Slide 1: According to Plan
ACCORDING TO PLAN INVESTOR PRESENTATION March 2014 HBM
Slide 2: Cautionary Information
Cautionary Information Forward Looking Information This presentation contains “forward-looking statements” and “forward-looking information” (collectively, “forward-looking information”) within the meaning of applicable Canadian and United States securities legislation. All information contained in
Slide 3: Cautionary Information (continued)
Cautionary Information (continued) Information Concerning Augusta Except as otherwise expressly indicated herein, the information concerning Augusta contained in this presentation has been taken from and is based solely upon Augusta's public disclosure on file with the relevant securities regulatory
Slide 4: Cautionary Information (continued)
Cautionary Information (continued) The scientific and technical information in respect of Hudbay contained in this presentation related to the Constancia project has been prepared by or under the supervision of Cashel Meagher, P.Geo., Hudbay’s Vice President, South America Business Unit. The scienti
Slide 5: About Hudbay
About Hudbay TSX, NYSE, BVL Symbol HBM Integrated base and precious metals mining Market Capitalization1 $1.8 billion company that became publicly traded in 2004 Shares Outstanding 193 million Operating mines, development projects and processing Available Liquidity $1.4 billion facilities located
Slide 6: 2014: Year of Growth and New Opportunities
2014: Year of Growth and New Opportunities ON TRACK TO ACHIEVE OUR GROWTH OBJECTIVES IN 2014 777 • Stable and steady low-cost production Production Reed • Commercial production expected in Q2 2014 • Production rate to double in H2 2014 from main Lalor shaft and refurbished concentrator • Underground
Slide 7: Proposed Acquisition of Augusta
Proposed Acquisition of Augusta COMPELLING VALUE PROPOSITION FOR ALL SHAREHOLDERS • 0.315 of a Hudbay share per Augusta share, representing total consideration of C$2.96 per share1 Offer • Total enterprise value of approximately C$540 million2 Summary • 62% premium to Augusta’s 20-day volume weighte
Slide 8: Rosemont Project
Rosemont Project ADVANCED PERMITTING Augusta ownership 80%1 Initial capital expenditures2 US$1.2 billion Located in Arizona – the 6th largest copper Daily ore throughput2 75k to 90k tpd producing region globally Avg. annual Cu production (LOM)1,3 110k tonnes Open pit project producing copper and
Slide 9: Production, Reserve and Resource Growth
Production, Reserve and Resource Growth1 SIGNIFICANT PRODUCTION GROWTH SUPPORTED BY LARGE RESERVE BASE Copper Production Growth Copper Reserve and Resource Growth2 350 (mm tonnes Cu) 300 1.0 250 Copper Production (kt Cu) 1.6 200 +106% in P+P 150 0.6 Reserves +570% 1.0 100 4.1 50 2.0 0 2013A 2014E 20
Slide 10: Global Positioning on 2018E Cash Costs
Net Cash Costs (US$/lb Cu) Copper Production (bn lbs) $0.00 $1.00 $1.50 $2.50 $0.50 $2.00 0.0 4.0 1.0 2.0 3.0 Southern Cu Freeport Chinalco Source: Wood Mackenzie Codelco Russian Cu Glencore Hudbay (2018) BHP Hudbay (2018) PF First Quantum Private Southern Cu MMG Rio Tinto Jiangxi Cu KGHM OZ Mineral
Slide 11: Constancia Project
Constancia Project ADVANCED DEVELOPMENT Life of Mine1 Ownership 100% Over US$1.3 billion of US$1.7 billion budget Daily ore throughput 80k tpd spent and committed with Avg. annual Cu production2 90k tonnes 56% completion at end of Cash cost per Cu lb3 US$1.19/lb Q4 2013 Mine and mill unit cost4 US
Slide 12: Constancia Progress Photos
