Hudbay Minerals Inc · TSX:HBM
Hudbay Minerals — Corporate Update (April 2012)
30 slides from Hudbay Minerals's corporate update, Apr 2, 2012
Slide 1: Creating Sustainable Value Through High Quality Long Life Deposits
HBM Creating Sustainable Value Through High Quality Long Life Deposits Reserves & Resources and Constancia Project Update Conference Call, April 2, 2012
Slide 2: Forward Looking Information
Forward Looking Information This presentation contains “forward-looking information” within the meaning of applicable Canadian and United States securities legislation. Forward-looking information includes, but is not limited to, information with respect to changes to the scope of our Constancia pro
Slide 3: Lalor Project Disclaimer
Lalor Project Disclaimer 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 classified as a
Slide 4: Delivering Leverage Through Reserve Growth
Delivering Leverage Through Reserve Growth Exploration E l ti success iincreased d allll categories t i off reserves and resources Cu equivalent Au equivalent (000 tonnes) t ) (000 oz)) 2630 1687 68 1550 1921 932 1615 713 1083 1286 934 3071 3219 1457 3485 1121 2962 791 1153 (1,3) (2,3) (4) (1 3) (1,
Slide 5: Growing Mineral Reserves and Resources on a Per Share Basis
Growing Mineral Reserves and Resources on a Per P Share Sh B Basis i Commodity Exposure (1,2) Cu Eq / share (lb C Cu / sh) h) Mo Pb 4% 6% 21.6 19.8 Cu 40% 11.9 Au Eq. 9.1 24% 18.4 16.1 39.2 41.3 Copper 11 3 11.3 Zinc Zn 26% Gold equivalent 2010 2011 2012 Lead Molybdenum Proven & Probable Measured &
Slide 6: Main Drivers of Growth
Main Drivers of Growth Lalor • Additional reserves and resources Pampacancha • Initial resource of 51.2 51 2 million tonnes with a copper equivalent grade of 0.74% • Expect to incorporate into Constancia mine p plan by y the time of formal p project j decision • Pampacancha resource includes conside
Slide 7: Constancia
Constancia O i i i and Optimization d ffront-end d engineering i i wellll advanced d d • Pampacancha exploration success speaks to potential of region • Example of adding value through the drill bit post-acquisition 7
Slide 8: 2012 Exploration Priorities
2012 Exploration Priorities Manitoba • Surface exploration drill program at Lalor • Underground drilling at Lalor • $31 million allocated toward exploration efforts in Flin Flon Greenstone Belt Peru • 30,000 metre drill program planned • Two drills to resume at Pampacancha, Pampacancha which remains
Slide 9: Reserves & Resources
Reserves & Resources O ti i ti efforts Optimization ff t captured t d during d i ffront-end t d engineering i i phase h Constancia Mt Cu ((%)) Au (g (g/t)) Ag g (g (g/t)) Mo ((%)) CuEq q ((%)) Reserves Proven 195,000 0.42 0.04 3.49 0.0117 0.54 Probable 177,000 0.37 0.05 3.66 0.0092 0.49 Total 372,00
Slide 10: Constancia Project – Strategic Location
Constancia Project – Strategic Location C ti new mining Creating i i camp within ithi an established t bli h d di district ti t Cusco CONSTANCIA PROJECT LOCATION MAP PERU Xstrata – Las Bambas First Quantum – Haquira Trujillo APURIMAC Constancia Project CUSCO DEPT. Pan Pacific – Quechua Lima Cusco PU
Slide 11: Regional Infrastructure
Regional Infrastructure CUSCO • 83km access road from Yauri • T To be b upgraded d d ffor concentrate t t haulage • Tintaya power substation 70km away • Planned upgrade to 220 kV to be commissioned by April 2013 • Rail-head at Imata 150km away INFRASTRUCTURE & POWER EXPECTED TO BE AVAILABLE TO MEET
Slide 12: Infrastructure – Port
Infrastructure – Port • Constancia is ~475km from Matarani Port by road road, already more than half paved • Infrastructure upgrades accounted for within project estimate • Matarani Port located 120km from Arequipa by paved highway • The pport is a deep p sea p port managed g byy a private group • U
Slide 13: Infrastructure – Water
Infrastructure – Water • Sufficient water supply expected • R Reservoir i tto b be constructed t t d • Impounding and storing water in tailings management facility • Tailings facility improved upon by re-circulating water back into the process • Completing hydro-geological studies for accurate asses
Slide 14: Ore Types
Ore Types E l years off expected Early t d mine i life lif will ill b be hi higher h grade d 14
Slide 15: Higher Grade Pampacancha Resource to be Incorporated Into New Mine Plan
Higher Grade Pampacancha Resource to be Incorporated Into New Mine Plan Looking to the North Sector 1 Section N8397050 15
Slide 16: Simplified Flowsheet
