Hudbay Minerals Inc · TSX:HBM
Hudbay Minerals — RBC Global Mining and Materials Conference 2009
33 slides from Hudbay Minerals's conference presentation, Jun 9, 2009
Slide 1: Strength to Build the Future
Strength to Build the Future Peter R. Jones – Chief Executive Officer RBC Global Mining and Materials Conference – June 9, 2009
Slide 2: Forward-Looking Statements
Forward-Looking Statements All monetary amounts in Canadian dollars unless otherwise noted. This presentation contains “forward-looking information”, within the meaning of applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, information with respec
Slide 3: Investment Highlights
Investment Highlights • Renewed commitment to high standards of corporate governance. • A treasury with C$610 million in cash as at March 31, 2009 (before sale of stake in Lundin Mining Corporation). • Solid operating asset base. • Organic growth opportunities: – Domestically at Lalor in Manitoba; a
Slide 4: Building on a proud 80-year legacy
Building on a proud 80-year legacy • In continuous production for more than 80 years; profitably developed more than 25 mines • Fully integrated producer of base and precious metals • TSX: HBM • 153 million common shares outstanding • Current share price ~ C$8.00 • 12-month high C$18.07, low C$2.70
Slide 5: Committed. Sustainable. Responsible.
Committed. Sustainable. Responsible. • Winner of 2008 Manitoba Outstanding Large Business and sustainability awards • Five years of CSR reporting • Substantial contributions to community initiatives in Manitoba and Guatemala • Lost time accident rate 1.0 per 200,000 hours worked, a favourable compar
Slide 6: Adopting renewed corporate governance
Adopting renewed corporate governance • Proposed change to HudBay’s by-laws will require shareholder approval before issuing common shares in excess of 25% of those outstanding to make an acquisition. • Directors to have new meaningful share ownership guidelines; similar guidelines for executive off
Slide 7: Key financial results
Key financial results Three months Year ended ended March 31, 2009 2008 (C$000s except cash cost per pound) Total revenue 161,784 981,894 Net earnings (3,958) 73,353 EBITDA 15,493 292,249 Cash cost per pound of zinc sold net of by-product credits US $0.32 US $(0.24) EBITDA and cash cost per pound of
Slide 8: Strong cash position
Strong cash position As at March 31, 2009 December 31, 2009 (C$000s) Total assets 1,940,577 1,918,353 Shareholders’ equity 1,623,259 1,558,700 Cash and cash equivalents 609,829 704,668 • Cash and cash equivalents does not include proceeds from the recent sale of HudBay’s 16.7 per cent stake in Lundi
Slide 9: Solid production results
Solid production results Production Three months ended Year ended Guidance for March 31, 2009 2008 2009 Zinc (000 tonnes) 25.6 125.3 75 to 90 Copper (000 tonnes) 16.2 74.7 45 to 55 Gold (000 troy ounces) 21.3 108.5 80 to 95 Silver (000 troy ounces) 564.9 2,294.0 850 to 950 9 RBC Global Mining and Ma
Slide 10: Reserves to fuel production to ~ 2019
Reserves to fuel production to ~ 2019 Mine Tonnes Au (g/t) Ag (g/t) Cu (%) Zn (%) 777 Proven 4,392,700 2.4 27.0 3.2 4.1 Probable 10,039,800 2.3 30.2 2.1 4.8 Trout Lake Proven 1,094,700 1.1 11.8 1.8 3.8 Probable 532,900 2.2 10.5 2.6 3.2 Chisel North Proven 284,300 - - - 8.7 Probable 208,100 - - - 8.9
Slide 11: HudBay's flagship mine: 777
HudBay’s flagship mine: 777 • Located in Flin Flon, Manitoba • Estimated life of mine ~ 2019 • Produces zinc, copper, gold and silver • Produced 1,470,290 tonnes of ore for year ended December 31, 2008 • C$39.05 operating cost per tonne for the year ended December 31, 2008 11 RBC Global Mining and M