Constancia Progress Photos Constancia bog dam Location of power substation for incoming electricity Constancia plant site overview Primary crusher and crushed ore stockpile withdrawal tunnels INVESTOR PRESENTATION l 12
Slide 13: Constancia Progress Photos (continued)
Constancia Progress Photos (continued) Constancia flotation cells View of Constancia mill Hitachi shovels on site Mine fleet assembly INVESTOR PRESENTATION l 13
Slide 14: 777 Mine
777 Mine CONSISTENT PRODUCER WITH LOWEST DECILE CASH COSTS Life of Mine1 Underground exploration program underway Ownership 100% with the objective of extending the mine life Daily ore throughput 4,500 tpd Avg. Annual Cu production2 25k tonnes 1,620 1,600 1,540 1,529 $50 Avg. Annual Zn production2
Slide 15: Lalor Mine
Lalor Mine PRODUCTION; PHASE 2 RAMP-UP Life of Mine2 Ownership 100% $410 million of overall $441 million1 Daily ore throughput 3,300 tpd capital budget invested to Dec. 31, Avg. annual Zn production3 59k tonnes 2013 Avg. annual Au-Eq. production3 43k ounces Avg. annual Cu production3 5k tonnes P
Slide 16: Lalor Cross-Section
Lalor Cross-Section UNDERGROUND EXPLORATION TO BEGIN IN LATE 2014 Surface 0m Production shaft Vent raise 500m 750m 2014 Exploration platform 1000m Base Metal Resource Gold & Copper-Gold Resource High Grade Intercepts Completed infrastructure 1500m and development Looking 0m 250m N70oW INVESTOR PRESE
Slide 17: Reed Mine
Reed Mine PRODUCTION RAMP-UP Life of Mine1 Ownership 70% Initial production began in September Daily ore throughput 1,300 tpd 2013 Avg. annual Cu production2 15k tonnes Cash cost per lb Cu3 $1.64/lb $67 million invested and committed of Mine and mill unit cost3 $89.90/tonne overall $72 million c
Slide 18: Strong Financial Capacity
Strong Financial Capacity WELL CAPITALIZED TO COMPLETE CONSTANCIA CONSTRUCTION AND ADVANCE ROSEMONT Hudbay Liquidity 1 Sufficient financial capacity to fund remaining capital spending Total Current Liquidity of $1.4 billion at Constancia, Lalor, and Reed $250 Available Credit Additional $150 mil
Slide 19: Near Term Milestones
Near Term Milestones Reed Lalor Constancia Commercial Production shaft Commercial production commissioning production 2014 2015 Q1 Q2 Q3 Q4 Q1 Q2 Rosemont Lalor Constancia Expiry of Completion of Initial Augusta Offer refurbished Snow production Lake Concentrator Note: All timelines are estimates IN
Slide 20: Why Hudbay?
Why Hudbay? DISCIPLINED GROWTH STRATEGY Mining friendly jurisdictions in the Americas VMS and porphyry deposits Grow net asset value, earnings and cash flow per share Leverage operating, development and exploration expertise Seeking development stage assets with exploration upside INVESTOR PRESENTAT
Slide 21: Appendix
Appendix INVESTOR PRESENTATION l 21
Slide 22: Appendix Contents
Appendix Contents By-product copper and zinc cost curves Additional capital required by 2020 as a % of market value 2014 guidance Constancia additional details Lalor additional details Precious metals stream Reserves and resources INVESTOR PRESENTATION l 22
Slide 23: 2013 Copper & Zinc By-Product Cost Curves
2013 Copper & Zinc By-Product Cost Curves1 250 Constancia (LOM) 200 C1 Cash Cost (100 x US$/lb) 150 100 Reed (LOM) 777 Mine (2013) 50 0 0 10 20 30 40 50 60 70 80 90 100 -50 Cumulative Percentile Production (%) -100 Lalor (LOM) -150 777 Mine (LOM) -200 -250 Cu Cash Cost Zn Cash Cost Source: Wood Mack
Slide 24: Additional Capital Required by 2020 as a % of Market Value
