Hudbay secures permit for Copper Mountain expansion

Hudbay Minerals (TSX, NYSE: HBM) has secured permission from the British Columbia government to proceed with a three-phased expansion of its Copper Mountain open-pit mine that would extend the operation into 2040.

Hudbay said it has received amended environmental permits issued by the B.C. Major Mines Office for the New Ingerbelle expansion project at Copper Mountain, one of the largest copper producers in Canada, according to a statement issued Friday. The project will take about two years to construct including haul roads, a bridge and some ponds, the company said.

Building New Ingerbelle “could add value to Copper Mountain starting in 2028,” TD Cowen mining analyst Craig Hutchison said in a note Monday. “New Ingerbelle has slightly lower copper grades, but 60% to 100% higher gold grades.”

Pushbacks

The project comprises a series of nested pit designs that are “pushbacks” on the existing historical Ingerbelle pit, designed to unlock access to higher-grade mineralization to boost the site’s copper production by 90%, according to company material.

Upon completion, the New Ingerbelle expansion is expected to add 10 years of mining to Copper Mountain, extending the mine schedule until 2037. During the extended lifespan, it is projected to contribute about 750,000 tonnes of copper, 900,000 oz. of gold and 5.5 million oz. of silver production, based on current reserves, Hudbay said.

From 2036 to 2040, the open-pit mine operation would begin re-handling low-grade ore stockpile and enter the reclamation and closure phase. Located in south-central B.C., the mine sits about 20 km south of the town of Princeton.

Hudbay rose 1.7% to C$37.40 in early afternoon Toronto trading Tuesday, giving the company a market capitalization of about C$14.8 billion ($10.8 billion). The stock has traded between C$8.49 and C$38.80 in the past year.

Economic driver

Beyond its mineral output, the expansion serves as an economic engine for B.C. It is expected to contribute about C$11.5 billion to the province’s GDP and preserve 800 direct jobs, the company said.

“The Ingerbelle expansion will ensure hundreds of good jobs are retained for the Princeton community, providing economic benefits to the community and the province for years to come,” Jagrup Brar, B.C.’s Minister for Mining and Critical Minerals, said in the press release.

In addition, Hudbay said it proactively engaged local communities for collaborative oversight throughout the permitting process. It recently signed participation agreements with two First Nations groups.

BC support

Approval of Hudbay’s New Ingerbelle expansion project is the latest example of B.C.’s push to bolster its supply of minerals key to the energy transition. The support extends beyond current producers. Last week, the province selected three early-stage developments, including two copper projects, for expedited permitting.

“The New Ingerbelle permit ensures that we’ll be able to advance this major project while extending our partnership with local communities to facilitate additional growth investments at Copper Mountain and further adds to our 99 years of successful operations in Canada,” Hudbay CEO Peter Kukielski said in a press release.

Copper Mountain’s mining history dates back to 1884, evolving from early underground operations to a major open-pit producer in the 1920s. However, due to market conditions, it was shut down in 1959 and was left idled for about three decades. The modern mine restarted in 2011 under its previous owner.

Toronto-based Hudbay acquired Copper Mountain in June 2023. The site features a 45,000-tonne-per-day processing plant that utilizes a conventional crushing, grinding and flotation circuit to produce copper concentrates with gold and silver credits. Last year, it produced 22,445 tonnes of copper, 19,465 oz. of gold and 221,406 oz. of silver.