Hudbay inks exploration deal for satellite properties near its Constancia copper mine in Peru

Hudbay Minerals (TSX, NYSE: HBM) has reached an exploration agreement with the Uchucarcco community in Peru for the surface rights to the Maria Reyna and Caballito satellite properties near its Constancia mine, located about 600km southeast of Lima. These satellite properties consist of a large, contiguous block of mineral rights held by Hudbay, with the potential to host mineral deposits close to the Constancia processing facilities.

Maria Reyna is located within 10 km of Constancia and consists of a 58.5-sq.-km concession block. Diamond drilling by a previous optionee of the property resulted in a copper skarn-porphyry discovery. Geophysical surveys and geological mapping have also been conducted on the property and the area remains very prospective for additional discoveries.

The Caballito property, located approximately 3 km northwest of Constancia, is a 1.2-sq.-km concession block and is the site of the former Katanga mine, which was in intermittent copper oxide production from the early 1900s until the early 1990s.

Processing facilities at Hudbay Minerals’ Constancia mine in Peru. Credit: Hudbay Minerals

“We are very pleased to have reached an exploration agreement with the Uchucarcco community on these highly prospective properties,” said Peter Kukielski, Hudbay’s president and CEO. “Historic drilling at Maria Reyna indicates attractive grades over wide intersections starting at surface, and the past-producing Caballito property has the potential to add higher-grade copper mineralization to our Constancia operations.”

Hudbay expects to commence early field exploration activities soon, and finalization of the Uchucarcco agreement is anticipated to increase community investment costs in the second half of 2022. The planned exploration programs at Maria Reyna and Caballito have been prepared using information from the company’s geophysics surveys in the region and the historical drill intersections.

The Maria Reyna and Caballito properties were acquired by Hudbay in 2018, along with the nearby Kusiorcco property. These mineral properties are all situated within the regional mineralization trend of the Andahuaylas-Yauri belt and provide the company with a large block of mineral rights within trucking distance of the Constancia facilities.

The Constancia copper operation in Peru first went online in 2014, beginning with the Constancia open pit and then the nearby Pampacancha satellite pit seven years later. Last year, Constancia produced 77,813 tonnes of copper, 50,306 ounces of gold and 1.97 million ounces of silver.

Hudbay shares were trading at $6.11 in Toronto as of noon Thursday. The equity has traded in a 52-week window of $4.07 and $11.17, giving it a market cap of $1.6 billion.