Hudbay Minerals has announced a partnership with Marubeni to reignite exploration activities in Flin Flon, Manitoba.
Following the closure of its 777 mine after nearly two decades of operation, Hudbay aims to leverage its expertise alongside Marubeni’s financial strength to unlock the potential of its extensive Flin Flon land package and potentially revive its dormant processing facilities.
“We have discovered and operated 29 mines in Hudbay’s nearly 100-year history in Manitoba and we have the potential to continue that success with this renewed focus on exploration in Flin Flon,” comments president and CEO Peter Kukielski.
For Marubeni, the exploration partnership offers it access to the Flin Flon greenstone belt, which GM Masafumi Ichigetsu says is one of the most prospective base metal volcanogenic massive sulphide camps in the world.
“We see tremendous opportunity in this camp where we have the ability to partner with Hudbay and benefit from their technical expertise and proven track record of successful discovery, development and operation of many mines in the region. We are eager to begin building a long-lasting and prosperous partnership with Hudbay that will undoubtedly yield exceptional results.”
In connection with the memorandum of understanding, Hudbay and Marubeni have agreed to negotiate the terms of a definitive agreement to govern the relationship between the parties and the Flin Flon properties that will form the subject of the exploration partnership.
It is currently contemplated that Marubeni will be required to fund about C$10 million to C$15 million of exploration expenditures on the project properties and that Hudbay will act as operator and carry out the exploration activities.
The MOU also provides a framework for a future joint venture (JV) between the parties if the exploration efforts are successful in discovering new deposits in the Flin Flon region.
Upon satisfaction of certain earn-in obligations, it is expected that Marubeni will have the option to acquire a substantial minority equity interest in the projects, allowing the parties to jointly pursue the development of the projects. The final structure of a JV between the parties will be determined by the terms of a JV agreement.
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