HudBay Minerals plans to close its Balmat, New York State, zinc mine and concentrator. As a result of lower prices for zinc metal, continued high operating costs associated with the geology of the Balmat mine and general inflationary pressures, HudBay has determined that this operation is not economically viable given current market conditions. The Balmat mine was reopened in 2005 based on a feasibility plan that assumed lower costs and higher levels of production than were achieved to date.
“HudBay would like to recognise the hard work and contributions of this team over these past three years and thank them for their service and dedication,” said Brad Lantz, Vice-President Mining, HudBay. “We also extend our sincere appreciation to the entire Balmat community.” The announcement will affect approximately 200 workers employed at the Balmat mine and concentrator. Operations are expected to cease on August 22, 2008. A small group of employees will be retained to keep the facility on care and maintenance. HudBay will continue to test geophysical anomalies within its exploration territories in the region as part of its overall 2008 exploration program announced earlier in the year. HudBay indicated that affected employees will receive transition support and the company will work with employees closely during this difficult time.

The company does not expect to incur significant costs associated with closure. HudBay’s total zinc production for 2008, including Balmat’s contribution through the first eight months of the year, is now expected to be at the lower end of the Company’s previously disclosed production guidance range of 120,000 to 150,000 t of zinc, including Balmat payable metal in concentrate shipped.