Manitoba brings copper for HudBay, VMS

HudBay Minerals (HBM-T, HBM-N) and VMS Ventures (VMS-V) have a high-grade copper project on their hands right in the safe confines of Manitoba.

The partners released a National Instrument compliant 43-101 resource estimate at the Reed Lake polymetallic deposit near Snow Lake that showed indicated resources of 2.55 million tonnes grading 0.64 gram gold, 7.86 grams silver, 4.52% copper and 0.91% zinc. That works out to 52,469 oz. gold, 644,382 oz. silver, 253.6 million lbs. copper and 51 million lbs. zinc.

The resource was calculated using a copper equivalent cutoff grade of 1.5% and metal prices of US$900 per oz. gold, US$15 per oz. silver, US$2.50 per lb. copper and US$1 per lb. zinc. 

VMS says the estimate provides the basis for a prefeasibility study that will likely take up the bulk of the year, with a construction decision coming by year-end.

HudBay is the operator of Reed Lake and has a 70% interest while VMS has a 30% carried interest.

Neil Richardson, VMS’s chief operating officer, says the economics of the project will likely benefit not only from high grades, but also due to the high-grade copper being near surface and vertical structures.

Richardson adds there is a “likelihood” that the deposit will be in production next year.

Drilling is currently testing for more lenses of sulphide mineralization in and around the deposit.

Exploration outside of the deposit is being done via 15 drill holes with drilling expected to be wrapped up by late June.

VMS also has the Cowan River project, which is 10 km to the east of Reed Lake, where it is testing three anomalies. The company expects to release the results soon.

For HudBay, the news from Reed Lake ties in nicely with an announcement from the company on March 29 which said its copper-equivalent reserves have nearly quadrupled in one year to 39.2 lbs. per share from 11.3 lbs. per share last year.

It largely credits the increase to its recent $520-million acquisition of the Constancia copper-molybdenum-silver project in Peru from buying Norsemont Mining.

In Toronto on April 1, the day the news was released, HudBay shares were up 2% or 35¢ to $16.14 on 1.1 million shares traded, while VMS shares fell 2¢ to 69¢ on 590,000 shares traded.