Hudbay Minerals Inc · TSX:HBM
Hudbay Minerals — Credit Suisse 2010 Global Steel and Mining Conference
35 slides from Hudbay Minerals's conference presentation, Sep 22, 2010
Slide 1: Strength to Build the Future
Strength to Build the Future Investor Presentation – Credit Suisse Global Steel and Mining Conference September 22-23, 2010 David Garofalo, president and chief executive officer David Bryson, senior vice president and chief financial officer John Vincic, vice president of investor relations and corp
Slide 2: Forward Looking Information
Forward Looking Information This presentation contains "forward-looking information" within the meaning of applicable securities laws. Forward-looking information includes but is not limited to information concerning the company’s ability to develop its Lalor project and 777 North expansion, the abi
Slide 3: Forward Looking Information – Lalor Project
Forward Looking Information Lalor Project HudBay's production decision with respect to Lalor was not based on the results of a pre-feasibility study or feasibility study of mineral resources demonstrating economic or technical viability, because significant portions of the deposit are not able to be
Slide 4: Investment Highlights
Investment Highlights • Operational Excellence • Cash costs of negative US$0.49 per pound of zinc sold in Q2 2010 • 1,400 employees with an average of 23 years of service • ISO14001 and OHSAS 18001 certified for environment, health and safety • 155 million tonnes from 26 mines discovered over 80 yea
Slide 5: Investment Highlights
Investment Highlights • Growth Potential • Lalor go ahead expected to nearly double annual gold production • Emerging "mid-tier level" gold production and undervalued resources • Reed Lake and other prospects provide potential growth in Northern Manitoba • One of the largest exploration budgets in C
Slide 6: Strong Financial Results
Strong Financial Results ($000s except per Three months ended Six months ended share amounts) June 30 June 30 2010 2009 2010 2009 Revenue 191,851 197,657 432,171 359,441 Net earnings 13,273 89,415 36,832 85,457 EBITDA1,2 69,707 28,598 153,151 44,091 Operating Cash Flow1,3 41,027 28,865 100,098 42,83
Slide 7: Operating Highlights - Production
Operating Highlights - Production Three months ended Six months ended 2010 Production June 30 June 30 Guidance (contained metal 2010 2009 2010 2009 in concentrate)1 Zinc tonnes 24,961 16,867 40,103 36,757 75-90,000 Copper tonnes 12,123 11,036 23,840 23,895 45-55,000 Gold troy oz. 21,002 22,610 41,01
Slide 8: Strong Financial Position
Strong Financial Position At June 30, 2010 Cash Position 1 $911.8 million Working Capital $923.6 million Long Term Debt 0 Shares Outstanding 148.9 million Annualized Dividend Yield 1.8% 1 Not including $60 million restricted cash in support of letters of credit; potential release upon completion of
Slide 9: North and Central America Locations
North and Central America Locations Snow Lake Chisel North Mine Concentrator Lalor Project Flin Flon 777 & Trout Lake Mines Concentrator Zinc Plant Toronto Head Office Zinc Oxide Plant Michigan Back Forty Deposit Guatemala Fenix Project 9 September 2010
Slide 10: Manitoba Mines
Manitoba Mines 777: Flagship Mine Trout Lake Chisel North Ownership • 100% • 100% • 100% Life of mine • 2020 • 2012 • 2012 Mining Cost/tonne ore • $36.811 • $61.951 • $56.512 Annualized Production3: • Copper • 35,400 tonnes • 12,400 tonnes • - • Zinc • 58,200 tonnes • 17,800 tonnes • 21,500 tonnes4
Slide 11: Full Commitment to Lalor Development
Full Commitment to Lalor Development (100% Owned) • Accelerated $560 million construction program with first production in second quarter of 2012 • Exploration upside at Lalor remains significant • Aggressive exploration program is ongoing Shaft Development Shaft construction Full Ramp production De
