Low base metal prices have prompted HudBay Minerals Inc. to shut down its mine in Snow Lake, Man.

Zinc and copper miner HubBay Minerals announced on Friday that it will be classifying its Chisel North mine and concentrator in Snow Lake as under care and maintenance because of low base metal prices and the economic downturn.

"It's purely economic," said Tom Goodman, senior vice-president of operations for the company. "The Snow Lake mine is a zinc mine and doesn't have the advantage of our other mines of having by-product credits so it's really sensitive to the price of zinc."

The mine has produced about 2.5 million tones of ore since its commercial production began in June 2000.

Operations at the mine, located about 700 kilometres north of Winnipeg, will cease fully by the end of February, Goodman said. The concentrator will be stop functioning in May.

A small group of employees will be maintained to keep the mine under care so it can be reopened if mineral prices turn around, Goodman said.

"We keep things warm and water pumped out, and we'll continue to treat all of the water effluent from the mine, maintain our tailing facilities and the like," he said.

But about 100 people will lose their jobs in the community of 800.

"We recognize this will be difficult for Snow Lake, and we're committed to working with the community throughout this challenging period," said HudBay CEO Allen Palmiere. "We regret the impact this will have on the community and our employees."

Some of the employees may be relocated to HudBay's operations in Flin Flon, 200 km to the east, Goodman said.

Gold found

In a separate development, HudBay reported on Friday it has discovered a new gold zone at the Lalor deposit in the Flin Flon Greenstone Belt in northern Manitoba.

The discovery means that Lalor will likely be HudBay's next mine site, Palmiere said.

"The discovery of the Lalor deposit illustrates the excellent exploration opportunities available in the area, and I believe the Chisel North mine and the Snow Lake concentrator remain important assets in the ongoing feasibility and future productivity of the Lalor deposit," he added.