Now, imagine going all in on beefing up your favorite recipe, throwing in extra spices, and doubling up on the prime ingredients to make it a crowd-pleaser. That’s precisely what Hudbay Minerals Inc. is doing with its Copper Mountain mine.
The mining giant is all set to unleash a mammoth 21-year mine plan featuring operational upgrades such as reactivating idle haul trucks, expanding mining fronts, and ramping up stripping operations to tap into richer ore. A whopping C$31.2 million capital investment in 2025-26 is in the works to crank up mill throughput to 50,000 tonnes per day.
But here’s the kicker – the financial gains from the impending surge in production might just be shackled by the hefty upfront investment it demands. Simply put, it’s like splurging on a top-of-the-line sound system for your party but feeling the pinch later when the bills come crashing in.
Canaccord Genuity Capital Markets’ mining analyst, Dalton Baretto, finds himself toe-to-toe with these concerns. “While the mid-term production forecast is a notch better than our expectations, the economic implications have been dampened by about 50% of the higher capex being loaded upfront during the 2024-2026 stretch,” he opined in a note to clients.
For Hudbay, this move didn’t come easy – the $439 million takeover of Copper Mountain and its namesake mine in June marked the beginning of this high-stakes game. Hudbay’s President and CEO Peter Kukielski has his cards close to the chest, emphasizing that the upbeat assumptions in the 2022 life of mine plan weren’t exactly their cup of tea.
Yet, the Copper Mountain jackpot is poised to be a jewel in Hudbay’s illustrious crown, as Kukielski chimed in, “With Copper Mountain on board, we expect to propel annual consolidated copper production upwards of 150,000 tonnes till the curtain falls on this decade, paving the way to smash our debt-reduction goals and rev up our copper footprint down the line.”
Do they plan on stopping there? Absolutely not! Hudbay’s eyes are also scanning the horizon for renewable diesel fuel, installing wind turbines, and even toying with the idea of trolley-assist trucks and conveyors for haulage – a feast of plans to supercharge Copper Mountain’s prowess.
Ever since Copper Mountain’s acquisition, Hudbay holds 75% stake in the mine, nestled 21 km to the south of Princeton, with Japan’s Mitsubishi Materials owning the remaining 25%.
Not everything is sunshine and roses, though. The clouds gathered on Tuesday for Hudbay – its shares plunged 1.6% to C$6.24, dragging its 12-month trajectory down by 20.5%. Those numbers could make any shareowner wince! The share prices have oscillated between C$5.46 and C$8.47 over this term, with Hudbay’s market cap pegged at C$$2.2 billion.