HudBay has hedged about 50% of the anticipated zinc production from Chisel North at an average price of about $1.01/lb of zinc to ensure that Chisel North remains economic at lower zinc prices, while providing upside price exposure for the remaining 50% of its zinc production. The Chisel North mine and Snow Lake concentrator had been on care and maintenance since the first quarter of 2009, due to depressed zinc prices of around $0.50/lb. By late October 2009, zinc prices had recovered to about $1.00/lb.

Announcement of the restart at Chisel North followed an announcement earlier in October that HudBay will drive a C$85- million ramp from Chisel North to access its proposed Lalor underground mine. HudBay expects the ramp to reach Lalor’s zinc-rich No. 10 base metals zone in about 30 months and, subject to receiving applicable regulatory approvals, initially to produce approximately 1,200 mt/d of Lalor ore. Restarted production from Chisel North and early production from Lalor will help provide a continuous feed of domestic Canadian zinc concentrate to the Flin Flon zinc plant until Lalor reaches full production, which is expected in 2014.