Hudbay Minerals has reclassified the amount of copper at its proposed Rosemont mine made by former owner Augusta Resource Corporation as “historical estimates” rather than as current mineral reserves.
“A qualified person has not done sufficient work for us to classify Rosemont’s mineral reserves or resources as current mineral reserves or resources,” the Toronto-based company stated in its Annual Information Form for 2014 released on March 30.
The lack of a “qualified person” raises questions over Augusta’s previous feasibility studies that provided resource estimates for the proposed open pit copper mine in the Santa Rita Mountains on the Coronado National Forest southeast of Tucson.
Augusta’s feasibility studies released in 2007, 2009 and 2012 were required to meet Canadian regulatory standards by having a “qualified person” make resource estimates.
The reclassification also raises questions with the size and exact location of the copper resource that Hudbay wants to mine and raises the possibility that Hudbay intends to greatly expand its mining footprint in the Santa Ritas.
Hudbay’s growth policy focuses on developing “mineral assets that we believe offer significant potential for exploration, development and optimization.” (Emphasis added.)
Scrapping Augusta’s copper resource estimates also raises questions about the accuracy of the Coronado National Forest’s Final Environmental Impact Statement for the Rosemont copper project released in December 2013.
The FEIS was based on Augusta’s Mine Plan of Operations submitted in 2007 and as modified by subsequent feasibility studies including the 2012 report.
Soon after acquiring Augusta last summer, Hudbay began a 43-hole “confirmatory drill program” at the site for the proposed mile-wide, half-mile deep open pit copper mine that is projected to produce 240 million pounds of copper a year for 21 years.
Hudbay completed the drilling in December and is continuing metallurgical testing of the core samples.
While, Hudbay states it doesn’t anticipate significant changes to copper resource estimates included in Augusta’s feasibility study, the company also warns that unexpected findings from its ongoing analysis may occur.
“We are currently reviewing the cost, production and other assumptions underlying the previous feasibility study for the Rosemont project and are advancing the basic engineering,” the AIF states.
“Once our review is complete and the engineering is sufficiently advanced, we expect to complete a feasibility study, including an estimation of the mineral resources and reserves at Rosemont.
“Any changes that we make to assumptions, or any such assumptions otherwise proving incorrect, could negatively impact project economics for Rosemont.”
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