Simplified Flowsheet Pebble Crushers Primary Crusher Primary Cyclones SAG Mills Ball Mills Coarse Ore Stockpile Tailing Thickener Copper Roughers Regrind Cyclones Regrind IsaMill Mo Flotation Circuit Copper Thickening & Filtration Molybdenum Thickening & Filtration 16
Slide 17: Project Optimization Provides Higher Throughput
Project Optimization Provides Higher Throughput • Twin SAG grinding mills provide additional grinding capacity • Additional Additi l value l engineering i i efforts ff t focused f d on camp accommodations, water management and tailings impoundment 17
Slide 18: Constancia Capital Cost Estimate of US $1.5 Billion
Constancia Capital Cost Estimate of US $1.5 Billion Contingency 12% Infrastructure 26% Indirects 18% Mine Plant 19% 25% 18
Slide 19: Significant Procurement Progress
Significant Procurement Progress • Fixed price orders have been placed for over US$200 million in project expenditures for: • Shovels • Trucks • Mills • Primary crusher • Float Cells • Thickeners • Filters KEY CONSTRUCTION PERMITS ON TRACK 19
Slide 20: Peru Project Team
Peru Project Team Lima site Cashel Meagher Other or offsite General Manager Terry B. Linde Project Director Senior Project j Mine Tech Offsite and Procurement & Process Plant Engineering Project Manager Project Controls Manager – Early Services Infrastructure Contracts Manager Manager Superintendent
Slide 21: Key Services Providers
Key Services Providers HEAVY CIVIL PROCESS & RELATED MINE WORKS FACILITIES Engineering KP AUS TWP Procurement AUS AUS SGyM Construction Mgt AUS AUS SGyM Construction SGyM Pending SGyM Key Suppliers AUS A AUS-Ausenco KP K i ht Piesold KP-Knight Pi ld TWP-TWP Holdings (Pty) Ltd SGyM-Stracon GyM 21
Slide 22: Project De-Risking with Experienced Partners
Project De-Risking with Experienced Partners Stracon GyM Approx. Manning By Country • Currently operating in Peru • Experienced in mining and major earth works Australia Canada • Established labour force and operating team 2% 1% • Experienced procurement and maintenance programs • Carry over from de
Slide 23: Formalized Life of Mine Agreements with Local Communities
Formalized Life of Mine Agreements with ith L Locall C Communities iti Uchuccarco • Life Lif off mine i agreementt in i place • Land rights acquired Chilloroya • Life of mine agreement in place • Land rights acquired • Relocation process is underway COMMITTED TO COMMUNITY INVESTMENTS 23
Slide 24: Constancia Pre-Construction Ongoing
Constancia Pre-Construction Ongoing • Board approved incremental US$34 million in capitalized spending (over and above US$107 million) • Expenditures to support h d hydrogeological l i ld drilling illi and d camp construction • Figures are included in total gross CAPEX estimate of US$1.5 $ billion 2
Slide 25: Constancia Exploration Program
Constancia Exploration Program N New ttargett anomalies li ididentified tifi d ffor ttesting ti d during i 2012 d drill ill campaign i North Constancia Main 2012 Drill Target • 30,000 metre drill program planned • Drilling at Chilloroya South to begin in May 2012 with two drills • Area demonstrates
Slide 26: Constancia Exploration Program
Constancia Exploration Program F Focused d on expanding di Pampacancha P h Resource R Titan IP survey indicates a strong and large Pampacancha anomaly directly to the west of the Titan IP Response Chargeability (miliradian) Pampacancha resource • Drilling to take place in early April 2012 North Cons
Slide 27: Anticipated Milestones - 2012
Anticipated Milestones - 2012 Q1 Mine Equipment Orders Placed April Definitive Community Agreements in Place Q2 Beneficiation Concession Approval Stability Agreement in Place with Peruvian Government Mid-2012 Project Financing in Place Project Recommendation to Board 2012 Q1 Q2 Q3 Q4 PROJECT REMAINS
Slide 28: Leading Production Growth
Leading Production Growth F Focus in i 2012 iis continued ti d progress off d development l t stage t assets t 255% GROWTH 135% GROWTH 65% GROWTH (1) C P Cu Production d ti P Precious i Metals M t l Production P d ti Z Production Zn P d ti (kt) (koz) (kt) HudBay - Current Ops (2) Lalor (3) Constanci
Slide 29: Leverage Commodity Exposure Per Share
Leverage Commodity Exposure Per Share • Actively exploring in Flin Flon Greenstone Belt and Constancia • Increasing commodity exposure through pipeline of early stage opportunities • Minority equity positions in 17 companies with market value of ~$100 million as at Dec. 31, 2011 • One of the best “f
Slide 30: Creating Sustainable Value Through High Quality Long Life Deposits
HBM Creating Sustainable Value Through High Quality Long Life Deposits Reserves & Resources and Constancia Project Update Conference Call, April 2, 2012