Annual production at the Constancia operations is expected to average approximately 110,000 i tonnes of copper and 87,000 i ounces of gold over the next three years, a respective 23% and 49% increase from 2022 levels.
In 2021, Hudbay also completed an internal scoping study which resulted in an inferred mineral resource estimate of 6.5 million tonnes at 1.2% copper in two high grade skarn lenses located below the open pit in the Constancia Norte area. The study concluded these two lenses could be mined by underground methods starting in 2029 to supplement the open pit production.
Current mineral reserves and resources (exclusive of reserves) for Constancia and Pampacancha as of January 1, 2023 are summarized below.
Constancia Operations Mineral Reserve and Resource Estimates 1 ,2,3,4 | Tonnes | Cu Grade (%) | Mo Grade (g/t) | Au Grade (g/t) | Ag Grade (g/t) | |
Constancia Reserves | ||||||
Proven | 411,200,000 | 0.28 | 79 | 0.041 | 2.85 | |
Probable | 46,500,000 | 0.23 | 79 | 0.038 | 2.84 | |
Total Proven and Probable - Constancia | 457,700,000 | 0.28 | 79 | 0.040 | 2.85 | |
Pampacancha Reserves | ||||||
Proven | 34,100,000 | 0.59 | 153 | 0.320 | 4.98 | |
Probable | 300,000 | 0.17 | 306 | 0.119 | 2.29 | |
Total Proven and Probable - Pampacancha | 34,400,000 | 0.59 | 155 | 0.319 | 4.96 | |
Total Proven and Probable | 492,100,000 | 0.30 | 85 | 0.060 | 2.99 | |
Constancia Resources | ||||||
Measured | 118,400,000 | 0.20 | 62 | 0.036 | 1.86 | |
Indicated | 140,700,000 | 0.23 | 73 | 0.040 | 2.20 | |
Inferred – Open Pit | 56,700,000 | 0.27 | 82 | 0.044 | 1.86 | |
Inferred – Underground | 6,500,000 | 1.20 | 69 | 0.137 | 8.62 | |
Pampacancha Resources | ||||||
Measured | 9,100,000 | 0.35 | 103 | 0.230 | 6.01 | |
Indicated | 300,000 | 0.16 | 173 | 0.173 | 2.62 | |
Inferred | 900,000 | 0.15 | 118 | 0.103 | 2.86 | |
Total Measured and Indicated | 268,500,000 | 0.22 | 69 | 0.045 | 2.18 | |
Total Inferred | 64,100,000 | 0.36 | 81 | 0.054 | 2.56 |
Note: totals may not add up correctly due to rounding.
1 Mineral resources are exclusive of mineral reserves and do not have demonstrated economic viability.
2 Mineral resources are based on resource pit design and do not include factors for mining recovery or dilution.
3 The open pit mineral reserves and resources are estimated using a minimum NSR cut-off of $6.40 per tonne and assuming metallurgical recoveries (applied by ore type) of 86% for copper on average for the life of mine, while the underground inferred resources at Constancia Norte are based on a 0.65% copper cut-off grade.
4 Long-term metal prices of $3.60 per pound copper, $12.00 per pound molybdenum, $1,650 per ounce gold, and $22.00 per ounce silver were used to estimate mineral reserves and resources.
Constancia and Pampacancha In-Mine Exploration
A drill program is underway at the Pampacancha deposit to test the potential to add an incremental phase to the reserve pit at depth. The company is also planning a limited drill program and technical evaluations at the Constancia deposit to confirm the economic viability of adding an additional mining phase to the current mine plan that would convert a portion of the mineral resources to mineral reserves. The results from these drill programs and technical and economic evaluations are expected to be incorporated in the next annual mineral reserve and resource update.
Maria Reyna and Caballito 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. The company commenced early exploration activities and ground geophysical surveys at Maria Reyna and Caballito after completing a surface rights exploration agreement with the community of Uchucarcco in August 2022. Surface investigation activities together with baseline environmental and archaeological activities necessary to support drill permit applications have been completed. Drill permit applications are expected to be submitted in May. Ground activities and geophysical surveys are underway and field evidence confirms that both Caballito and Maria Reyna host sulfide and oxide rich copper mineralization in skarns, hydrothermal breccias and large porphyry intrusive bodies.
Peru Logistics and Mining Activities Normalized
Social unrest and road blockades in Peru, following a change in the country's political leadership in December 2022, have continued to abate since mid-February 2023. Transportation of Constancia's concentrate and critical supplies has now returned to normal. As a result, Hudbay has significantly decreased the level of concentrate inventories at site to less than 7,000 wet metric tonnes as of the end of March from a peak of 47,000 wet metric tonnes in mid-February. Hudbay has been able to complete several port shipments in March and expects to reach normal concentrate inventory levels at the port in April, ahead of schedule.
In addition, full mining activities resumed in the Pampacancha pit in February and the period of higher stripping from March to June is progressing well with mining of higher-grade ore now expected in the second quarter of 2023, slightly ahead of schedule.
Snow Lake Operations
Current mineral reserve estimates in Snow Lake total 18 million tonnes with approximately 2.1 million ounces in contained gold, and the expected mine life of the Snow Lake operations has been maintained and extends until 2038. With the Snow Lake operations achieving higher production levels after the full ramp-up of the New Britannia mill in 2022 and the transition of the Flin Flon workforce and equipment to the Lalor mine, exploration activities are now prioritizing step-out drilling to identify opportunities for meaningful additions to the mineral resource base to support future growth.
Exploration efforts in 2022 focused on increasing inferred gold resources at the 1901 deposit, which offset converted inferred mineral resources at Lalor. As a result, total gold contained in inferred resources was unchanged at 1.7 million ounces. This indicates a potential to maintain strong production levels beyond 2030 and further extend the mine life in Snow Lake.
Hudbay has been executing a multi-phased gold strategy in Snow Lake since 2019, which has resulted in increased annual gold production from optimization initiatives, including higher processing capacity and gold recoveries since the start-up of the New Britannia mill in late 2021. As a result, annual gold production from Snow Lake increased to 146,233 ounces in 2022, New Britannia's first full year of production, representing a 110% increase from 69,657 ounces in 2020. The New Britannia mill consistently achieved its nameplate capacity of 1,500 tonnes per day throughout 2022 and is expected to operate at 1,650 tonnes per day in 2023 with the opportunity to further exceed targeted levels in the future. Annual gold production from Snow Lake is expected to average more than 190,000 i ounces over the next three years, which represents a further increase of 30% from 2022 levels.
