Hudbay Minerals Inc · TSX:HBM
Hudbay Minerals — Shareholder Meeting (May 2019)
21 slides from Hudbay Minerals's shareholder meeting presentation, May 7, 2019
Slide 1: Annual Meeting of Shareholders
ANNUAL MEETING OF SHAREHOLDERS May 7, 2019
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. Ofte
Slide 3: Consistent Strategy Since 2010
CONSISTENT STRATEGY SINCE 2010 VISION STATEMENT Our vision is to become a top-tier operator of long-life, low cost mines in the Americas VALUE DRIVERS STRATEGIC CRITERIA 3
Slide 4: Diversified Mid-Tier Copper Producer
DIVERSIFIED MID-TIER COPPER PRODUCER Constancia & Exploration Peru Lalor, 777 & Exploration Manitoba, Canada TSX, NYSE, BVL Symbol HBM Exploration British Columbia, Canada Rosemont Market Capitalization1 C$2.3 billion Arizona, USA Ann Mason Shares Outstanding 261 million Nevada, USA Exploration Chil
Slide 5: Industry Leader in Responsible Mining
INDUSTRY LEADER IN RESPONSIBLE MINING Consistently recognized for strong community engagement in Peru and productive local working relationships Operating in Manitoba for 90+ years 1st Place Award for Community Relations Founded in Flin Flon, Hudbay has discovered, Third Community Relations Internat
Slide 6: Copper Focus
COPPER FOCUS SIGNIFICANT STRUCTURAL COPPER MARKET DEFICITS Emerging copper market deficits are expected to occur imminently and continue for the next 5-7 years Base case mine production peaks in 2022 according to Wood Mackenzie; however, supply forecast dependent on future projects with associated r
Slide 7: Returns & Leverage to Copper
RETURNS & LEVERAGE TO COPPER Hudbay has consistently provided investors with leverage to the copper price and has met or outperformed the peer median in 3 of the last 4 years ANNUAL TSR – HUDBAY, COPPER PRICE PEER LEVERAGE TO COPPER PRICE (2016- AND PEER GROUP1 2018, R2 of Monthly Returns) 50% 45% 4
Slide 8: Recent Achievements
RECENT ACHIEVEMENTS OPERATIONAL AND GROWTH INITIATIVES ✓ Utilized technology and process improvements to drive additional efficiencies in OPERATIONAL our operations ✓ Consolidated copper production exceeded 2018 guidance by 14% , zinc and precious metals were within 2018 guidance ranges 1 ✓ In 2018,
Slide 9: Constancia Optimization
CONSTANCIA OPTIMIZATION BENEFITS OF CONTINUOUS IMPROVEMENT INITIATIVES Increasing quarterly trend in copper recoveries Stable copper production with low cash cost and sustaining cash costs Lowest cost sulphide open pit copper mine in South America COPPER RECOVERIES COPPER PRODUCTION AND CASH COSTS1,
Slide 10: Industry Leading Cost Performance
INDUSTRY LEADING COST PERFORMANCE Constancia is the lowest cost sulphide copper mine in South America Continuous operational improvements at Constancia have driven costs down, while increasing efficiencies and productivity LOWEST COST OPEN PIT COPPER MINES IN SOUTH AMERICA (2018) $20.00 $18.24 $18.0
Slide 11: Constancia Regional Potential
CONSTANCIA REGIONAL POTENTIAL Since 2012, executed over 90 social agreements with local governments and communities Pleased with progress on Pampacancha negotiations to date with first ore expected in 2020 Exploration work to be conducted on newly acquired properties near Constancia with potential t
Slide 12: Lalor Updated Mine Plan Highlights
LALOR UPDATED MINE PLAN HIGHLIGHTS NEW BRITANNIA MILL THE OPTIMAL PROCESSING SOLUTION FOR LALOR GOLD Gold recoveries increased to 93% at New Britannia from 53% at Stall INCREASED LALOR RESERVES ACROSS ALL METALS Gold reserve grade increased by over 1.0 g/t (+44%) with higher tonnage1 In-situ contain
Slide 13: Lalor Gold Positioning
LALOR GOLD POSITIONING Lalor becomes a meaningful gold producer as one of the lowest cost gold mines in Canada 633 2017A GOLD PRODUCTION1 (K OZ) 571 376 353 349 305 272 236 209 200 196 194 167 157 141 111 99 91 86 84 67 59 55 51 49 48 28 16 Snow Lake Canadian Detour Lake Taylor Musselwhite Davidson
Slide 14: Snow Lake Regional Potential
SNOW LAKE REGIONAL POTENTIAL HUDBAY HAS A LARGE PROSPECTIVE LAND PACKAGE IN THE SNOW LAKE BELT WITH SIGNIFICANT GOLD EXPLORATION POTENTIAL Proven + Probable Reserves Grade Contained Tonnage Copper Gold Silver Zinc Gold Eq(1) Gold Gold Eq(1) (Mt) (%) (g/t) (g/t) (%) (g/t) (koz) (koz) Lalor - Base Met
Slide 15: Discovery of 1901 Deposit
DISCOVERY OF 1901 DEPOSIT CONTINUING TO ADD VALUE THROUGH EXPLORATION Discovery of a new deposit with high-grade Chisel deep zinc in continuity with high-grade copper EM plates and gold intersections Located between the old Chisel North mine and Lalor at a depth of less than 600m below surface and w
Slide 16: Rosemont Relative to Peers
ROSEMONT RELATIVE TO PEERS COPPER PRODUCTION AND EBITDA1 ROSEMONT ECONOMICS1 Hudbay Rosemont $2,000 After-Tax NPV 40% 8% (US$M) Unlevered IRR (%) 400 Copper Production (kt) EBITDA (US$M) 1500 $1,448 $1,500 30% 300 282 $1,000+ $1,115 21.2% 1000 18.5% $1,000 20% $769 15.5% 127 $500+ 200 155 $538 $500
Slide 17: Rosemont Initial Capex & Funding
ROSEMONT INITIAL CAPEX & FUNDING HUDBAY IS WELL POSITIONED TO FUND ROSEMONT 3-year construction period; $144 million in year 1, $861 million in year 2, $768 million in year 3, remaining capital in ramp-up period ~5% growth and 15% contingency added per item ROSEMONT INITIAL CAPITAL COST ($M) BREAKDO
Slide 18: Best in Class Mine Development
BEST IN CLASS MINE DEVELOPMENT Constancia’s capital cost performance was best in-class compared to other greenfield open pit copper mines in the Americas and the same leadership team will develop Rosemont into an operating mine LEADING CAPITAL COST CONTROL VS. COMPARABLE RAMP-UP RECOGNIZED AS BEST I
Slide 19: Project Pipeline
PROJECT PIPELINE Hudbay has built a diversified portfolio of operating mines and an extensive development pipeline through robust exploration and disciplined M&A to perpetuate production growth Production Constancia Lalor 777 Acquired 2011 Discovered 2007 Original Asset Upon Developed 2012 Developed
Slide 20: Hudbay Investment Rationale
HUDBAY INVESTMENT RATIONALE Consistent long-term growth strategy and world-class asset base Proven track record of successful project development Operational excellence and value creation through successful exploration Focused on free cash flow generation and prudent capital allocation Robust projec
Slide 21: Annual Meeting of Shareholders
ANNUAL MEETING OF SHAREHOLDERS May 7, 2019