Hudbay pauses Snow Lake mine due to wildfire

Hudbay Minerals (TSX, NYSE: HBM) has temporarily suspended operations at its Snow Lake gold-zinc-copper mine in Manitoba due to surging wildfires and pledged $1 million in financial relief for its employees.

Despite the halt, Hudbay management still expects to achieve its 2025 annual guidance for its Manitoba operations, citing strong performances to date. Last year, Snow Lake produced 214,225 oz. of gold, 12,536 tonnes of copper, 33,339 tonnes of zinc and nearly 1 million oz. of silver.

The suspension, which includes the exploration programs in partnership with Marubeni, follows a local state of emergency and precautionary voluntary evacuation notice issued Tuesday by the town of Snow Lake, where the Canadian miner operates its underground mine with over 1,100 employees. The town is about 690 km north of Winnipeg.

“We are collaborating closely with local communities and municipal and provincial authorities to provide support during this challenging time,” Rob Carter, Hudbay’s senior vice president for Canada, said in a release on Wednesday. “We will continue to monitor the situation, ensuring a safe return to full operations as soon as it is advisable.”

State of emergency

Hudbay’s move comes as Manitoba experiences its worst fire season in years and remains in a province-wide state of emergency. About 17,000 people have fled 27 active fires and a total of 111 wildfires to date this season, much higher than the average of 88 total fires, according to the province. Firefighting resources are stretched thin when the province can usually divert equipment from unaffected areas, Premier Wab Kinew said last week.

Hundreds of people fleeing the fires have filled the province’s hotels, with some going as far away as Niagara Falls, Ont. 

Hudbay’s early evacuation positions the company well for a safe return to full operations once conditions permit, it said. Only essential personnel, authorized by emergency services, will remain in Snow Lake to assist with emergency activities. In addition to assisting the firefighting efforts and financial relief for employees, it’s set up a donation fund for affected communities.

Last week, the company removed its non-essential staff from the Flin Flon region near the Saskatchewan border. It still conducts care and maintenance work there to support the Snow Lake mine operation, about 200 km east of Flin Flon. Its infrastructure and facilities in both Snow Lake and Flin Flon are “well-protected from the wildfires and have a low risk of being damaged,” Hudbay said Wednesday.

Shares of Hudbay Minerals gained 0.5% at $12.90 apiece by mid-afternoon Wednesday, giving the Toronto-based miner a market capitalization of $5.1 billion.

Spreading wildfire

The wildfire just north of Flin Flon is still burning out of control and is threatening other communities including Big Island Lake, Schist Lake and Bakers Narrows, the government said Wednesday. 

Last week, Canadian Gold (TSXV: CGC) said it had withdrawn staff and suspended operations at its Tartan mine, about 12 km northeast of Flin Flon. 

The blazes have caused suspensions at other mine operations in Manitoba, including Alamos Gold’s (TSX, NYSE: AGI) Lynn Lake project, Grid Metals’ (TSX: GRDM; US-OTC: MSMGF) projects and Sinomine’s Tanco mine, one of Canada’s two producing lithium mines.

In neighbouring Saskatchewan, where a state of emergency is also in effect, Foran Mining (TSX: FOM; US-OTC: FMCXF) has deployed fire control measures, which, in addition to recent weather conditions, has slowed the advance of fires towards its McIlvenna Bay copper project, the company said on Monday. In late May, Foran evacuated about 540 non-essential staff from the site and 44 employees and specialized wildfire contractors remained to protect project assets.  

Firebreaks and natural barriers such as marshes have contained the fire edge, which hasn’t advanced further than 1 km from the tailings store facility and about 3 km from the main site.

Saskatchewan evacuees

The province faces significant wildfire risks, with 21 blazes currently active, eight out of control and 238 wildfires reported to date, the provincial government said Wednesday in an update. About 9,000 people have evacuated their homes and Premier Scott Moe has said up to 15,000 people might have to evacuate in the coming days, CBC reported.  

In northern Saskatchewan, the operations of uranium major Cameco (TSX: CCO; NYSE: CCJ) currently face no risk from the fires, which aren’t close to its Cigar Lake, Key Lake, McArthur River and Rabbit Lake sites, the company said on Tuesday. 

The company is accommodating requests for employees to leave sites to take care of their families and home communities, Cameco said. There have been some temporary disruptions affecting power and communications services to its operations. Road closures have also held back some deliveries to its sites. 

Alberta oil 

In Alberta to the west, wildfires in an area about 500 km northeast of Edmonton have disrupted oil production, forcing the shutdown of about 344,000 barrels per day (bpd) — roughly 7% of Canada’s total output. Cenovus Energy (TSX: CVE; NYSE: CVE) halted around 238,000 bpd at its Christina Lake oil sands site. Canadian Natural Resources (TSX: CNQ; NYSE: CNQ) suspended 36,500 bpd at its Jackfish 1 operation, but has since resumed.

MEG Energy (TSX: MEG) was working to restore about 70,000 bpd due to a power outage affecting its Phase 2B facility. Aspenleaf Energy, a private company, also shut in roughly 4,000 bpd of conventional oil production near Swan Hills. While fire risks are easing in some areas, several sites remain offline pending further safety checks.