Additional Capital Required by 2020 as a % of Market Value 35% 30% $59 billion $13 billion 25% $43 billion $23 billion 20% $9.4 billion 15% $15 billion 10% $6 billion 5% $3 billion $1 billion 0% Copper Iron ore Coal - Therm Aluminum Zinc Coal - Met Nickel Gold Lead Source: Wood Mackenzie, Metals Mar
Slide 25: 2014 Guidance
2014 Guidance Manitoba contained metal in concentrate Guidance Year Ended Guidance 2014 Dec. 31, 2013 2013 Copper1 tonnes 41,000 – 55,000 29,930 33–38,000 Zinc1 tonnes 87,000 – 105,000 86,527 85–100,000 Precious Metals1 troy oz. 101,000 – 123,000 91,258 85–105,000 1 Includes 100% of Reed mine produc
Slide 26: 2014 Capital Expenditures Forecast
2014 Capital Expenditures Forecast C$ Millions Growth Lalor 60 Constancia 678 Reed 9 Capitalized Interest and Other 110 Total Growth Capital 857 Sustaining 110 Total Capital Expenditures 967 INVESTOR PRESENTATION l 26
Slide 27: 2014 Exploration Expenditures Budget
2014 Exploration Expenditures Budget C$ Millions Manitoba 15.8 Peru 2.1 Other 2.5 Total Exploration Expenditures 20.4 Manitoba Capitalized Spending (10.6) Total Exploration Expense 9.8 INVESTOR PRESENTATION l 27
Slide 28: 2014 Zinc Plant Guidance
2014 Zinc Plant Guidance Flin Flon Zinc Plant Zinc concentrate treated 195,000 – 225,000 tonnes Recovery 97% Unit Operating Costs1 C$0.30 - $0.37/lb 1 Forecast unit operating costs are calculated on the same basis as reported unit operating costs in Hudbay’s quarterly and annual management’s discuss
Slide 29: Constancia - Access to Existing Infrastructure
Constancia - Access to Existing Infrastructure 83km access road from Yauri To be upgraded for concentrate haulage post commissioning Tintaya power substation 70km away Construction of power transmission line from Tintaya underway 100% of ROW agreements secured, 61% complete as of January 31, 2
Slide 30: Constancia – Site Plan and Layout
Constancia – Site Plan and Layout INVESTOR PRESENTATION l 30
Slide 31: Constancia - Current Schedule
Constancia - Current Schedule 2011 2012 2013 2014 2015 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Permitting Mine Permit Front End Engineering Design Construction Camp Procurement Community Agreements Board Approval Power Line TMF and WRF Plant Commercial Commissioning and Ramp Up P
Slide 32: Constancia - Regional Exploration Potential
Constancia - Regional Exploration Potential Helicopter Magnetic/Radiometrics Survey Survey outline with geology, claims (Hudbay in green), and significant deposits Commodity Focus: Cu, Au, & Mo Brown and tan areas represent overburden (i.e. underexplored areas) Survey cost ~$800K, (85km x 40
Slide 33: Lalor Mine - Schedule
Lalor Mine - Schedule 2009 2010 2011 2012 2013 2014 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Permitting Engineering Procurement Surface Construction Underground Development Underground Construction and Electrical Installations Production Shaft Excavation and Shaft Stat
Slide 34: Precious Metals Stream Overview
Precious Metals Stream Overview US$750 million in upfront deposit payments from Silver Wheaton for delivery of: 100% of payable gold and silver from 777 mine until the end of 2016; and 50% of payable gold and 100% of payable silver thereafter for the remainder of life of mine 100% of payable s
Slide 35: Peru Reserves Overview
Peru Reserves Overview As at August 8, 2012 Constancia Mineral Reserves Category Ore (M tonnes) Cu (%) Mo (g/t) Au (g/t) Ag (g/t) Proven 349 0.37 100 0.043 3.29 Probable 54 0.24 60 0.035 2.98 Pampacancha Mineral Reserves Category Ore (M tonnes) Cu (%) Mo (g/t) Au (g/t) Ag (g/t) Proven 10 0.54 170 0.
