Hudbay Mineral’s is liquidating $34.5 million in previously purchased equipment and deposits on future equipment that was slated to be used at its proposed Rosemont copper mine but is no longer useful based on recent engineering studies.
Toronto-based Hudbay reports in its 3Q Management Discussion and Analysis that the equipment purchased and deposits made by Rosemont’s previous owner, Augusta Resource Corporation, are no longer needed. Hudbay, which mines copper and zinc at three Manitoba mines and recently opened the massive Constancia open-pit copper mine in Peru, acquired Augusta in 2014 in a $500 million stock deal.
The decision to unload unneeded equipment comes at the same time as Hudbay struggles with declining copper prices, mounting debt and steadily increasing stockpiles of unsold copper, gold and silver concentrate that has swelled from 6,000 tonnes at the end of the 1st Quarter to more than 100,000 tonnes at the end of the 3rd Quarter on Sept. 30. (A tonne is equal to 2,240 pounds.)
Hudbay states it decided to sell the Rosemont mine equipment following “the completion of a value engineering process in the second and third quarters of 2015.” Continue reading