HudBay Mnrls Announces Capital Investment Budget of C$391M

HudBay Minerals

today released its production guidance and its exploration and capital expenditure budgets for 2012. "Throughout our operating history in the Flin Flon Greenstone Belt, we have seen a strong correlation between exploration dollars spent and mineral discoveries, which is why we have committed $54 million, in the belief that we can replicate this success across the Americas," said David Garofalo, president and chief executive officer. "We have also committed to $296 million in capital expenditures to grow our production profile, including the commencement of development of the Reed copper project, the ongoing construction at Lalor and continued procurement and engineering activities at Constancia, where we expect to make a full project decision in the first quarter of 2012." Production Decision Made at Reed Copper Project Today, HudBay's Board of Directors approved a capital investment of $71 million towards the construction of the 70% owned Reed copper project. A summary of the project's economics follows (100% basis): -- Approximate daily ore production of 1,300 tonnes per day at Reed is expected by late 2013, subject to receipt of required permits. -- Average production grades are expected to be 3.78% copper, 0.45 g/t gold and 5.77 g/t silver. Assumed metal recoveries in the Flin Flon concentrator are 94% copper, 58% gold and 62% silver. -- Average production in concentrate is expected to be approximately 17,000 tonnes per year of contained copper metal. -- Total operating costs are estimated to average approximately $91 per tonne milled ($67 per tonne mining, $16 per tonne milling and $8 per tonne administration) over the five year mine life. -- Sustaining capital expenditures are expected to total approximately $55 million over the five year mine life.