Hudbay Minerals Inc · TSX:HBM
Hudbay Minerals — Shareholder Meeting (May 2013)
46 slides from Hudbay Minerals's shareholder meeting presentation, May 10, 2013
Slide 1: Annual and Special Meeting of Shareholders
ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS May 10, 2013
Slide 2: G. Wesley Voorheis, Chairman
G. Wesley Voorheis Chairman
Slide 3: J. Bruce Barraclough 1947 - 2013
J. Bruce Barraclough 1947 - 2013
Slide 4: G. Wesley Voorheis, Chairman
G. Wesley Voorheis Chairman
Slide 5: David Garofalo, President & CEO
David Garofalo President & Chief Executive Officer
Slide 6: Forward-looking 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 this presentation, othe
Slide 7: Note to U.S. Investors
Note to U.S. Investors Information concerning Hudbay’s mineral properties has been prepared in accordance with the requirements of Canadian securities laws, which differ in material respects from the requirements of SEC Industry Guide 7. Under Securities and Exchange Commission (the “SEC”) Industry
Slide 8: Our Vision: To become a top-tier operator of long-life, low-cost mines in the Americas
Our Vision: To become a top-tier operator of long-life, low-cost mines in the Americas AGM PRESENTATION l 8
Slide 9: Metal prices still strong in historical terms
Metal prices still strong in historical terms 1000 900 800 700 600 Two thirds of the last 25 years have seen: 500 Copper <$1.00 Gold <$300 400 Zinc <$0.50 Silver <$5.00 300 200 100 0 1/02/90 1/02/92 1/02/94 1/02/96 1/02/98 1/02/00 1/02/02 1/02/04 1/02/06 1/02/08 1/02/10 1/02/12 Copper Zinc Gold Silv
Slide 10: Rapidly declining copper head grades support higher prices
Rapidly declining copper head grades support higher prices Source: Wood Mackenzie, Ltd. Q4 2012 AGM PRESENTATION l 10
Slide 11: Jurisdictional Tax and Political Risk Add to Supply Challenges
Jurisdictional Tax and Political Risk Add to Supply Challenges Global phenomenon Canada not immune Mining companies must pro-actively manage political risk Source: Corporate income taxes, mining royalties and other mining taxes, PWC, June 2012. Resource Nationalism Update, E&Y, June 2012 AGM PRESENT
Slide 12: … as do $100 billion of project delays in the last year
… as do $100 billion of project delays in the last year Aynak $4,390 Tampakan Donlin Gold $5,900 $6,679 Pebble Solwara Frieda River $4,700 $407 $5,300 KSM Lumwana Expansion $531 New Prosperity $450-$550 $1,476 Olympic Dam Ann Mason $30,000 Resolution $1,280 $6,000 Panantza Boleo $1,300 Mirador $1,40
Slide 13: Demand long-term underpinned by continual and dramatic urbanization
Demand long-term underpinned by continual and dramatic urbanization AGM PRESENTATION l 13
Slide 14: Base Metal Equities vs. Base Metal Performance
100 120 0 20 40 60 80 1/01/11 Source: Bloomberg 2/01/11 3/01/11 4/01/11 5/01/11 6/01/11 7/01/11 Copper 8/01/11 9/01/11 10/01/11 11/01/11 12/01/11 1/01/12 2/01/12 3/01/12 4/01/12 5/01/12 6/01/12 7/01/12 8/01/12 9/01/12 S&P TSX Diversified Metals and Mining Index 10/01/12 11/01/12 12/01/12 1/01/13 2/0
Slide 15: Gold Price vs. Gold Equities
Gold Price vs. Gold Equities 800 700 600 500 400 66% valuation gap 300 200 100 0 3/29/01 3/29/02 3/29/03 3/29/04 3/29/05 3/29/06 3/29/07 3/29/08 3/29/09 3/29/10 3/29/11 3/29/12 3/29/13 iShares S&P/TSX Global Gold Index Fund Gold Source: Bloomberg AGM PRESENTATION l 15
Slide 16: Mining Equities: Lessons Learned
Mining Equities: Lessons Learned Focus on leverage to commodity prices Increase economies of scale in order to keep operating costs down Focus on exploration near existing processing facilities Establish and stick to return on investment criteria AGM PRESENTATION l 16
Slide 17: Mid tier diversified mining companies: an endangered species
Mid tier diversified mining companies: an endangered species AGM PRESENTATION l 17
Slide 18: Consistent Growth Criteria
Consistent Growth Criteria Focus geographically 1 Focus geologically 3 2 Acquire small, think big Invest patiently 6 4 Exploration Properties Exploration Offices 5 Producing/Development Properties Preferred Jurisdictions AGM PRESENTATION l 18
Slide 19: From Harvest to Industry-Leading Growth in Three Years
From Harvest to Industry-Leading Growth in Three Years 20102 20132 Copper Equivalent1 Production -30% 210% 3-Year Growth (projected growth to 2013) (projected growth to 2016) Proven & Probable Reserves + 290% Copper Equivalent pounds per 12 46 share Measured & Indicated3 + 45% Copper Equivalent poun
Slide 20: Our Manitoba Business
Our Manitoba Business Exploring, building and reclaiming, while consistently hitting operating targets AGM PRESENTATION l 20
Slide 21: 777 Flagship Mine
Flagship 777 Mine Steady production with low cash costs MANITOBA 777 Winnipeg Mining Cost (C$/tonne) Ore Mined (kt) 12013 estimated production and costs are based on guidance as disclosed in Hudbay's news release entitled "Hudbay Announces 2013 Production Guidance and Capital and Exploration Forecas
Slide 22: 777 Mine