There are several opportunities to enhance the Snow Lake operations through exploration upside and mill processing projects. The Stall mill recovery improvement program is currently well-advanced and is expected to result in higher gold and copper recoveries starting in the second quarter of 2023. Hudbay has also completed an internal pre-feasibility study on a second phase of the Stall mill recovery improvement program which demonstrates the potential for a further increase in gold recoveries at Stall starting in 2025 by producing a lead concentrate through gravity separation.
The Lalor mine continues to advance several key initiatives to increase efficiency and support higher production levels beyond the current 4,650 tonnes per day, including building long-hole inventory, improving stope muck fragmentation and optimizing the development drift size. The company is also focused on maximizing production from the shaft to enable more ore to be hoisted to surface while reducing inefficient trucking of ore via the ramp, which is expected to lower operating costs and greenhouse gas emissions.
Current mineral reserves and resources (exclusive of reserves) for Lalor, 1901 and other Snow Lake satellite deposits as of January 1, 2023 are summarized below.
Lalor Mine and 1901 Deposit Mineral Reserve and Resource Estimates 1 ,2,3,4,5,6,7 | Tonnes | Au Grade (g/t) | Zn Grade (%) | Cu Grade (%) | Ag Grade (g/t) | |
Base Metal Zone Reserves | ||||||
Proven – Lalor | 5,977,000 | 2.5 | 5.17 | 0.42 | 28.7 | |
Proven – 1901 | 1,278,000 | 2.2 | 8.14 | 0.30 | 27.4 | |
Probable – Lalor | 522,000 | 2.6 | 4.59 | 0.36 | 30.3 | |
Probable – 1901 | 245,000 | 0.8 | 10.7 | 0.30 | 25.2 | |
Total Proven and Probable - Base Metal | 8,022,000 | 2.5 | 5.77 | 0.39 | 28.5 | |
Gold Zone Reserves | ||||||
Proven – Lalor | 3,345,000 | 5.1 | 0.77 | 0.54 | 29.2 | |
Proven – 1901 | 101,000 | 2.9 | 1.32 | 1.00 | 19.2 | |
Probable – Lalor | 3,779,000 | 5.5 | 0.41 | 1.12 | 25.6 | |
Probable – 1901 | 54,000 | 1.7 | 0.45 | 1.82 | 5.6 | |
Total Proven and Probable - Gold | 7,279,000 | 5.3 | 0.59 | 0.86 | 27.0 | |
Total Proven and Probable (Base Metal and Gold) | 15,303,000 | 3.8 | 3.31 | 0.61 | 27.8 | |
Base Metal Zone Resources | ||||||
Inferred – Lalor | 1,947,000 | 1.7 | 5.56 | 0.34 | 32.0 | |
Inferred – 1901 | 312,000 | 1.5 | 5.86 | 0.19 | 32.0 | |
Total Inferred - Base Metal | 2,259,000 | 1.7 | 5.60 | 0.32 | 32.0 | |
Gold Zone Resources | ||||||
Inferred – Lalor | 3,764,000 | 5.0 | 0.27 | 1.68 | 26.4 | |
Inferred – 1901 | 1,599,000 | 5.5 | 0.30 | 0.85 | 16.5 | |
Total Inferred - Gold | 5,363,000 | 5.1 | 0.28 | 1.43 | 23.5 | |
Total Inferred (Base Metal and Gold) | 7,622,000 | 4.1 | 1.86 | 1.10 | 26.0 |
Note: totals may not add up correctly due to rounding.
1 Mineral resources are exclusive of mineral reserves and do not have demonstrated economic viability.
2 Mineral resources do not include factors for mining recovery or dilution.
3 Base metal mineral resources are estimated based on the assumption that they would be processed at the Stall concentrator while gold mineral resources are estimated based on the assumption that they would be processed at the New Britannia concentrator.
4 Long-term metal prices of $1.20 per pound zinc, $1,650 per ounce gold, $3.60 per pound copper, and $22.00 per ounce silver with an exchange rate of 1.33 C$/US$ were used to estimate mineral reserves and resources.
5 Lalor mineral reserves and resources are estimated using NSR cut-off ranging from C$137 to C$168 per tonne assuming a long hole mining method and depending on the mill destination.
6 Individual stope gold grades at Lalor were capped at 10 grams per tonne as a prudent estimate until reserves-to-mill reconciliations can be developed to support the recovery of higher-grade gold. This capping method resulted in an approximate 3% reduction in the overall gold reserve grade at Lalor.
7 1901 mineral reserves and resources are estimated using a minimum NSR cut-off of C$166 per tonne assuming the material is mined via post pillar cut-and-fill methods and is processed at the Stall mill.
Snow Lake Regional Deposits - Gold Mineral Reserve and Resource Estimates 1 ,2,3, 4,5,6 ,7,8 | Tonnes | Au Grade (g/t) | Zn Grade (%) | Cu Grade (%) | Ag Grade (g/t) | |
Probable Reserves | ||||||
WIM | 2,450,000 | 1.6 | 0.25 | 1.63 | 6.3 | |
3 Zone | 660,000 | 4.2 | - | - | - | |
Total Probable (Gold) | 3,110,000 | 2.2 | 0.20 | 1.28 | 5.0 | |
Inferred Resources | ||||||
New Britannia | 2,750,000 | 4.5 | - | - | - | |
Birch | 570,000 | 4.4 | - | - | - | |
Total Inferred (Gold) | 3,320,000 | 4.5 | - | - | - |
Note: totals may not add up correctly due to rounding.
1 Mineral resources are exclusive of mineral reserves and do not have demonstrated economic viability.
2 Mineral resources do not include factors for mining recovery or dilution.
3 Gold mineral resources are estimated based on the assumption that they would be processed at the New Britannia concentrator.
4 Long-term metal prices of $1.15 per pound zinc, $1,500 per ounce gold, $3.45 per pound copper, and $20.00 per ounce silver with an exchange rate of 1.30 C$/US$ were used to confirm the economic viability of the mineral reserve estimates.
5 WIM mineral reserves are estimated using a minimum NSR cut-off of C$150 per tonne, assuming processing recoveries of 98% for copper, 88% for gold and 70% for silver based on processing through New Britannia mill's flotation and tails leach circuits.
6 3 Zone mineral reserves are estimated using a minimum NSR cut-off of C$150 per tonne, assuming processing recoveries of 85% for gold based on processing through New Britannia mill's leach circuit.
7 New Britannia mineral resource estimates have been reported at a minimum true width of 1.5 metres and with a cut-off grade varying from 2 grams per tonne (at the lower part of New Britannia) to 3.5 grams per tonne (at the upper part of New Britannia).
8 Mineral reserves and resources were initially estimated using metal price assumptions that vary marginally over the assumptions used to estimate mineral reserves at Lalor. In the Qualified Person's opinion, the combined impact of these small variations does not have any impact on the mineral reserve and resource estimates.