Slide 12: Shaft Development
500m Vent Raises Production Early Shaft Ram Production p fr o 10 m Ch Gold Exploration isel Platform 750m 11 Ric h Zn 31 30 20 24 R ich Au 21 1000m 25 26 Au Cu- Proposed Development 27 40 1250m Cu- Base Metal Resource Au z on e Gold Inferred Resource Gold Potential Mineral DUB-270 4.8m 7 g/t Au, 21
Slide 13: Strong Projected Zinc and Precious Metals Growth
Strong Projected Zinc Growth1 Strong Projected Precious Metals Growth2 200 200 Nearly 100% 150 150 50% 100 100 50 50 0 0 2010 2011 2012 2013 2014 2015 2016 2010 2011 2012 2013 2014 2015 2016 1 Zinc Payable Mine Production (000s/Tonnes). Includes forecast production from existing mines together with
Slide 14: Gold Equivalent Production
2009 Gold Equivalent Production 500 450 400 350 300 000s oz. 250 200 150 100 50 0 1 d 09 d E g es o rs es ol ol 16 in af 20 de in rc G G in m 20 M ou in os ay M on Se ay on ef es B m ar m in ud B iz la gu R am M ud ur A H ar Ja G A H St n de ol G 1 Includes forecast production from existing mines to
Slide 15: HudBay Gold Inventory
HudBay Gold Inventory Tonnes Au Ag Contained (g/t) (g/t) Au Equivalent (oz) Reserves 14,546,900 2.01 27.47 1,153,744 Measured & Indicated Resources 21,800,000 1.81 27.14 1,331,636 Inferred Resources 12,892,100 2.92 29.77 1,368,623 Conceptual Estimates 6,900,000 – 4.69 – 21.7 – 1,120,000 – 8,300,000
Slide 16: Flin Flon Greenstone Belt
Flin Flon Greenstone Belt Cold Lake/Lost Lake Deposits Lalor Trout Lake Mine Deposit Snow Lake Snow Ore Concentrator Lake 777 Mine Flin Flon Chisel North Mine Reed Flin Flon Lake Amisk Ore Concentrator Hwy #39 Lake Zinc plant Reed Lake Deposit Hwy N N #10 16 September 2010 25 km
Slide 17: Leveraging Opportunities in the Greenstone Belt
Leveraging Opportunities in the Greenstone Belt • Initiating development of 777 North (100% owned) • $20 million approved by Board • Drilling at Reed Lake to advance to development stage • Ongoing exploration on Halo’s Lost and Cold Properties 17 OPTIMIZING NORTHERN MANITOBA September 2010
Slide 18: The Back Forty Project – Overview
The Back Forty Project – Overview Back Forty Mineral Tonnes Au Ag Cu Zn Resources (millions) (g/t) (g/t) (%) (%) M&I 8.5 2.1 30.6 0.5 5.6 Back Forty Deposit (NW of Stephenson, MI) Inferred 1.2 2.9 41.7 0.2 4.4 • Joint venture with rights to earn up to a 75% interest • Advanced exploration-stage VMS
Slide 19: The Fenix Nickel Deposit - Overview
The Fenix Nickel Deposit - Overview Tonnes Ni Fenix Mineral Resources (millions) (%) M&I 36.2 1.92 Inferred 9.7 1.80 • Brownfield mine and smelting facility with proven process technology Fenix • ~50 million lbs of annual nickel production • Multi-decade mine life with upside potential • Low technic
Slide 20: Focused Acquisition Strategy
Focused Acquisition Strategy • Expanded management capacity to consider development stage opportunities • Focus on the Americas but will consider other mining favourable jurisdictions • Seeking VMS or porphyry deposits • Target transaction size of between 10 – 20% of market cap • Strategic partnersh
Slide 21: Flin Flon Greenstone Belt Exploration
Flin Flon Greenstone Belt • Outstanding record of success $20 million • Developed 26 mines over past 83 years • Land package totaling > 400,000 hectares Lalor $8 million • Devoted to further exploration Mines in Manitoba & outside the Province $14 million • • Invested in brownfield exploration Explo
Slide 22: Historical Context
Historical Context Growth of mineral deposits: Discoveries in the Greenstone Belt Flin Flon Trout Lake ⁄⁄ 62.5 777 Lalor Stall Lake Chisel U/G Callinan Chisel Osborne Anderson Konuto Spruce Schist Lake Centennial Westarm Chisel Pit Coronation Initial resource White Lake Dickstone Added resource Rod
