Hudbay is in the process of completing the final engineering work for the load-out facilities located at the 955 metre level, as well as the main pumping installations. The company is preparing for construction of the main intake fan systems and the main substation, which is scheduled to be completed in the fourth quarter of 2013.
Hudbay expects to submit the Environment Act Licence application for the new concentrator to the Manitoba government in the second quarter of 2013. The new design will incorporate a larger grinding circuit being fed from the surface stockpile. Hudbay will hoist uncrushed ore up the main production shaft at Lalor to be crushed on surface and then conveyed to the surface stockpile. The stockpile will feed a SAG mill and ball mill combination that has design capacity of 5,400 tonnes per day.
Reed Copper Project
During the first quarter, Hudbay's focus for its 70% owned Reed copper project near Flin Flon, Manitoba was advancing the underground ramp and sinking the escape and ventilation raises from surface. Of Hudbay's $72 million capital construction budget, the company has invested approximately $37 million on the project to March 31, 2013 and has entered into an additional $13 million in commitments. Capital expenditures at Reed are expected to total approximately $44 million in 2013.
After completing the first portal development round in October 2012, the underground ramp had advanced approximately 363 metres as of March 31, 2013. In March 2013, Hudbay was able to start hauling waste from underground via haul trucks, which is expected to reduce cycle times and improve the rate of ramp development.
Hudbay expects initial production at the Reed copper project by the fourth quarter of 2013 and full production of approximately 1,300 tonnes of ore per day by the first quarter of 2014.
Hudbay has incurred approximately US$480 million in costs of its US$1.5 billion capital construction budget on the Constancia project to March 31, 2013 and has entered into an additional US$534 million in commitments for the project.
The company has secured the mine fleet with 18 haul trucks scheduled for delivery between June 2013 and August 2014.
Tire procurement is underway with a number of tires purchased and contracts arranged to meet fleet requirements. Hudbay expects the arrival of the three hydraulic shovels in August 2013, September 2013 and January 2014, respectively, and to begin pre-stripping activities late in 2013.
Development of the project is approximately 25% complete. Civil earth works for the process plant area are approximately 70% complete and remain on schedule. The principal foundations for the ball and SAG mills are poured and complete. Forms are being erected for the reclaim tunnels and crusher foundation. Progress on the tailings management facility has been negatively impacted by the unusually high rainfall in the first quarter. However, the dry season commenced in April and Hudbay believes the impact on project schedule is recoverable. Targets for initial production in late 2014 and full production in the second quarter of 2015 remain unchanged.
Land access for the power transmission line is being arranged and the negotiation of the power purchase agreement is well advanced. The principal port operator has provided assurances that the concentrate shipments will be accommodated, and Hudbay is considering short term and long term solutions to best serve the project's needs.
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