Hudbay optimistic about Peru operations

Canadian mining company Hudbay Minerals, with operations in Peru, is projecting increased production due to announcements of regulatory improvements and better ore grades.

“We are evaluating the potential to increase planned production levels at Constancia, as early as 2026, which could partially offset the grade declines after the completion of mining at Pampacancha in late 2025,” the latest results report said.

Combined, Constancia and Pampacancha, in Cusco region, produced 43,793t copper, 39,816oz gold, 1.09Moz silver and 766t molybdenum in the first half. 

Both are part of the southern mining corridor, where mines such as Las Bambas and Antapaccay also operate.

The energy and mines ministry (Minem) recently implemented a rule change under which mines with active concessions may increase average daily processing capacity by up to 10% without having to request permits.

President and CEO Peter Kukielski told the results call that Constancia will represent two-thirds of the company's Peruvian production in 2024 and Pampacancha the rest.

Guidance for Peru this year is 98,000-120,000t copper, 76,000-93,000oz gold and 2.5-3.0Moz silver.

Copper output is expected to rise on higher ore grades at Pampacancha.

“Ore grades vary from quarter to quarter. Towards the end of 3Q24 we will see improvements, and in 4Q24 grades of up to 0.57%,” CFO Andre Lauzon told the call.

In Q2, the company reported copper ore grade of 0.3%.

Hudbay also has the María Reyna and Caballito copper exploration projects in Peru. Capex for María Reyna is US$13.3 million, according to Minem.

The project's environmental management instrument, required to begin drilling, was approved in June, while the environmental assessment stage for Caballito just started.