Snow Lake Regional Deposits – Base Metal Mineral Reserve and Resource Estimates 1 ,2,3,4,5,6,7 | Tonnes | Au Grade (g/t) | Zn Grade (%) | Cu Grade (%) | Ag Grade (g/t) | |
Indicated Resources | ||||||
Pen II | 470,000 | 0.3 | 8.89 | 0.49 | 6.8 | |
Talbot | 2,190,000 | 2.1 | 1.79 | 2.33 | 36.0 | |
Total Indicated (Base Metals) | 2,660,000 | 1.8 | 3.04 | 2.01 | 30.9 | |
Inferred Resources | ||||||
Watts | 3,150,000 | 1.0 | 2.58 | 2.34 | 31.0 | |
Pen II | 130,000 | 0.3 | 9.81 | 0.37 | 6.8 | |
Talbot | 2,450,000 | 1.9 | 1.74 | 1.13 | 25.8 | |
Total Inferred (Base Metals) | 5,730,000 | 1.3 | 2.39 | 1.78 | 28.3 |
Note: totals may not add up correctly due to rounding.
1 Mineral resources are exclusive of mineral reserves and do not have demonstrated economic viability.
2 Mineral resources do not include factors for mining recovery or dilution.
3 Base metal mineral resources are estimated based on the assumption that they would be processed at the Stall concentrator.
4 Watts mineral resources are estimated using a minimum NSR cut-off of C$150 per tonne, assuming processing recoveries of 90% for copper, 80% for zinc, 70% for gold and 70% for silver.
5 Pen II mineral resources are estimated using a minimum NSR cut-off of C$75 per tonne.
6 Watts and Pen II mineral resources were initially estimated using metal price assumptions that vary marginally over the assumptions used to estimate mineral resources at Lalor. In the Qualified Person's opinion, the combined impact of these small variations does not have any impact on the mineral resource estimates.
7 Includes 100% of the Talbot mineral resources reported by Rockcliff Metals Corp. in its 2020 NI 43-101 technical report published on SEDAR. Hudbay currently owns a 51% interest in the Talbot project.
Lalor Near-Mine Exploration
Hudbay commenced a winter drill program in January 2023 with four drill rigs testing the down-dip gold and copper extensions of the Lalor deposit, in the first step-out drilling in the deeper zones at Lalor since the initial discovery of the gold and copper-gold zones in 2009 and 2010. A total of eight widely spaced drill holes have been planned to test the down dip extension of Lalor over a two kilometre by one kilometre area during the 2023 winter drilling season, as shown in Figure 1. Four of these holes have been completed to-date and all holes have intersected the alteration zone that hosts the Lalor mineralization, with two holes intersecting copper bearing sulfides identified from core logging. These results confirm that the alteration zone hosting the mineralization mined at Lalor continues down dip for two kilometres from its existing known extent. Once the 2023 drilling program is completed, all holes will be assayed and probed to guide the next campaign of exploration.
One additional drill rig is testing a geophysical anomaly located within 400 metres of existing Lalor underground infrastructure. Four drill holes have been completed during the winter drill program and assay results from base metal and copper-gold mineralized intercepts identified from core logging are pending.
3-Year Production Outlook
The consolidated copper and gold production guidance demonstrates the continued growth from the company's brownfield investments in Peru and Manitoba. Consolidated copper production over the next three years is expected to increase to 114,000 i tonnes, 130,500 i tonnes and 116,000 i tonnes, respectively, which represents an increase of 9%, 25% and 11%, respectively, from 2022 levels. Consolidated gold production over the next three years is expected to increase to 285,500 i ounces, 296,500 i ounces and 258,500 i ounces, respectively, which represents an increase of 30%, 35% and 18%, respectively, from 2022 levels.
Peru's three-year production guidance reflects higher copper and gold grades from Pampacancha into the first half of 2025. The mine plan has been re-sequenced to reflect the impacts in early 2023, as noted previously, resulting in higher copper and gold production from Pampacancha continuing into 2025. This is expected to lead to an 18% i and 109% i increase in copper and gold production, respectively, in 2025 compared to the mine plan issued in 2021.
Manitoba's three-year production guidance reflects higher throughput at the Lalor mine and the New Britannia mill starting in 2023, as well as positive impacts from the first phase of the Stall mill recovery improvement program beginning in the second quarter of 2023. Gold production in 2025 also reflects preliminary expected impacts from the second phase of the Stall mill recovery improvement program.
3-Year Production Outlook Contained Metal in Concentrate and Doré 1 | 2023 Guidance | 2024 Guidance | 2025 Guidance | |
Peru | ||||
Copper | tonnes | 91,000 - 116,000 | 107,000 - 132,000 | 94,000 - 120,000 |
Gold | ounces | 83,000 - 108,000 | 96,000 - 117,000 | 53,000 - 64,000 |
Silver | ounces | 2,210,000 - 2,650,000 | 2,600,000 - 3,100,000 | 2,400,000 - 3,000,000 |
Molybdenum | tonnes | 1,300 - 1,600 | 1,600 - 1,900 | 1,400 - 1,700 |
Manitoba | ||||
Gold | ounces | 175,000 - 205,000 | 175,000 - 205,000 | 175,000 - 225,000 |
Zinc | tonnes | 28,000 - 36,000 | 35,000 - 43,000 | 35,000 - 45,000 |
Copper | tonnes | 9,000 - 12,000 | 9,000 - 13,000 | 7,000 - 11,000 |
Silver | ounces | 750,000 - 1,000,000 | 800,000 - 1,000,000 | 900,000 - 1,200,000 |
Total | ||||
Copper | tonnes | 100,000 - 128,000 | 116,000 - 145,000 | 101,000 - 131,000 |
Gold | ounces | 258,000 - 313,000 | 271,000 - 322,000 | 228,000 - 289,000 |
Zinc | tonnes | 28,000 - 36,000 | 35,000 - 43,000 | 35,000 - 45,000 |
Silver | ounces | 2,960,000 - 3,650,000 | 3,400,000 - 4,100,000 | 3,300,000 - 4,200,000 |
Molybdenum | tonnes | 1,300 - 1,600 | 1,600 - 1,900 | 1,400 - 1,700 |
1 Metal reported in concentrate and doré is prior to smelting and refining losses or deductions associated with smelter terms. |
Copper World Project
The 100% owned Copper World project is located in Pima County, Arizona, approximately 50 kilometres southeast of Tucson. The Copper World project includes seven deposits discovered in 2021, together with the East deposit (formerly known as the Rosemont deposit). The new deposits were defined after the completion of an expanded drill program following a successful initial drill program in 2020. A new resource model was completed for the Preliminary Economic Assessment ("PEA") of Copper World in 2022, which included a revised resource model for the East deposit that applied resource classification criteria calibrated on historical performance at Constancia and controlled grade over-smoothing and incorporated the newly discovered deposits. This resulted in a 17% increase in contained copper in measured and indicated resources and a 328% increase in contained copper in inferred resources, as compared to the mineral resources in the 2017 feasibility study for the East deposit.
