Hudbay Minerals Inc · TSX:HBM
Hudbay Minerals — Q4 2019 Earnings Presentation
22 slides from Hudbay Minerals's earnings presentation, Feb 21, 2020
Slide 1: Q4 2019 Results Presentation
Q 4 2 0 1 9 R E S U LT S P R E S E N TAT I O N February 21, 2020
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. Oft
Slide 3: 2019 Year in Review
2019 YEAR IN REVIEW 2019 Results • Achieved full year production and unit cost guidance in both Peru and Manitoba Annual Guidance • Zinc production exceeded the top end of guidance Long Life & Mining Friendly • Consolidated copper production guidance achieved for the past five consecutive years Juri
Slide 4: 2019 Consolidated Results
2019 CONSOLIDATED RESULTS 2019 Results • Achieved all production and unit cost KEY RESULTS SUMMARY Annual Guidance guidance in 2019 2019 FY 2019 Long Life & Production1 Guidance Mining Friendly • Consolidated copper production of 137k Copper kt 137.2 122 – 150 Jurisdictions tonnes in 2019 Zinc kt 11
Slide 5: Peru Operations Review
PERU OPERATIONS REVIEW PERU SUMMARY OF OPERATING STATISTICS 2019 Results Annual Guidance • Achieved 2019 copper production guidance FY 2019 Q4 2019 and exceeded precious metals and Ore mined (million tonnes)1 33.3 8.0 Long Life & molybdenum production guidance Ore milled (million tonnes) 31.4 7.5 Mi
Slide 6: Constancia Optimization
CONSTANCIA OPTIMIZATION SEEING RESULTS FROM CONTINUOUS OPTIMIZATION INITIATIVES 2019 Results • Increasing throughput and quarterly trend in copper recoveries Annual Guidance • Continued integration of an automated, advance process control system Long Life & Mining Friendly • Flotation improvements –
Slide 7: Manitoba Operations Review
MANITOBA OPERATIONS REVIEW MANITOBA SUMMARY OF OPERATING STATISTICS 2019 Results • Copper and precious metal production met FY 2019 Q4 2019 Annual Guidance guidance and zinc production exceeded Ore mined (kt) 2,647 660 Long Life & Ore milled (kt) 2,653 685 Mining Friendly • Strong performance at 777
Slide 8: Manitoba Optimization
MANITOBA OPTIMIZATION BENEFITS OF IMPROVEMENT INITIATIVES 2019 Results Annual Guidance • Continued high tonnage out of 777 due to implementation of management systems Long Life & • Combined unit costs stabilizing at a lower level following the ramp-up of Lalor Mining Friendly in H1 2019 Jurisdiction
Slide 9: 3-Year Production Outlook
3-YEAR PRODUCTION OUTLOOK GROWING COPPER AND GOLD PRODUCTION 2019 Results Production Guidance Annual Guidance • Copper production expected to grow Contained Metal in Concentrate 1 2020 2021 2022 Long Life & by 18% from 2020 to 2022 Mining Friendly Manitoba2 Jurisdictions Copper (tonnes) 18,000 – 22,
Slide 10: 2020 Cost Guidance
2020 COST GUIDANCE 2019 Results • Manitoba growth capital related to the refurbishment of New Britannia mill as construction activities on track Annual Guidance • Peru growth capital includes initial expenditures for development of the Pampacancha deposit Long Life & Mining Friendly Jurisdictions CA
Slide 11: The Hudbay Advantage
THE HUDBAY ADVANTAGE 2019 Results Annual Guidance Long life assets located in mining friendly jurisdictions Long Life & Mining Friendly Jurisdictions Proven track record of operational excellence and low cost mines Low Cost & Operational Excellence Focused on free cash flow generation and prudent ca
Slide 12: Long Life Assets Located in Mining Friendly Regions