777 Mine Underground exploration program underway AGM PRESENTATION l 22
Slide 23: Lalor
Lalor First Phase of Commercial Production – April 1, 2013 MANITOBA $794 million commitment to develop our next big Lalor mine in Manitoba Largest initial discovery in our 86-year history Winnipeg Projected 20 year mine life will enable the company to celebrate milestone of 100 years mining in the F
Slide 24: Lalor
Lalor Key milestones completed on time and on budget Surface 0m Production shaft Vent raise 710m / shaft depth1 500m 750m 2013 - 2014 2015 Exploration platform 1000m 1500m Base Metal Resource Gold & Copper-Gold Resource Looking 0m 250m High Grade Intercepts N70oW 1 As at April 26, 2013 AGM PRESENTAT
Slide 25: Reed Copper Project
Reed Copper Project Near surface, high-grade copper mine under MANITOBA development Reed Initial production expected in late 2013, full production expected by early 2014 Winnipeg Leverages existing Flin Flon infrastructure and workforce Projected 5-year mine life with average production in concentra
Slide 26: Our South America Business
Our South America Business New frontier, established mining jurisdiction, familiar business model AGM PRESENTATION l 26 AGM PRESENTATION l 26
Slide 27: Constancia Project
Constancia Project PERU $US1.5 billion investment to develop large scale, low cost mine in Peru Lima 2,800 workers mobilized with camp able to accommodate 3,500 workers Constancia Expected average of 90,000 tonnes of annual copper production over an expected 16-year mine life Initial production plan
Slide 28: Constancia has Good Access to Infrastructure
Constancia has Good Access to Infrastructure 83km access road from Yauri Tintaya power substation 70km away Rail-head at Imata 150km away Road upgrades for concentrate haulage within project scope ~475km from Matarani Port by road Infrastructure & power expected to be available to meet Constancia pr
Slide 29: Constancia has Exploration Potential
Constancia has Exploration Potential Pampacancha • Resource is expected to enable continued optimization of the mine plan Chilloroya South • Encountered presence of gold mineralization • Geological interpretation for future exploration considerations is ongoing AGM PRESENTATION l 29
Slide 30: Social Responsibility
Social Responsibility Creating Sustainable Communities > Life of Mine agreements signed with local communities in Peru > Operating mines are ISO 14001 and OHSAS 18001 EHS certified > Adopted Mining Association of Canada toward Sustainable Mining Initiative in Canada & Internationally > Committed to
Slide 31: Highlights
Highlights 1. Growth in Copper, Gold and Zinc Production with Exploration Upside 2. Consistent Performance from Reliable Operations 3. Disciplined and Clear Growth Strategy 4. Strong Balance Sheet 5. Experienced Management and Operating Team AGM PRESENTATION l 31
Slide 32: Our Vision: To become a top-tier operator of long-life, low-cost mines in the Americas
Our Vision: To become a top-tier operator of long-life, low-cost mines in the Americas AGM PRESENTATION l 32
Slide 33: Appendix
Appendix AGM PRESENTATION l 33
Slide 34: 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 Proven 10 0.54 170 0.318 4.20 Probable 37 0.46 140 0.276 4.56 Total Proven 359
Slide 35: 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 36: Manitoba Mineral Reserves
Manitoba Mineral Reserves 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 Probable 1,8
Slide 37: Manitoba Mineral Resources
Manitoba Mineral Resources September 30, 2012 – Exclusive of mineral reserves 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
Slide 38: 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 AGM PRE
Slide 39: Other Properties
Other Properties Mineral Resources Category Tonnes Cu (%) Zn (%) Au (g/t) Ag (g/t) Pb (%) Back Forty1 Open Pit Measured 4,721,000 0.55 3.49 2.24 26.77 0.13 Indicated 4,927,000 0.14 1.49 1.90 18.30 0.21 Inferred 152,000 0.19 2.86 2.76 34.56 0.39 Back Forty Underground Measured 1,982,000 0.29 5.04 1.9
Slide 40: Copper Equivalent Reserves and Resources
Copper Equivalent Reserves and Resources1 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 The reserve and resource estimates included in this presentation were prepared in accordance with NI 43-101 and the Canadian Institute on Mining, Metallurgy and Petroleum Standards on Mineral Resources and Reserves: Definitions and Guidelines. All mineral resources referred to
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$. Other
Slide 45: Qualified Person
Qualified Person > The technical and scientific information in this presentation related to the Constancia project has been approved by Cashel Meagher, P. Geo, Hudbay’s Vice-President, South America Business Unit. The technical and scientific information related to all other sites and projects conta
Slide 46: Annual and Special Meeting of Shareholders
ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS May 10, 2013