Slide 12: In production for more than 25 years: Trout Lake
In production for more than 25 years: Trout Lake • Located in Flin Flon, Manitoba • Estimated life of mine ~ 2011 • Produces zinc, copper, gold and silver • Produced 776,205 tonnes of ore for year ended December 31, 2008 • C$50.58 operating cost per tonne for the year ended December 31, 2008 12 RBC
Slide 13: Chisel to reopen when sustainable zinc prices return
Chisel to reopen when sustainable zinc prices return • Zinc producer located in Snow Lake, Manitoba • Produced 325,156 tonnes of ore for year ended December 31, 2008 • C$68.05 operating cost per tonne for the year ended December 31, 2008 • Chisel North mine and Snow Lake concentrator to reopen upon
Slide 14: An integrated metallurgical complex
An integrated metallurgical complex Flin Flon Concentrator Flin Flon Copper Smelter, Flin Flon Zinc Plant White Pine (WP) refinery • Zinc and copper concentrate • Modern plant • C38.1¢/lb copper cost at • 2,255,918 tonnes of ore at • Uses leading-edge smelter; US7.4¢/lb copper C$10.16/tonne technolo
Slide 15: Difficult decisions in response to low metal prices
Difficult decisions in response to low metal prices • Chisel North Mine & Snow Lake Concentrator suspended in early 2008. Suspension continually under review. • Fenix Project construction suspended in November 2008; focus is on developing low cost power solution and maintaining community relations.
Slide 16: Growing domestically: The Lalor deposit
Growing domestically: The Lalor deposit • 100% owned volcanic massive sulphide deposit located in Snow Lake, Manitoba. • Base metals NI 43-101 dated September 19, 2008. • Six drills have completed ~ 154,000 metres of diamond drilling in 146 holes to date. • Recent discovery of new gold mineralizatio
Slide 17: Lalor is in prolific Flin Flon Greenstone Belt
Lalor is in prolific Flin Flon Greenstone Belt 17 RBC Global Mining and Materials Conference – June 9, 2009
Slide 18: Lalor is 15 km from concentrator, 3 km from road
Lalor is 15 km from concentrator, 3 km from road 18 RBC Global Mining and Materials Conference – June 9, 2009
Slide 19: Lalor deposit: NI 43-101 Resource Estimate
Lalor deposit: NI 43-101 Resource Estimate Tonnes Au Ag Cu Zinc (millions) (g/t) (g/t) (%) (%) Indicated 3.4 1.9 20.5 0.71 8.82 Inferred 13.2 2.9 34.1 0.70 8.19 • NI 43-101 Resource Estimate dated September 19, 2008. • Estimate excludes separate gold zone. 19 RBC Global Mining and Materials Conferen
Slide 20: Exploring separate gold zone – notable intersections
Exploring separate gold zone – notable intersections Drill Hole Zone From (m) To (m) Length (m) Au (g/t) Ag (g/t) Cu (%) Zn (%) DUB 204W03 Not named 981.56 1006.00 24.44 6.68 52.54 0.21 0.43 DUB 230 Separate 855.25 864.00 8.75 23.11 91.28 1.15 0.81 DUB 234 Foot wall 866.50 879.50 13.00 10.28 45.08 1
Slide 21: Lalor deposit sectional view looking west
Lalor deposit sectional view looking west Legend • Sectional view looking west Zone 10 Zone 11 +15° Zone 20 Zone 30 Zone 31 • Rotation of base metal and Zone 40 gold zones Contact Gold to Zone 20 FW Gold • Zones of gold mineralization are a preliminary interpretation as at January 2009 • Gold zones
Slide 22: Lalor: next steps
Lalor: next steps • HudBay will spend $13 million on exploration at Lalor in 2009. • Ongoing 2009 program to focus on extensions to separate gold zone, and the continuity of the zone. • Scoping studies currently underway are expected to identify access and development alternatives. • Lalor has the p
