HudBay Minerals has budgeted $116 million for pre-construction spending in 2011 at its open-pit Constancia porphyry copper project in Peru’s southern highlands. HudBay acquired the project in the first quarter of 2011 when it acquired Norsemont Mining (E&MJ, January–February 2011, p. 14). The company’s 2011 program for Constancia contemplates early equipment procurement for long lead items such as grinding mills and the mining fleet, a resource model update, a metallurgy review and pit optimization study, geotechnical and condemnation drilling, and a $9-million exploration program.
Preliminary equipment procurement accounts for about $46 million of the budgeted 2011 Constancia spending total. HudBay currently expects construction at the project to begin in early 2012, leading toward a first full year of production by 2016.
The Constancia pre-construction program is based on the timeline of Norsemont’s feasibility study optimization released in February 2011. The study is based on proven and probable reserves totaling 372 million mt, grading 0.39% copper, 0.0105% molybdenum, 0.05 g/mt gold, and 3.57 g/mt silver. Constancia’s mineral reserve estimate comprises 75 million mt of supergene ore, 248 million mt of hypogene ore, and a small amount of skarn mineralization. The reserves are sufficient to support a 15-year mine life, with good potential for mine-life extension through exploration.
Production is estimated at 180 million lb/y of payable copper at total cash costs of $0.93/lb, net of byproduct credits. Con-
centrator throughput will range up to 76,000 mt/d, depending on the ore type being processed. Total development capital cost is estimated at $920 million, and sustaining capital over the mine life is expected to be $240 million.
Exploration at Constancia during 2011 will continue to focus on Pampacancha and Chilloroya South, two satellite skarn deposits outside of the main resource area. Drilling at these deposits is intended to define high-grade, near-surface resources that may provide mine life optimization opportunities. As of late March 2011, results were being compiled, and drill results from Pampacancha were expected to be released in late April 2011. HudBay anticipates a preliminary resource for both areas will be completed in the third quarter of 2011.
HudBay will have two to four drills active at Constancia during the remainder of 2011 to explore and define known mineralization and to step out to test the extensions of known zones, as well as to conduct condemnation and geotechnical drilling.