Slide 36: Peru Resources Overview
Peru Resources Overview As at August 8, 2012 Constancia Mineral Resources Category M (tonnes) Cu (%) Mo (g/t) Au (g/t) Ag (g/t) Measured 119 0.23 62 0.038 2.3 Indicated 344 0.20 58 0.034 2.0 Inferred 219 0.19 49 0.032 1.8 Pampacancha Mineral Resources Category M (tonnes) Cu (%) Mo (g/t) Au (g/t) Ag
Slide 37: Manitoba Mineral Reserves
Manitoba Mineral Reserves As at January 1, 2013 Category Tonnes Cu (%) Zn (%) Au (g/t) Ag (g/t) 7771 Proven 4,959,000 2.37 4.05 1.95 27.31 Probable 6,448,000 1. 84 4.40 1.79 28.49 Lalor – Base Metal Proven 57,000 0.48 12.40 0.63 15.52 Probable 13,147,000 0.67 8.15 1.59 23.62 Lalor – Gold Zone Probab
Slide 38: Manitoba Mineral Resources
Manitoba Mineral Resources As at September 30, 2012 Category Tonnes Cu (%) Zn (%) Au (g/t) Ag (g/t) 7771 Inferred 782,000 1.06 4.43 1.75 31.15 Lalor – Base Metal Inferred 3,191,000 0.62 8.83 1.24 23.07 Lalor – Gold Zone Inferred 7,338,000 0.41 0.32 4.63 31.32 Lalor – Copper Gold Zone Inferred 1,461,
Slide 39: Reed Copper Project
Reed Copper Project1 Mineral Reserves as at March 30, 2012 Mineral Resources as at March 15, 2011 Category Tonnes Cu (%) Zn (%) Au (g/t) Ag (g/t) Probable 2,157,000 3.83 0.59 0.48 6.02 Inferred 170,000 4.26 0.52 0.38 4.55 1 Hudbay holds a 70% joint venture interest in the Reed copper project INVESTO
Slide 40: Copper Equivalent Reserves and Resources
Copper Equivalent Reserves and Resources All Metals Project Category Cu Equivalent (000 tonnes) 2013 2012 Change Constancia Proven & Probable 1,886 1,911 (25) Measured & Indicated 1,329 - 1,329 Inferred 566 75 491 Pampacancha Proven & Probable 377 - 377 Measured & Indicated - 381 (381) Inferred 27 -
Slide 41: Precious Metal Equivalent Reserves and Resources
Precious Metal Equivalent Reserves and Resources1 Project Category Au Equivalent (000 ounces) 2013 2012 Change Constancia2 Proven & Probable 1,385 1,389 (4) Measured & Indicated 1,132 - 1,132 Inferred 477 77 400 Pampacancha Proven & Probable 566 - 566 Measured & Indicated - 635 (635) Inferred 43 - 4
Slide 42: Additional Information
Additional Information Overall copper equivalent reserves and resources and precious metal equivalent reserves and resources are in-situ contained metal based on estimated reserves and resources at Hudbay’s Constancia, Pampacancha, 777, Lalor and Reed properties. Copper equivalent metal for 2013 c
Slide 43: Peru
Peru For additional details relating to the estimates of mineral reserves and resources at the Constancia project, including data verification and quality assurance/quality control processes refer to “The Constancia Project, National Instrument 43-101 Technical Report” as filed on SEDAR by Hudbay
Slide 44: Reed
Reed The weighted average (based on planned production tonnage) used in the Reed pre-feasibility study for mineral reserve estimation for copper was US$2.95 per pound, the gold price was US$1,269.09 per ounce and the silver price was US$24.78 per ounce using an exchange rate of 1.034 C$/US$. INVES
Slide 45: For more information contact
Constancia primary crusher For more information contact: Candace Brûlé Director, Investor Relations Tel: 416.814.4387 Email: candace.brule@hudbayminerals.com HBM