Hudbay has confirmed plans to shut down 777 mine and the Flin Flon mill, zinc plant and oxygen plant in April 2022. They will also be ending exploration spending around Flin Flon this year.
In a business update published Jan. 6 by Hudbay Manitoba Business Unit vice-president Rob Assabgui, the company confirmed that most Flin Flon operations will either be closed outright or placed on care and maintenance in 2022.
The last publicly released closure date for 777 and Flin Flon operations stated a shutdown would take place in the second quarter of 2022 and the company would explore other options to keep the zinc plant facility open.
Assabgui and the company cited lower zinc and copper prices as a contributing reason for moving up the date.
The development program for Hudbay’s highly touted 1901 project near Snow Lake has been deferred. In a business update for employees in October, Assabgui said the company could possibly extend the life of the zinc plant until 2025 if the 1901 deposit was fast-tracked into production.
Those developments mean the likelihood of an extension for the zinc plant is slim to nil.
“The Zinc plant is designed to sustain a throughput of nominal 220,000 tonnes of concentrate per annum. With only Lalor ore, there would not be sufficient concentrate to operate the zinc plant once 777 mine closes,” reads the update, which also states that increasing Lalor production or purchasing concentrate to maintain operations at the zinc plant is not viable right now.
“Copper and zinc prices have been depressed for some time now, and the future price environment remains uncertain. With current metal prices, we simply are not generating sufficient revenue today to fund all of the sustaining capital and growth projects in the Manitoba Business Unit,” said Assabgui in the update.
The update lists the current plan for Flin Flon facilities is to shut down 777 permanently, along with the zinc plant and oxygen plant. The Hudbay mill and tailings facility will be placed on care and maintenance.
Hudbay estimates the size of the company’s future workforce in Manitoba will be around 800 people, including company workers taking on duties in drilling and development at Lalor currently done by contractors.
The company estimates that around 240 Flin Flon employees could retire from Hudbay between January 2020 and the expected operations closure date.
“We should all be proud of the success we’ve had in Manitoba in 2019 – the 777 Mine performed well, Lalor production ramped up to 4500 tonnes per day, the surface plants processed all of the metals produced from the mines, and our exploration team discovered a new deposit in Snow Lake. While copper and zinc prices haven’t worked in our favour recently, we are hopeful they will soon recover, and we will be able to advance other growth initiatives in the region when the time is right,” said Assabgui in the letter.
Exploration
In the same update, Hudbay stated the company does not plan to explore further in or around Flin Flon in 2020, citing insufficient funding.
Instead of exploring close to Flin Flon, the brunt of the company’s exploration budget will be centred around 1901 and other possibilities in the Snow Lake region.
During 2019, Hudbay carried out an exploration program around Flin Flon and northwestern Manitoba, seeking out any other sites of mineral potential. After drilling several targets near Moose Lake and Goose Lake south of Flin Flon, the company deemed those targets “unsuccessful in locating any new deposits.”
Snow Lake plans
Within Snow Lake, Hudbay also confirmed plans to restart the gold mill at the New Britannia site in the community and to maintain the Stall facility for the entirety of Lalor mine’s lifespan.
The New Britannia mill refurbishment will take place in 2020 and 2021. Once the New Britannia mill is refurbished, it will raise Hudbay’s total milling capacity in Snow Lake to 5,300 tonnes per day – several times larger than the minimal throughput of the Flin Flon mill.
“We are also pleased to be continuing with our plans to refurbish the New Britannia mill in 2020 and 2021 which will significantly grow our gold business in Manitoba and create 60 new jobs in the Snow Lake region. The investment in New Britannia will help to ensure that Lalor remains a strong, low cost producer and reliable employer for many years,” said Assabgui in the update.
While exploration budgets in and around Flin Flon were cut completely, exploration will continue near Snow Lake, specifically for the 1901 project. Exploration spending for the site will be reduced, but a winter exploration program at the 1901 site will start later this month.