The Copper World PEA contemplates a two-phased mine plan with the first phase reflecting a standalone operation with processing infrastructure on Hudbay's private land and mining occurring on patented mining claims. Phase I is expected to require only state and local permits and reflects a 16-year mine life. Phase II extends the mine life to 44 years through an expansion onto federal land to mine the entire deposits. Phase II also contemplates an expansion of the processing facilities and would be subject to the federal permitting process.
At a copper price of $3.50 per pound, the after-tax net present value of Phase I using a 10% discount rate is $741 million with an internal rate of return of 17%. With the inclusion of Phase II, the after-tax net present value of the total project using a 10% discount rate increases to $1,296 million and an internal rate of return of 18%. The valuation metrics are highly sensitive to the copper price and at a price of $4.00 per pound, the after-tax net present value of Phase I and the total project, using a 10% discount rate, increases to $1,193 million and $1,903 million, respectively, and the internal rate of return in Phase I and the total project increases to 21% and 22%, respectively. For information regarding the limitations of a PEA, please refer to the Qualified Person and NI 43-101 statement at the end of this news release.
Current mineral resource estimates for the Copper World project as of January 1, 2023 are summarized below.
Copper World Project Mineral Resource Estimates 1 ,2,3,4,5 | Tonnes | Cu Grade (%) | CuSS Grade (%) | Mo Grade (g/t) | Ag Grade (g/t) | |
Flotation Material | ||||||
Measured | 687,000,000 | 0.45 | 0.05 | 138 | 5.1 | |
Indicated | 287,000,000 | 0.36 | 0.06 | 134 | 3.6 | |
Inferred | 210,000,000 | 0.36 | 0.05 | 119 | 3.9 | |
Leach Material | ||||||
Measured | 105,000,000 | 0.37 | 0.26 | - | - | |
Indicated | 94,000,000 | 0.35 | 0.26 | - | - | |
Inferred | 52,000,000 | 0.40 | 0.29 | - | - | |
Total Resources | ||||||
Measured and Indicated | 1,173,000,000 | 0.41 | 0.09 | 114 | 3.9 | |
Inferred | 262,000,000 | 0.37 | 0.10 | 95 | 3.1 |
Note: totals may not add up correctly due to rounding.
1 CIM definitions were followed for the estimation of mineral resources. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
2 Mineral resources are constrained within a computer-generated pit using the Lerchs-Grossman algorithm.
3 Estimate of the mineral resource is based on the following metals prices: $3.45 per pound of copper; $11.00 per pound of molybdenum; and $20.00 per ounce of silver.
4 Mineral resource estimates were reported using a 0.1% copper cut-off grade and an oxidation ratio lower than 50% for flotation material and a 0.1% soluble copper cut-off grade and an oxidation ratio higher than 50% for leach material.
5 Estimate of the mineral resource does not account for marginal amounts of historical small-scale operations in the area that occurred between 1870 and 1970 and is estimated to have extracted approximately 200,000 tonnes, which is within rounding approximations of the current resource estimates.
Focused on De-risking Activities at Copper World
Following the release of the Copper World PEA, Hudbay has continued to execute its strategy to de-risk the project. Pre-feasibility activities for the private land Phase I of the Copper World project are well-advanced and are expected to support the conversion of mineral resources to mineral reserves and optimize the layout and sequencing of the mineral processing facilities, in addition to evaluating other upside opportunities. Pre-feasibility level engineering of the main processing facility, together with geotechnical and hydrogeological site investigation activities, were completed by the end of 2022. In late 2022, Hudbay submitted the applications for an Aquifer Protection Permit and an Air Quality Permit to the Arizona Department of Environmental Quality. Hudbay continues to expect to receive these two remaining state permits in 2023. The other key state permit, the Mined Land Reclamation Plan, was received in 2022. A pre-feasibility study for Phase I of the Copper World project is expected to be released in mid-2023.
Upon receipt of the state level permits, the company expects to conduct a bulk sampling program at Copper World to continue to de-risk the project by testing grade continuity, variable cut-off effectiveness and metallurgical strategies. Hudbay also intends to initiate a minority joint venture partner process following receipt of permits, which will allow the potential joint venture partner to participate in the design and funding of definitive feasibility study activities in 2024.
Mason Project
The Mason project is a large greenfield copper deposit located in the historic Yerington District of Nevada and is one of the largest undeveloped copper porphyry deposits in North America. The Mason project's measured and indicated mineral resources are comparable in size to Constancia. Hudbay views the Mason project as a long-term future development asset as part of the company's pipeline of high-quality copper growth opportunities. Since acquiring Mason, Hudbay has consolidated a prospective package of patented and unpatented mining claims contiguous to the Mason project and has advanced a number of technical studies, including a revised resource model and the completion of a PEA on Mason.
The Mason PEA was completed in April 2021 and contemplates a 27-year mine life with average annual copper production of approximately 140,000 tonnes over the first ten years of full production. At a copper price of $3.50 per pound, the after-tax net present value using a 10% discount rate is $1,191 million and the internal rate of return is 18%. For information regarding the limitations of a PEA, please refer to the Qualified Person and NI 43-101 statement at the end of this news release.
There is opportunity to further enhance the project economics through exploration for higher grade satellite deposits on Hudbay's prospective land package in Nevada, including Mason Valley. The Mason Valley property hosts several historical underground copper mines that were in production in the early 1900s. Much of the Mason Valley property is located on Hudbay's wholly owned private lands within 15 kilometres of the planned processing infrastructure for the Mason project and contains highly prospective skarn mineralization. A conductivity-resistivity IP ground survey conducted in the fourth quarter of 2022 was successful in identifying the mineralization associated with the historical mines and confirmed the potential for both high-grade skarn targets as well as a large porphyry target below the historical mines. These results, 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 these targets in late 2023.
Current mineral resource estimates for Mason as of January 1, 2023 are summarized below.
Mason Project Mineral Resource Estimates 1 ,2,3,4,5 | Tonnes | Cu Grade (%) | Mo Grade (g/t) | Au Grade (g/t) | Ag Grade (g/t) | |
Measured | 1,417,000,000 | 0.29 | 59 | 0.031 | 0.66 | |
Indicated | 801,000,000 | 0.30 | 80 | 0.025 | 0.57 | |
Total Measured and Indicated | 2,219,000,000 | 0.29 | 67 | 0.029 | 0.63 | |
Inferred | 237,000,000 | 0.24 | 78 | 0.033 | 0.73 |
Note: totals may not add up correctly due to rounding.
