Hudbay Minerals Inc · TSX:HBM
Hudbay Minerals — Q2 2019 Earnings Presentation
27 slides from Hudbay Minerals's earnings presentation, Aug 9, 2019
Slide 1: Q2 2019 Results Presentation
Q2 2019 RESULTS PRESENTATION August 9, 2019
Slide 2: Cautionary Information
CAUTIONARY INFORMATION This presentation contains forward-looking information within the meaning of applicable Canadian and United States securities legislation. All information contained in this presentation, other than statements of current and historical fact, is forward-looking information. Ofte
Slide 3: Conference Call Agenda
CONFERENCE CALL AGENDA Corporate Review Q2 2019 consolidated results Peru Business Unit Q2 2019 operating performance Regional potential Manitoba Business Unit Q2 2019 operating performance Regional potential Strategic Overview Near-term catalysts Investment rationale 3
Slide 4: Q2 2019 Consolidated Results
Q2 2019 CONSOLIDATED RESULTS Strong operating performance KEY RESULTS SUMMARY Q2 2019 Q1 2019 Record mine production at Lalor Production1 and record quarterly throughput Copper kt 30.4 38.0 at the Stall concentrator Zinc kt 31.8 28.0 Consolidated copper production Precious Metals2 koz 39.7 38.7 of 3
Slide 5: Peru Operations Review
PERU OPERATIONS REVIEW PERU SUMMARY OF OPERATING STATISTICS Copper production of 24kt, Q2 2019 Q1 2019 expected with lower planned Ore mined (million tonnes)1 8.2 8.6 grades and mill maintenance shutdown Ore milled (million tonnes) 7.7 8.0 Copper grade milled 0.37% 0.46% Combined unit operating cost
Slide 6: Constancia Optimization
CONSTANCIA OPTIMIZATION BENEFITS OF CONTINUOUS IMPROVEMENT INITIATIVES Achieving targeted copper recoveries Achieving increased mill throughput rates above designed capacity – Q2 throughput at design capacity despite scheduled maintenance shutdown COPPER RECOVERIES PROCESSING PLANT THROUGHPUT1 Techn
Slide 7: Constancia Regional Potential
CONSTANCIA REGIONAL POTENTIAL Since 2012, executed over 90 social agreements with local governments and communities Pleased with progress on Pampacancha negotiations to date with first ore expected in 2020 Exploration work to be conducted on newly acquired properties near Constancia with potential t
Slide 8: Manitoba Operations Review
MANITOBA OPERATIONS REVIEW Q2 2019 was first full quarter of the Lalor KEY RESULTS SUMMARY mine achieving 4,500 tonnes per day Q2 2019 Q1 2019 Ore mined (kt) 700 667 Strong 777 mine performance in Q2 Ore milled (kt) 707 611 Record throughput of 3,770 tonnes per Copper grade milled 1.00% 1.14% day at
Slide 9: Strong Mine and Mill Performance
STRONG MINE AND MILL PERFORMANCE 777 ore output and mining unit costs have been improving Lalor mine and Stall mill throughput have been trending higher 777 ORE MINED AND MINING UNIT COSTS LALOR ORE MINED AND STALL MILL THROUGHPUT 300,000 $95 5,000 $90 250,000 4,000 $85 Mining Cost (C$/tonne) Ore Mi
Slide 10: 1901 Deposit
1901 DEPOSIT POTENTIAL FOR INCREMENTAL PRODUCTION IN SNOW LAKE Initial resource estimate 6 months from discovery in February 2019 Located near existing infrastructure and is 100% owned by Hudbay Mineralization interpreted as two zinc-rich volcanogenic massive sulphide lenses with locally high-grade
Slide 11: 1901 Deposit: Mineralization Remains Open
1901 DEPOSIT MINERALIZATION REMAINS OPEN Mineralization remains open along strike Exploration targets for new discrete zones existing in the immediate vicinity Two drill rigs testing the potential Conservative resource estimation methodology, identical to approach used with Lalor mineral resource es
Slide 12: 1901 Deposit: Significant Gold Values
1901 DEPOSIT SIGNIFICANT GOLD VALUES Drilling in the 1901 deposit has also identified several high-grade gold and copper-gold zones Drilling density not yet at a level to establish mineral resource Expect to establish the continuity of the gold and copper-gold rich mineralization and report a minera
Slide 13: Manitoba Exploration Success
MANITOBA EXPLORATION SUCCESS The initial inferred resource estimate for the 1901 deposit is already ranked within top 10 largest deposits in Flin Flon and Snow Lake based on initial reserve size RESERVES IN THE FLIN FLON AND SNOW LAKE CAMP (MILLION TONNES) Flin Flon 62.5 Mt Lalor Chisel U/G 777 Trou
