HudBay boosts Flin Flon presence

Vancouver — The exploration arm of HudBay Minerals (HBM-V) has increased its property holdings and exploration budget in the Flin Flon greenstone belt of northern Manitoba.

The Winnipeg-based mining company recently acquired two new licences southeast of Snow Lake, Man., boosting its exploration holdings by about 940 sq. km to a total of about 2,960 sq. km. The company also announced plans to spend at least $10 million exploring the land package this year and into 2007.

Peter Jones, president and CEO, says the new acquisitions give the company “security” around mineral deposit targets and several geophysical targets in the area.

HudBay produces copper, zinc, and precious metals from mines and processing plants in Manitoba and Saskatchewan that the company acquired as part of a $316-million purchase of Hudson Bay Mining and Smelting (HBMS) from Anglo American (AAUK-Q) in late 2004. HBMS was a low-profile company that was at times publicly criticized for failing to modernize or invest in its operations and related assets in the Flin Flon camp.

HudBay Minerals has done more than just boost its land position and exploration presence in the Flin Flon district. The company’s operations benefited from a $435-million capital spending program that brought two new mines into production while also expanding and modernizing the metallurgical plants.

HudBay also posted strong financial and operating results for 2005, its first full year as a publicly traded company. Zinc production increased by 4,500 tonnes to 115,000 tonnes, while copper production climbed 9,000 tonnes to 86,000 tonnes. Gold production was up 23,000 oz. to 102,000 oz., with silver production up 296,000 oz. to 1.4 million oz.

Cash costs averaged 13 per lb. zinc before adjustments (or 23 after adjustments), net of byproduct credits.

The company posted record net earnings of $85.2 million, or $1.04 per share, on revenue of $652 million, for 2005. This compares with a loss of $9.9 million on sales of $13.3 million a year earlier.

HudBay reduced its net debt to $66.7 million during the year, and closed the purchase of the White Pine copper refinery in Michigan for US$13 million. In addition to the integrated mining and processing complex in Manitoba and Saskatchewan, HudBay owns a zinc oxide production plant in Brampton, Ont., and is about to reopen the Balmat zinc mine in New York state.