1 Mineral resource estimates that are not mineral reserves do not have demonstrated economic viability.
2 Mineral resource estimates do not include factors for mining recovery or dilution.
3 Metal prices of $3.10 per pound copper, $11.00 per pound molybdenum, $1,500 per ounce gold, and $18.00 per ounce silver were used to estimate mineral resources.
4 Mineral resources are estimated using a minimum NSR cut-off of $6.25 per tonne.
5 Mineral resources are based on resource pit designs containing measured, indicated, and inferred mineral resources.
Llaguen Project
The Llaguen project is a copper-molybdenum porphyry deposit located near the city of Trujillo, the third largest city in Peru. Llaguen is at moderate altitude and in close proximity to existing infrastructure, including water supply, the Trujillo Nueva electric power substation (located 40 kilometres away) and the port of Salaverry (located 62 kilometres away). Hudbay completed a 28-hole confirmatory drill program in 2021 and 2022 which confirmed and extended the footprint of the known mineralization and highlighted the existence of a high-grade zone in the center of the deposit.
After completing an initial mineral resource estimate in November 2022, Hudbay initiated preliminary technical studies, including metallurgical test work as well as geotechnical and hydrogeological studies, which are expected to be incorporated into a preliminary economic assessment for the Llaguen project. Additional exploration drilling is warranted on the Llaguen property to test the areas of the deposit that remain open and the several untested geophysical targets in the area to fully define the regional extent of the mineralization. The current mineral resource is also surrounded by a large halo of low grade hypogene copper mineralization, not currently included in the mineral resource estimate, but for which metallurgical test work could assess the potential for economic sulfide heap leaching via commercially available technologies.
Current mineral resource estimates for Llaguen as of January 1, 2023 are summarized below.
Llaguen Mineral Resource Estimates 1 ,2,3,4,5,6 | Metric Tonnes | Cu (%) | Mo (g/t) | Au (g/t) | Ag (g/t) | CuEq (%) |
Indicated Global (>= 0.14% Cu) | 271,000,000 | 0.33 | 218 | 0.033 | 2.04 | 0.42 |
Including Indicated High-grade (>= 0.30% Cu) | 113,000,000 | 0.49 | 261 | 0.046 | 2.73 | 0.60 |
Inferred Global (>= 0.14% Cu) | 83,000,000 | 0.24 | 127 | 0.024 | 1.47 | 0.30 |
Including Inferred High-grade (>= 0.30% Cu) | 16,000,000 | 0.45 | 141 | 0.038 | 2.60 | 0.52 |
1 CIM definitions were followed for the estimation of mineral resources. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
2 Mineral resources are reported within an economic envelope defined by a pit shell optimization algorithm. This pit shell is defined by a revenue factor of 0.33 assuming operating costs adjusted from Hudbay's Constancia open pit operation.
3 Long-term metal prices of $3.60 per pound copper, $11.00 per pound molybdenum, $1,650 per ounce gold and $22.00 per ounce silver were used for the estimation of mineral resources.
4 Metal recovery estimates assume that this mineralization would be processed at a combination of facilities, including copper and molybdenum flotation.
5 Copper-equivalent ("CuEq") grade is calculated assuming 85% copper recovery, 80% molybdenum recovery, 60% gold recovery and 60% silver recovery.
6 Specific gravity measurements were estimated by industry standard laboratory measurements.
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, Senior Vice President, Exploration and Technical Services. Mr. Tavchandjian is a qualified person pursuant to NI 43‑101 (as defined below). Additional details on the company's material mineral projects, including a year-over-year reconciliation of reserves and resources, is included in Hudbay's Annual Information Form for the year ended December 31, 2022 (the "AIF"), which is available on SEDAR at www.sedar.com .
The Copper World PEA and the Mason PEA are preliminary in nature, include inferred resources that are considered too speculative 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 assessments will be realized.
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 differ from the requirements of United States securities laws. Canadian reporting requirements for disclosure of mineral properties are governed by the Canadian Securities Administrators' National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101").
For this reason, information contained in this news release containing descriptions of the company's mineral deposits may not be comparable to similar information made public by United States companies subject to the reporting and disclosure requirements under the United States federal securities laws and the rules and regulations thereunder. For further information on the differences between the disclosure requirements for mineral properties under the United States federal securities laws and NI 43-101, please refer to the company's AIF, a copy of which has been filed under Hudbay's profile on SEDAR at www.sedar.com and the company's Form 40-F, a copy of which will be filed under Hudbay's profile on EDGAR at www.edgar.com.
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, statements regarding the company's production, cost and capital and exploration expenditure guidance, expectations regarding the company's exploration program and anticipated results therefrom, expectations regarding the impact of inflationary pressures on the company's cost of operations, financial condition and prospects, expectations regarding the Copper World project, including with respect to the company's plans for a pre-feasibility study and the estimated timelines and pre-requisites for sanctioning the project, expectations regarding the permitting requirements for the Copper World project and permitting related litigation, the company's ability to continue to increase production at Lalor and throughput at the New Britannia mill, the anticipated timing and benefits of completing the Stall recovery improvement program, the anticipated timing for reaching normal concentrate inventory levels at port in Peru, expectations regarding the ability to conduct exploration work on the Maria Reyna and Caballito properties and to advance related drill plans and to submit related drill permit applications, expectations regarding the duration and potential impact of short-term mine plan changes implemented at Constancia, expectations regarding the ability for the company to reduce greenhouse gas emissions, expectations regarding the prospective nature of the Maria Reyna and Caballito properties, the anticipated impact of brownfield growth projects on the company's performance, anticipated expansion opportunities in Snow Lake, anticipated drill programs, 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 the company 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 were applied in drawing conclusions or making forecasts or projections set out in the forward-looking information include, but are not limited to:
- the ability to achieve production and cost guidance;
- the ability to achieve discretionary spending reductions without impacting operations;
- no significant interruptions to operations due to social or political unrest in the regions Hudbay operates, including the navigation of the complex environment in Peru;
- no interruptions to the company's plans for advancing the Copper World project;
- the ability to ramp up exploration in respect of the Maria Reyna and Caballito properties and to advance related drill plans and to submit related drill permit applications;
- the ability to continue to increase production at Lalor;
- the ability to reach normal concentrate inventory levels at port in Peru;
- the success of mining, processing, exploration and development activities;
- the scheduled maintenance and availability of the company's processing facilities;
- the accuracy of geological, mining and metallurgical estimates;
- anticipated metals prices and the costs of production;
- the supply and demand for metals the company produces;
- the supply and availability of all forms of energy and fuels at reasonable prices;
- no significant unanticipated operational or technical difficulties;
- the execution of the company's business and growth strategies, including the success of its strategic investments and initiatives;
- the availability of additional financing;
- the ability to complete projects on time and on budget and other events that may affect the company's ability to develop its projects;
- the timing and receipt of various regulatory and governmental approvals;
- the availability of personnel for the company's exploration, development and operational projects and ongoing employee relations;
- maintaining good relations with the labour unions that represent certain of the company's employees in Manitoba and Peru;
- maintaining good relations with the communities in which the company operates, including the neighbouring Indigenous communities and local governments;
- no significant unanticipated challenges with stakeholders at the company's various projects;
- no significant unanticipated events or changes relating to regulatory, environmental, health and safety matters;
- no contests over title to the company's properties, including as a result of rights or claimed rights of Indigenous peoples or challenges to the validity of the company's unpatented mining claims;
- the timing and possible outcome of pending litigation and no significant unanticipated litigation;
- certain tax matters, including, but not limited to current tax laws and regulations, changes in taxation policies and the refund of certain value added taxes from the Canadian and Peruvian governments; and
- no significant and continuing adverse changes in general economic conditions or conditions in the financial markets (including commodity prices and foreign exchange rates).