LONG LIFE ASSETS LOCATED IN MINING FRIENDLY REGIONS 1 2 3 2019 Results Past Production Reserve Life M&I Resource Life Inferred Resource Life 4 Annual Guidance Rosemont 19 11 1 Long Life & Constancia 4 17 6 1 Mining Friendly 5 Jurisdictions Lalor 7 10 2 9 Low Cost & 777 15 3.5 0.5 Operational Excelle
Slide 13: Proven Track Record of Operational Excellence & Low Cost Mines
PROVEN TRACK RECORD OF OPERATIONAL EXCELLENCE & LOW COST MINES 2019 Results • Proven track record of achieving or exceeding copper production guidance every year Annual Guidance for the past 5 years Long Life & Mining Friendly • Hudbay is well-positioned on the cash cost curve Jurisdictions • Focus
Slide 14: Leading Operating Cost Performance
LEADING OPERATING COST PERFORMANCE CONSTANCIA ONE OF THE LOWEST COST COPPER MINES IN SOUTH AMERICA 2019 Results • Continuous operational improvements at Constancia have driven costs down, while Annual Guidance increasing efficiencies and productivity Long Life & Mining Friendly Jurisdictions LOWEST
Slide 15: Focused on Free Cash Flow Generation & Prudent Capital Allocation
FOCUSED ON FREE CASH FLOW GENERATION & PRUDENT CAPITAL ALLOCATION 2019 Results • Generated significant EBITDA and positive free cash flow during the volatile copper price environment over the last several years due to un-hedged production and stable low-cost profile Annual Guidance • Prudent balance
Slide 16: World-Class Management Team
WORLD-CLASS MANAGEMENT TEAM WITH PROVEN MINING INDUSTRY EXPERIENCE 2019 Results DISPROPORTIONATELY TALENTED MANAGEMENT TEAM FOR HUDBAY’S SIZE Annual Guidance PETER KUKIELSKI CASHEL MEAGHER DAVID BRYSON PRESIDENT & CEO SVP & COO SVP & CFO • More than 30 years of sector • Extensive background in • 25
Slide 17: Proven Mining Industry Experience
PROVEN MINING INDUSTRY EXPERIENCE BEST IN CLASS MINE DEVELOPMENT & ADDING VALUE THROUGH EXPLORATION 2019 Results • Constancia’s development and mine ramp- CONSTANCIA (2009-2019)2 Annual Guidance Maria Reyna, up was best in class Caballito & Kusiorcco Production Reserves Long Life & • Hudbay has been
Slide 18: Strong ESG Performance
STRONG ENVIRONMENTAL, SOCIAL & GOVERNANCE (“ESG”) PERFORMANCE 2019 Results INDUSTRY LEADER IN RESPONSIBLE MINING ENVIRONMENT SOCIAL IMPACT HEALTH & SAFETY GOVERNANCE Annual Guidance ü Declining energy and GHG ü Positive impact on ü Constancia has the best ü Board refreshed in 2019 with Long Life & e
Slide 19: Copper-Focused With Diversified Organic Growth Pipeline
COPPER-FOCUSED WITH DIVERSIFIED ORGANIC GROWTH PIPELINE 2019 Results HUDBAY’S REVENUE BREAKDOWN BY TYPE1 • Hudbay’s primary source of revenue is from copper 2% • Hudbay offers diversification from its growing gold Annual Guidance exposure 18% Long Life & Mining Friendly Cu • Strong fundamentals for
Slide 20: Strategic Vision & Execution of Strategy
STRATEGIC VISION & EXECUTION OF STRATEGY VALUE CREATION 2019 Results • Re-affirmed key elements of strategic vision with Annual Guidance Successful a focus on copper in mining friendly jurisdictions Exploration Long Life & • Greater focus on capital allocation and risk- Mining Friendly adjusted retu
Slide 21: Leading Organic Growth Pipeline
LEADING ORGANIC GROWTH PIPELINE HUDBAY HAS BUILT A DIVERSIFIED PORTFOLIO FOCUSED ON COPPER & GOLD GROWTH 2019 Results • Through robust exploration and disciplined M&A, Hudbay has built a diversified portfolio of operating mines Annual Guidance and an extensive development pipeline • Hudbay’s portfol
Slide 22: For More Information Contact
For More Information Contact: Candace Brûlé, Director, Investor Relations 416.814.4387 | candace.brule@hudbay.com