Slide 23: Growing internationally: The Fenix nickel deposit
Growing internationally: The Fenix nickel deposit • Acquired in August 2008 for C$460 million • Brownfield pyrometallurgical facility • Fenix Nickel Project contains 41.4 million tonnes of saprolite reserves; 30 year mine life • Approximately 50 million pounds of nickel per year in first five years
Slide 24: Fenix: current status
Fenix: current status • Construction suspended in November 2008 due to world recession • Focusing on community relations, including upgrading the road from Rio Dulce to El Estor • Environmental and construction permits for the brownfield expansion project have been received • Basic engineering compl
Slide 25: Fenix: next steps
Fenix: next steps • Studies planned on identifying low cost power supply • Continue reaching out to the community in Guatemala • Project under continuous evaluation for re-initiation 25 RBC Global Mining and Materials Conference – June 9, 2009
Slide 26: Investment Highlights
Investment Highlights • Renewed commitment to high standards of corporate governance. • A treasury with C$610 million in cash as at March 31, 2009 (before sale of stake in Lundin Mining Corporation). • Solid operating asset base. • Organic growth opportunities: – Domestically at Lalor in Manitoba; a
Slide 27: APPENDIX
APPENDIX Reserves and Resources Estimated Mineral Reserves – January 1, 2009 Estimated Inferred Mineral Resources – January 1, 2009 Pre-development Properties – January 1, 2009 Lalor – Mineral Resources Fenix Nickel Project – Saprolite Mineral Resource Estimates – all deposits (exclusive of Mineral
Slide 28: Estimated Mineral Reserves – January 1, 2009
Estimated Mineral Reserves – January 1, 2009 Mine Tonnes Au (g/t) Ag (g/t) Cu% Zn (%) 777 Proven 4,392,700 2.4 27.0 3.2 4.1 Probable 10,039,800 2.3 30.2 2.1 4.8 Trout Lake Proven 1,094,700 1.1 11.8 1.8 3.8 Probable 532,900 2.2 10.5 2.6 3.2 Chisel North Proven 284,300 - - - 8.7 Probable 208,100 - - -
Slide 29: Estimated Inferred Mineral Resources – January 1, 2009
Estimated Inferred Mineral Resources – January 1, 2009 Mine Tonnes Au (g/t) Ag (g/t) Cu% Zn (%) 777 1.551,300 1.7 25.0 1.2 4.0 Trout Lake 178,300 1.2 3.8 2.8 1.4 Chisel North 60,500 - - - 7.8 Total 1,790,100 Please refer to HudBay’s Annual Information Form for the year ended December 31, 2007 and ap
Slide 30: Pre-development properties: Estimated Mineral Resources – January 1, 2009
Pre-development properties: Estimated Mineral Resources – January 1, 2009 Property Tonnes Au (g/t) Ag (g/t) Cu (%) Zn (%) Pb (%) Tom Indicated 4,980,000 - 47.8 - 6.6 4.4 Inferred 13,550,000 - 31.8 - 6.7 3.1 Jason Indicated 1,460,000 - 86.7 - 5.3 7.4 Inferred 11,000,000 - 36.4 - 6.8 4.0 Watts River I
Slide 31: 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 and
Slide 32: Lalor – Mineral Resources
Lalor – Mineral Resources Tonnes Au Ag Cu Zn (millions) (g/t) (g/t) (%) (%) Indicated 3.4 1.9 20.5 0.71 8.82 Inferred 13.2 2.9 34.1 0.70 8.19 Notes: 1. CIM Definitions were followed for the estimation of Mineral Resources. 2. Mineral Resources are estimated at a zinc equivalency (ZNEQ) cut-off of 4%
Slide 33: Reserves and Resources – HudBay Minerals
Reserves and Resources – HudBay Minerals Saprolite Mineral Resource Estimates for Fenix – February 13, 2008 Category Cut-off (Ni %) Quantity (mm tonnes) Ni (%) Measured 1.60 8.7 1.79 Indicated 1.25 and 1.60 35.2 1.75 Measured & Indicated 1.25 and 1.60 43.9 1.76 Inferred 1.00, 1.25 and 1.60 70.3 1.59
HudBay Minerals — RBC Global Mining and Materials Conference 2009 on 6ix