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, political and social risks in the regions Hudbay operates, including the 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 Copper World project, including in relation to permitting, litigation, project delivery and financing risks, risks related to the Lalor mine plan, including the ability to increase the rate of production, 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 the company's reserves, volatile financial markets and interest rates that may affect the company's 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 company's 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 the company's most recent Annual Information Form and under the heading "Financial Risk Management" in the company's management's discussion and analysis for the year ended December 31, 2022.
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.
About Hudbay
Hudbay (TSX, NYSE: HBM) is a diversified mining company with long-life assets in North and South America. The company's Constancia operations in Cusco (Peru) produce copper with gold, silver and molybdenum by-products. Its Snow Lake operations in Manitoba (Canada) produce gold with copper, zinc and silver by-products. Hudbay has an organic pipeline that includes the Copper World project in Arizona and the Mason project in 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 investor and media inquiries, please contact:
Candace Brûlé
Vice President, Investor Relations
(416) 814-4387
candace.brule@hudbay.com
Figure 1: Lalor Deep 2023 Winter Drilling
Surface drilling to test the deeper extensions of the Lalor deposit was initiated in January 2023. Widely spaced drill holes are exploring a large footprint of approximately two kilometres by one kilometre down dip of Lalor.
A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/8429cd35-8aec-46e4-ae89-f4318d6c811c
_____________________
i Calculated using the mid-point of the guidance range.
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First Quantum Minerals and Rio Tinto Form Partnership to Progress the La Granja Copper Project in Peru
(In United States dollars, except where noted otherwise)
First Quantum Minerals Ltd. ("First Quantum" or "the Company") (TSX: FM) is pleased to announce that it has entered into an agreement with Rio Tinto to progress the next phase of the La Granja copper project (the "Project") in Peru.
The Project is located in the district of Querocoto in the northern region of Cajamarca, Peru, approximately 90 kilometers northeast of Chiclayo, the capital of Lambayeque region, at an altitude of between 2,000 and 2,800 meters. La Granja is one of the largest undeveloped copper resources in the world with a published Inferred mineral resource of 4.32 billion tonnes at 0.51 percent copper and potential for substantial expansion. Rio Tinto has operated the Project since 2006, carrying out an extensive drilling program that has significantly expanded the resource and has managed a world-class community relations program that has ensured strong local support for the Project. First Quantum will acquire a majority stake in the Project and will undertake the feasibility study and possible further development of what has the potential to be a large, long-life operation.
"I am very pleased to announce today's partnership with Rio Tinto, a global leader in the mining industry. Rio Tinto's work on La Granja has been extensive to date and we share our partner's view that the Project has the potential to be a Tier 1 copper mine. We look forward to working together to build on this foundation, leveraging First Quantum's core strengths in mine design, project development and community engagement. This partnership will provide First Quantum access to an attractive copper project, offering additional future optionality in the Company's project pipeline while we focus on strengthening the balance sheet in the interim," said Tristan Pascall, Chief Executive Officer of First Quantum. "First Quantum is excited about broadening our existing relationships in Peru and we are appreciative of the support provided by the Government of Peru to this important partnership for its future investment in the country."
"La Granja is an exciting but complex project that has the potential to be a significant new source of the copper that is needed for the energy transition. We are pleased to enter into this agreement with First Quantum, that will bring our combined development capabilities and deep knowledge of La Granja to progress the Project," said Bold Baatar, Chief Executive of Rio Tinto Copper. "This partnership underscores not only La Granja's potential to be a significant copper producer, but Peru's position as one of the world's most important mining investment destinations."
KEY TERMS OF THE AGREEMENT
Upon completion, First Quantum will acquire a 55% interest in La Granja for a consideration of $105 million and will become the operator of the Project. Following the acquisition, the Company will be responsible for $546 million of funding (the "initial funding"). Part of the initial funding will be used to complete a feasibility study after which the remaining majority of the initial funding is expected to be spent on construction of the Project following a positive investment decision. Upon satisfaction of this initial funding amount, all subsequent expenditures will be applied on a pro-rata basis according to the share ownership of the Project.
The completion of the transaction is subject to certain conditions, including regulatory approvals by the Government of Peru that are currently underway. The transaction is expected to close before the end of Q3 2023.
WORK PLAN AND GUIDANCE
Work over the initial years will continue to progress community engagement and the feasibility study. The feasibility study will focus on developing an updated geological resource and reserve model, which will require additional infill drilling to upgrade Inferred resources to Measured and Indicated categories. Additional metallurgical studies to establish optimal processing configurations are expected to be carried out in parallel, together with a high-level project layout and configuration of associated infrastructure requirements and logistical routes.
With work on La Granja focused mainly at the studies level, there is no change to the Company's three-year guidance provided in January 2023 on capital expenditures.
Further to the agreement on La Granja, First Quantum and Rio Tinto have also entered into a memorandum of understanding to support co-operation in relation to base metals development opportunities and the sharing of technology and know-how on certain mining methods, such as the application of trolley-assist and autonomous mining fleets.