Slide 23: Near term milestones
Near term milestones • Ongoing exploration at Lalor and various JV properties • NI 43-101 resource estimate at Reed Lake in early 2011; production decision to follow • Fenix feasibility study by year end 2010 results • New drilling program, updated resource estimate in late 2010 and environmental ap
Slide 24: Investment Highlights
Investment Highlights • Operational Excellence • Financial Strength • Growth Potential • Management Strengthened • NYSE Listing and Inaugural Dividend 24 September 2010
Slide 25: Appendix
HUDBAY MINERALS Strength to Build the Future APPENDIX 25 September 2010
Slide 26: Appendix Contents
Appendix Contents • Lalor mineralization and copper-gold drill intersections • Reserves and Resources 26 September 2010
Slide 27: Lalor Mineralization
Lalor Mineralization Tonnes Au Ag Cu Zn (millions) (g/t) (g/t) (%) (%) Base Metal Zone Mineral Resource Indicated 13.3 1.6 24.9 0.66 8.87 Inferred 4.8 1.3 26.2 0.58 9.25 Gold Zone Inferred Mineral Resource Inferred 5.4 4.7 30.6 0.47 0.46 Potential Gold Zone Conceptual Estimate 5.1 – 6.1 4.3 – 5.1 23
Slide 28: Lalor Copper-Gold Drill Intersections
Lalor Copper-Gold Drill Intersections HOLE From To Core East North Depth Au g/t Ag g/t Cu% Zn% Length meters meters meters meters(1) DUB252W01 1140.00 1149.12 9.12 2110 5604 -1128 12.54 26.67 3.69 0.18 and DUB252W01 1176.00 1189.39 13.39 2102 5607 -1166 8.08 15.33 1.60 0.12 DUB263W02 1253.08 1287.62
Slide 29: Lalor Cu-Au Zone — Plan View
428 ONE DuB270_ 4.81m * 7.01 git Au £21.13 git Ag + 4,83 % Cu 0.23 %Zn Tre ammspne — A270DVE azvpne 4 aaioye 4272008 5181300 H eosleton * DUB245W01 Previously feleased: Feb. 22,|2010 DUB269 -/No notable Cu mineralization a) srartorn of ) | * DUB265 — No|Notable mineralization. _ DUn2howe2—\8-17ns DU
Slide 30: September 2010
6062000 I 6061500N 6061000N I 6060500 N 427000 427500 420008 —J 427000 E 427500 E 420000 6062000 N 60eisn0N 606] 000 N 6080500 N
Slide 31: Estimated Mineral Reserves – January 1, 2010
Estimated Mineral Reserves – January 1, 2010 Mine Tonnes Au (g/t) Ag (g/t) Cu% Zn (%) 777 Proven 4,492,000 2.12 25.92 3.23 3.76 Probable 9,061,600 2.05 30.18 1.94 4.88 Trout Lake Proven 701,500 1.06 11.97 2.10 3.10 Probable 292,400 1.31 4.57 2.29 2.16 Chisel North Proven 276,500 - - - 8.64 Probable
Slide 32: Estimated Inferred Mineral Resources – January 1, 2010
Estimated Inferred Mineral Resources – January 1, 2010 Mine Tonnes Au (g/t) Ag (g/t) Cu% Zn (%) 777 1,413,400 1.8 30.9 1.1 4.7 Trout Lake 108,700 0.8 3.1 2.4 0.8 Chisel North 62,900 - - - 7.7 Total 1,585,000 Please refer to HudBay’s Annual Information Form and Management’s Discussion and Analysis fo
Slide 33: Reserves and Resources – HudBay Minerals
Reserves and Resources – HudBay Minerals • To estimate mineral reserves, measured and indicated mineral resources were first estimated by a 12-step process, which includes determination of the integrity and validation of the data collected, including confirmation of specific gravity, assay results a
Slide 34: The Back Forty Project – Mineral Resources January 12, 2009
The Back Forty Project – Mineral Resources January 12, 2009 Source: Aquila Resources Inc. (“Aquila”) Mineral Resource Statement(1) for the Back Forty Deposit, Michigan, U.S.A., SRK Consulting, January 12, 2009, as set forth in Aquila’s January 15, 2009 press release entitled “Aquila provides updated
Slide 35: Strength to Build the Future
Strength to Build the Future For more information contact: John Vincic, VP of Investor Relations and Corporate Communications Tel: 416.362.0615 Email: john.vincic@hudbayminerals.com
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