Slide 14: Snow Lake Regional Potential
SNOW LAKE REGIONAL POTENTIAL HUDBAY HAS A LARGE PROSPECTIVE LAND PACKAGE IN THE SNOW LAKE BELT WITH SIGNIFICANT GOLD EXPLORATION POTENTIAL Proven + Probable Reserves Grade Contained Tonnage Copper Gold Silver Zinc Copper Gold Silver Zinc (Mt) (%) (g/t) (g/t) (%) (kt) (koz) (koz) (kt) Lalor - Base Me
Slide 15: Near-Term Catalysts
NEAR-TERM CATALYSTS SNOW LAKE MINE LIFE EXTENSION Upgrading Lalor inferred resources to reserves Incorporating Wim, New Britannia zones and Pen II into the mine plan Feasibility work on the 1901 zone zinc-rich resources, and incorporate gold mineralization into resource estimate Advance exploration
Slide 16: Hudbay Investment Rationale
HUDBAY INVESTMENT RATIONALE Consistent long-term growth strategy and world-class asset base Proven track record of successful project development Operational excellence and value creation through successful exploration Focused on free cash flow generation and prudent capital allocation Robust projec
Slide 17: Appendix
APPENDIX 17
Slide 18: Maria Reyna Historical Drill Results
MARIA REYNA HISTORICAL DRILL RESULTS A summary of the historical drill results from Maria Reyna is contained in the table below, however a qualified person has not independently verified this historical data or the quality assurance and quality control program that was applied during the execution o
Slide 19: Peru Mineral Reserves
PERU MINERAL RESERVES AS AT JANUARY 1, 2019 CATEGORY TONNES Cu (%) Mo (g/t) Ag (g/t) Au (g/t) CONSTANCIA Proven 421,800,000 0.30 94 2.87 0.035 Probable 72,000,000 0.23 72 3.06 0.035 Total Proven and Probable 493,800,000 0.29 91 2.90 0.035 PAMPACANCHA Proven 32,400,000 0.59 178 4.48 0.368 Probable 7,
Slide 20: Peru Mineral Resources
PERU MINERAL RESOURCES AS AT JANUARY 1, 2019 CATEGORY TONNES Cu (%) Mo (g/t) Ag (g/t) Au (g/t) CONSTANCIA Measured 169,400,000 0.18 50 2.19 0.028 Indicated 180,500,000 0.20 56 2.16 0.034 Inferred 50,800,000 0.24 43 2.41 0.046 PAMPACANCHA Measured 11,400,000 0.41 101 4.95 0.245 Indicated 6,000,000 0.
Slide 21: Snow Lake Reserves & Resources
SNOW LAKE RESERVES & RESOURCES AS AT JANUARY 1, 2019 PROPERTY CATEGORY TONNES Cu (%) Zn (%) Au (g/t) Ag (g/t) Proven 5,137,000 0.76 7.13 2.37 26.31 Base Metal Zone Probable 5,552,000 0.44 4.19 3.52 27.39 Proven 58,000 0.80 2.65 5.46 39.09 Gold Zone Probable 2,928,000 1.09 0.31 6.74 23.08 Total Lalor
Slide 22: Flin Flon Reserves & Resources
FLIN FLON RESERVES & RESOURCES AS AT JANUARY 1, 2019 PROPERTY CATEGORY TONNES Cu (%) Zn (%) Au (g/t) Ag (g/t) Proven 2,169,000 1.80 4.44 1.77 26.45 777 Reserves Probable 1,384,000 0.97 3.75 2.03 21.65 Total 777 Mineral Reserve 3,552,000 1.48 4.17 1.87 24.58 Indicated 375,000 1.13 4.05 1.79 29.57 777
Slide 23: Rosemont Reserves & Resources
ROSEMONT RESERVES & RESOURCES AS AT JANUARY 1, 2019 MINERAL RESERVES CATEGORY Tonnes Cu (%) Mo (%) Ag (g/t) Proven 426,100,000 0.48 0.012 4.96 Probable 111,000,000 0.31 0.010 3.09 Total 2P Reserves 537,100,000 0.45 0.012 4.58 MINERAL RESOURCES1 CATEGORY Tonnes Cu (%) Mo (%) Ag (g/t) Measured 161,300
Slide 24: Ann Mason Reserves & Resources
ANN MASON RESERVES & RESOURCES AS AT MARCH 3, 2017 PROJECT RESOURCE ESTIMATES CATEGORY Tonnes Cu (%) Au (g/t) Ag (g/t) Mo (%) Measured & Indicated 1,400,000,000 0.32 0.03 0.65 0.006 Inferred 623,000,000 0.29 0.03 0.66 0.007 24
Slide 25: Additional Information
ADDITIONAL INFORMATION The reserve and resource estimates included in this presentation were prepared in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) and the Canadian Institute of Mining, Metallurgy and Petroleum Standards on Mineral Resourc
Slide 26: Additional Information – Zone 1901
ADDITIONAL INFORMATION – ZONE 1901 Supplemental information to the Zone 1901 drill results From (m) To (m) Azimuth at Dip at Hole ID Easting Northing Elevation Easting Northing Elevation Intercept Intercept CH1916 427067 6078909 -270 427068 6078909 -278 087 -85 CH1918 427094 6078818 -265 427094 6078
Slide 27: For More Information Contact
F O R M O R E I N F O R M AT I O N C O N TA C T: Candace Brûlé, Director, Investor Relations 416.814.4387 | candace.brule@hudbay.com