For further information, visit our website at www.first-quantum.com or contact:
Bonita To, Director, Investor Relations
(416) 361-6400 Toll-free: 1 (888) 688-6577
E-Mail: info@fqml.com
CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION
Certain statements and information herein, including all statements that are not historical facts, contain forward-looking statements and forward-looking information within the meaning of applicable securities laws. The forward-looking statements in this news release include statements regarding the expected timing for closing of the transaction; the satisfaction of closing conditions in respect of the Acquisition, including regulatory approvals; the work, including feasibility and metallurgical studies, to be completed to progress the Project; the funding of expenditures related to the Project; the impact and expected benefits of the Acquisition and the Company's partnership with Rio Tinto on the Company's business and operations; and expectations regarding the future demand for copper. With respect to forward-looking statements and information contained herein, the Company has made numerous assumptions, including as to the receipt of necessary regulatory approvals required to complete Acquisition; Rio Tinto and the Company maintaining strong local support for the Project; the successful completion of the feasibility and metallurgical studies required to progress the Project; and the ability of the Company to fund the Acquisition, including the first $546 million in study and development work and subsequent expenditures related to the Project. Forward-looking statements and information by their nature are based on assumptions and involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or information. These factors include, but are not limited to, political stability in Peru, joint venture risks, potential social and environmental challenges, and events generally impacting global economic, political and social stability. There may also be other factors that cause actual results, performance, achievements or events not as anticipated, estimated or intended, including the risks, uncertainties and other factors discussed in the Company's Annual Information Form. The Company undertakes no obligation to reissue or update forward-looking statements or information as a result of new information or events after the date hereof except as may be required by law.
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Trilogy Metals Announces Date of the Annual Shareholders Meeting
Trilogy Metals Inc. (TSX: TMQ) (NYSE American: TMQ) ("Trilogy Metals" or "the Company") will hold the Company's 2023 Annual General Meeting of the Shareholders ("AGM") on Wednesday, May 17, 2023 at 10:00 am Pacific Time at the office of the Company, Suite 1150, 609 Granville Street, Vancouver, British Columbia .
All current directors will stand for re-election at the AGM with the exception of Mr. Kalidas Madhavpeddi, a director of the Company since it went public in 2012. Mr. Madhavpeddi is Chairman of Glencore Plc and has more than 40 years of international experience in corporate strategy, mergers and acquisitions, government relations, marketing, mining engineering and capital. The Board of Directors and Management of the Company would like to thank Mr. Madhavpeddi for his valuable contributions to Trilogy Metals and wish him success in his future endeavors.
Shareholders as of the record date of March 28, 2023 ("Record Date") will be eligible to vote at the AGM. The Company's 2023 Management Information Circular (also called a proxy statement), which contains information about all director nominees and other items of business was filed today and is now available to the public. As always, we encourage you to vote your shares prior to the AGM.
No presentations or updates on the Company's activities will be provided at the AGM. The Company's most recent investor presentation can be found on our website at www.trilogymetals.com . Any investor who would like further information on the items of business at the AGM or the Company's activities is welcome to contact us directly.
Proxy Statement Filed with Regulators
Additional information about the AGM can be found in the Company's 2023 Management Information Circular (or proxy statement), which has been filed with the U.S. Securities and Exchange Commission (SEC") and the Canadian securities regulatory authorities. The Management Information Circular is available on the Company's website at https://trilogymetals.com/investors/proxy-circular and on the Company's profile on SEDAR at www.sedar.com and on EDGAR at www.sec.gov .
The Company, its directors and certain of its executive officers are participants in the solicitation of proxies from the Company's shareholders in connection with the Company's 2023 AGM. The Company has filed its Management Information Circular with the SEC and Canadian securities regulatory authorities in connection with any such solicitation of proxies from the Company's shareholders. SHAREHOLDERS OF THE COMPANY ARE STRONGLY ENCOURAGED TO READ SUCH PROXY STATEMENT AND ALL OTHER DOCUMENTS FILED WITH THE SEC AND CANADIAN SECURITIES REGULATORY AUTHORITIES CAREFULLY AND IN THEIR ENTIRETY AS THEY WILL CONTAIN IMPORTANT INFORMATION.
This press release includes certain "forward-looking information" and "forward-looking statements" (collectively "forward-looking statements") within the meaning of applicable Canadian and United States securities legislation including the United States Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact, included herein, including, without limitation, the date and time of the AGM, items of business at the AGM and the Company's plans to provide further updates and the timing thereof are forward-looking statements. Forward-looking statements are frequently, but not always, identified by words such as "expects", "anticipates", "believes", "intends", "estimates", "potential", "possible", and similar expressions, or statements that events, conditions, or results "will", "may", "could", or "should" occur or be achieved. Forward-looking statements involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company's expectations include the uncertainties involving our assumptions with respect to the impact of the novel coronavirus (COVID-19) and other risks and uncertainties disclosed in the Company's Annual Report on Form 10-K for the year ended November 30, 2022 filed with Canadian securities regulatory authorities and with the United States Securities and Exchange Commission and in other Company reports and documents filed with applicable securities regulatory authorities from time to time. The Company's forward-looking statements reflect the beliefs, opinions and projections on the date the statements are made. The Company assumes no obligation to update the forward-looking statements or beliefs, opinions, projections, or other factors, should they change, except as required by law.
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SOURCE Trilogy Metals Inc.

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Trilogy Metals Announces Date of the Annual Shareholders Meeting
Trilogy Metals Inc. (TSX: TMQ) (NYSE American: TMQ) ("Trilogy Metals" or "the Company") will hold the Company's 2023 Annual General Meeting of the Shareholders ("AGM") on Wednesday, May 17, 2023 at 10:00 am Pacific Time at the office of the Company, Suite 1150, 609 Granville Street, Vancouver, British Columbia .
All current directors will stand for re-election at the AGM with the exception of Mr. Kalidas Madhavpeddi, a director of the Company since it went public in 2012. Mr. Madhavpeddi is Chairman of Glencore Plc and has more than 40 years of international experience in corporate strategy, mergers and acquisitions, government relations, marketing, mining engineering and capital. The Board of Directors and Management of the Company would like to thank Mr. Madhavpeddi for his valuable contributions to Trilogy Metals and wish him success in his future endeavors.
Shareholders as of the record date of March 28, 2023 ("Record Date") will be eligible to vote at the AGM. The Company's 2023 Management Information Circular (also called a proxy statement), which contains information about all director nominees and other items of business was filed today and is now available to the public. As always, we encourage you to vote your shares prior to the AGM.
No presentations or updates on the Company's activities will be provided at the AGM. The Company's most recent investor presentation can be found on our website at www.trilogymetals.com . Any investor who would like further information on the items of business at the AGM or the Company's activities is welcome to contact us directly.
Proxy Statement Filed with Regulators
Additional information about the AGM can be found in the Company's 2023 Management Information Circular (or proxy statement), which has been filed with the U.S. Securities and Exchange Commission (SEC") and the Canadian securities regulatory authorities. The Management Information Circular is available on the Company's website at https://trilogymetals.com/investors/proxy-circular and on the Company's profile on SEDAR at www.sedar.com and on EDGAR at www.sec.gov .
