Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Base and precious metals miner Hudbay Minerals (TSX, NYSE:HBM) has agreed to buy a series of mining properties in southern Peru near its Constancia copper mine, which will see the Canadian company expanding its footprint in the country, the world’s second largest producer of the red metal.
The Toronto-based miner has now the option to buy a 100% interest in the Caballito (formerly Katanga) and Maria Reyna mining properties from a private Peruvian consortium. It can also gain the Kusiorcco mining properties from Vancouver-based Panoro Minerals (TSX-V:PML).
The Caballito property, about 3 km northwest of Hudbay’s Constancia mine, is the site of the former Katanga mine, which produced copper oxide on and off since the early 1900s to the early 1990s.
The Maria Reyna property is located within 10 km of Constancia, which Hudbay gained in 2011 with the acquisition of Norsemont Mining Inc.
The Kusiorcco property is just 7 km away from the company’s mine, which has been in operations since 2015.
Mining properties near Hudbay’s Constancia mine. (Courtesy of Hudbay Minerals.)
Hudbay said it would now focus on permitting, community relations and technical activities to access and conduct drilling activities on the concessions. It expects to provide further details on its exploration plans for these properties later in the year.
The Canadian miner has recently faced challenges in both, the US and Guatemala. Environmentalists have linked the company’s $1.5-billion Rosemont Project, in the Santa Rita Mountains, about 50 km southeast of Tucson, with potential pollution and laws infringement.
In Guatemala, in turn, Hudbay is facing allegations that employees of one of its former subsidiaries raped five women from a remote community. The company has repeatedly stated the alleged events pre-date its business interests and operations in the Central American nation.