The Company, its directors and certain of its executive officers are participants in the solicitation of proxies from the Company's shareholders in connection with the Company's 2023 AGM. The Company has filed its Management Information Circular with the SEC and Canadian securities regulatory authorities in connection with any such solicitation of proxies from the Company's shareholders. SHAREHOLDERS OF THE COMPANY ARE STRONGLY ENCOURAGED TO READ SUCH PROXY STATEMENT AND ALL OTHER DOCUMENTS FILED WITH THE SEC AND CANADIAN SECURITIES REGULATORY AUTHORITIES CAREFULLY AND IN THEIR ENTIRETY AS THEY WILL CONTAIN IMPORTANT INFORMATION.
This press release includes certain "forward-looking information" and "forward-looking statements" (collectively "forward-looking statements") within the meaning of applicable Canadian and United States securities legislation including the United States Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact, included herein, including, without limitation, the date and time of the AGM, items of business at the AGM and the Company's plans to provide further updates and the timing thereof are forward-looking statements. Forward-looking statements are frequently, but not always, identified by words such as "expects", "anticipates", "believes", "intends", "estimates", "potential", "possible", and similar expressions, or statements that events, conditions, or results "will", "may", "could", or "should" occur or be achieved. Forward-looking statements involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company's expectations include the uncertainties involving our assumptions with respect to the impact of the novel coronavirus (COVID-19) and other risks and uncertainties disclosed in the Company's Annual Report on Form 10-K for the year ended November 30, 2022 filed with Canadian securities regulatory authorities and with the United States Securities and Exchange Commission and in other Company reports and documents filed with applicable securities regulatory authorities from time to time. The Company's forward-looking statements reflect the beliefs, opinions and projections on the date the statements are made. The Company assumes no obligation to update the forward-looking statements or beliefs, opinions, projections, or other factors, should they change, except as required by law.
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SOURCE Trilogy Metals Inc.

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Annual Report Year Ending 31 December 2022
Alvo Minerals Limited (ASX: ALV) (“Alvo” or the “Company”) is pleased to present its investor presentation.
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This article includes content from Alvo Minerals, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
Drilling And Exploration Set To Commence At The Storm Copper Project, Canada
American West Metals Limited (“American West” or the “Company”) (ASX: AW1 | OTCQB: AWMLF) is please to announce that drilling and geophysical activities are set to commence at the beginning of April at the Storm Copper Project (Storm or the Project) on Somerset Island, Nunavut.
- Up to 10,000m of RC and Diamond drilling planned for 2023 field season
- Reverse Circulation (RC) drilling of near surface high-grade copper targets is scheduled to commence shortly at the 4100N Zone focused on resource definition
- Historical drilling at the 4100N Zone has intersected large volumes of high-grade copper including:
- 15m @ 3.88% Cu from 72.4m (ST99-47)
- 27.2 @ 1.9% Cu from 78.8m (ST00-62)
- 5.8m @ 3.6% Cu from 38.6m (ST99-53)
- Resource drilling at the 2750N and 2200N Zones will follow the 4100N program and is designed to target extensive, previously identified high-grade copper mineralisation
- Moving Loop Electromagnetics (MLEM) will be completed to assist targeting for the resource definition and identify new targets
- Diamond drilling and ground gravity survey planned to follow-up the major 2022 discovery of stratabound sedimentary copper sulphides at depth
Exploration will also commence to follow-up a major sedimentary copper system within the Storm Project area that was identified over the course of the 2022 field season. This program will consist of ground gravity, electromagnetics and diamond drilling.
Approximately 10,000m of drilling is planned for 2023.
Dave O'Neil, Managing Director of American West Metals commented:
"We are pleased to report that the mobilisation of the RC drill rig and geophysical equipment is well advanced at the Storm Copper Project in Nunavut, Canada. It's a busy time on site and the exploration and drilling activities are scheduled to begin at the start of April.
The initial phase of drilling is designed to define the maiden JORC resources within the 4100N, 2750N and 2200N Zones, where high-grade copper mineralisation starts from surface. We believe that significant copper resources exist within these zones with excellent potential to support a low-cost, open pit style mining operation.
The initial drilling will use an RC rig, which is the first of its type to be used at the Storm Project. The RC rig will allow us to cover ground more quickly, and surface geophysics will be used to refine our drill targeting. The geophysics will then roll out into new prospective areas.
Exploration will also follow-up the breakthrough 2022 discovery of stratabound, sedimentary copper mineralisation below the known copper prospects.
The 2022 drilling program indicated that we may have hit the margin of a large sedimentary copper system, and we will use ground gravity and EM to help define the core of the mineralisation. Further, diamond drilling will be used to test these deeper targets.
We look forward to reporting on the results of the drilling and exploration as activity progresses."
Figure 1: Drilling during 2022 at the 2750N Zone, Storm Copper Project. The upcoming drilling will build on the outstanding 2022 results and aim to define maiden copper resources at Storm.
RESOURCE DEFINITION AND EXPANSION
The footprint of near surface, high-grade copper mineralisation at Storm has been defined over and area of 40 heactares, with an average thickness of mineralisation of 24m @ 2.15% Cu (weighted average grade from 32 drill holes). Four main zones of mineralisation have been identified to date (Figure 2 & 3).
Drilling during 2022 has highlighted the continuity of the copper zones, and the near-surface mineralisation remains a focus for resource drilling due to its high grades, shallow nature and potential to provide a significant resource base as the basis for an initial low-cost, open-pit operation.
The areas of immediate interest are the 2750N, 2200N and 4100N Zones. Over the 30 drill holes are initially planned, will hole depths between 50-150m due to the shallow nature of mineralisation.
Moving loop electromagnetics (MLEM) will be used follow-up 11 shallow, high-priority EM conductors that were identified by the fixed loop electromagnetic (FLEM) survey completed by the Company during the 2021 field season. Some of these anomalies are coincident with outcropping high-grade copper occurrences and remain untested.
It is anticipated that EM will outline the zones with stronger, more massive mineralisation to assist in prioritising the resource definition drilling.
Figure 2: Plan view of the 4100N Zone showing copper mineralisation footprint defined by drilling and EM anomalies, overlaying regional geology.
Figure 3: Plan view of the 2750N and 2200N Zones showing copper mineralisation footprint defined by drilling and EM anomalies, overlaying regional geology.
EXPLORING THE EMERGING SEDIMENTARY COPPER SYSTEM
The recent discovery in drill hole ST22-10 (See ASX announcement, 28 September 2022: New copper system confirmed at the Storm Project, Canada) suggests that known near-surface copper prospects at Storm may be related to a large, sediment hosted style copper system at depth.
Click here for the full ASX Release
This article includes content from American West Metals Limited, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
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