Hudbay Minerals Inc · TSX:HBM
Hudbay Minerals — BMO 31st Annual Metals and Mining Conference (February 2022)
60 slides from Hudbay Minerals's conference presentation, February 2022
Slide 1: Investor Presentation February 2022
INVESTOR PRESENTATION February 2022
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: Hudbay
H' DBAY
Slide 4: Revenue and Reserves by Metal
REVENUE AND RESERVES BY METAL Revenue1 Reserves DIVERSIFIED MID-TIER 9% 2% 4% 6% COPPER PRODUCER 4% Cu Au 7% 12% 5.9Mt $1.8B Ag 20% year-over-year copper 25% 60% Zn CuEq.2 production growth in 2022 Mo 71% Existing operations offer further near-term growth in copper and gold production ANNUAL COPPER
Slide 5: Copper Demand Drivers
COPPER DEMAND DRIVERS GROWING DEMAND FOR “GREEN” COPPER Global De-carbonization Copper is one of the most heavily utilized metals in renewable energy systems and is the least carbon- intensive Electrification of Vehicles EVs require nearly 4x more copper than a conventional gas vehicle EV production
Slide 6: Copper Supply Gap
COPPER SUPPLY GAP GLOBAL COPPER MINES AND PROJECTS UNABLE TO MEET LONG-TERM DEMAND EXPECTATIONS Mt Base Case Production Capability Declining Copper Grades 35 Probable Projects Primary Demand Global copper resources continue to be 30 depleted and the average mined copper grade has declined by more th
Slide 7: Hudbay Copper Growth Pipeline
HUDBAY COPPER GROWTH PIPELINE LEADING COPPER PRODUCTION GROWTH AND COPPER RESOURCE OPTIONALITY Meaningful near-term Cu production growth with high quality organic pipeline offering significant long-term growth LEADING NEAR-TERM COPPER PRODUCTION GROWTH SIGNIFICANT GROWTH IN COPPER RESOURCES PER SHAR
Slide 8: Hudbay
H' DBAY
Slide 9: Copper Quality Assets Sustainability
Peru Constancia – 16 year mine life Exploration Properties 100% ownership Maria Reyna Open pit copper/molybdenum mine and concentrator Caballito Annual average Cu and Au production 1 of 102kt and 58koz, respectively Kusiorcco Pampacancha – 4 year mine life Llaguen 100% ownership Open pit copper/gold
Slide 10: South America Business Unit
Cusco SOUTH AMERICA CUSCO BUSINESS UNIT Las Bambas CONSTANCIA Yauri PERU Tintaya Antapaccay MINE Lima TOWN AREQUIPA Imata RAIL ROAD CONSTANCIA Arequipa Cerro Verde MOQUEGUA & Peru Economic Risk Business Political Risk Commercial Risk Financing Risk Matarani Environment Risk BB2 Medium Risk 0 TACNA 1
Slide 11: Constancia Mine
CONSTANCIA MINE 16 YEARS Cu-Mo 86k tpd MINE LIFE PORPHYRY DEPOSIT MILL CAPACITY 102kt 58koz $1.15/lb 8-YEAR AVG. 8-YEAR AVG. 8-YEAR AVG. CU PRODUCTION1 AU PRODUCTION1 CASH COSTS1 CONSTANCIA COPPER PRODUCTION PROFILE1 140 $1.50 122 124 120 $1.45 Cash Costs ($/lb) 102 $1.25 $1.28 LONG LIFE, LOW-COST C
Slide 12: Delivering on Investments in Peru
DELIVERING ON INVESTMENTS IN PERU PAMPACANCHA IN FULL PRODUCTION Q4 was the highest copper production quarter in Peru in 2021 as grades improved and mill performance was strong, resulting in the operations achieving full year production expectations PERU 2021 QUARTERLY COPPER PRODUCTION AND CASH COS
Slide 13: Peru Exploration Potential
PERU EXPLORATION POTENTIAL SEVERAL OPPORTUNITIES EXIST ON HUDBAY’S EXTENSIVE LAND PACKAGE IN PERU CONSTANCIA SATELLITE EXPLORATION TARGETS Geophysics indicate several nearby exploration targets within trucking distance of Constancia’s infrastructure - Maria Reyna and Caballito have Maria Reyna & Kus
Slide 14: Manitoba Business Unit
New Britannia Gold Mill MANITOBA BUSINESS UNIT 1,500 tpd capacity Snow Lake Stall Base Metal Mill 3,800 tpd capacity MINE LALOR MINE ~4,650 tpd MILL TOWN RAIL ROAD LALOR 777 0 5km SASKATCHEWAN MANITOBA Winnipeg Snow Lake LALOR MINE 777 MINE ~2,500 tpd Flin Flon Canada Economic Risk Business Flin Flo
Slide 15: Manitoba Operations
MANITOBA OPERATIONS 16 / <1 YEARS Au-Zn-Cu 3.8 / 6.0k tpd SNOW LAKE/ 777 VMS DEPOSITS STALL MILL / FLIN FLON MINE LIFE1 CONCENTRATOR CAPACITY 150-185koz 50-70kt 12-16kt 2022E AU PRODUCTION 2022E ZN PRODUCTION 2022E CU PRODUCTION MANITOBA GOLD PRODUCTION PROFILE2 200 185 178 168 Cash Costs ($/oz) LOW
Slide 16: Delivering on Investments in Manitoba
DELIVERING ON INVESTMENTS IN MANITOBA NEW BRITANNIA MILL ACHIEVED BEST-IN-CLASS RAMP-UP NEW BRITANNIA DAILY MILL THROUGHPUT The ramp up of New Britannia has performed better than top industry benchmark curves New Britannia mill expected to achieve design Throughput (tpd) throughput within six months
Slide 17: Snow Lake Exploration Potential
SNOW LAKE EXPLORATION POTENTIAL LALOR IN-MINE EXTENSION POTENTIAL AND REGIONAL UPSIDE EXPLORATION OPPORTUNITIES Snow Lake deposits contain 1.5 million ounces of gold in inferred resources Lalor and 1901 inferred resources estimated using stringent methodology constraining the resource within a stope
Slide 18: Arizona Business Unit
ARIZONA BUSINESS UNIT Miami Pinto Valley Phoenix Resolution ARIZONA, US Ray Morenci Florence Safford MINE TOWN RAIL ROAD Silver Bell Phoenix Tucson Tucson Gunnison Mission ROSEMONT & COPPER WORLD Sierrita COPPER WORLD ROSEMONT United States Economic Risk Business Political Risk Commercial Risk Finan
Slide 19: Rosemont & Copper World Projects
ROSEMONT & COPPER WORLD PROJECTS HIGH-QUALITY COPPER DEVELOPMENT PROJECTS Rosemont is a large porphyry deposit with a 19-year mine life generating 15.5% after-tax unlevered project IRR at $3.00/lb Cu1 Construction work suspended at Rosemont following a 2019 U.S. District Court ruling; Hudbay and the
Slide 20: Copper World Project
COPPER WORLD PROJECT Total private land package Peach North Limb Copper World Elgin South Limb Broad Top Butte Bolsa SIGNIFICANT NEW COPPER DISCOVERY Discovered in early 2021, followed by an aggressive drill program leading to 2017 Rosemont an initial resource estimate in December 2021 Resource Pit
Slide 21: Copper World Project
COPPER WORLD PROJECT NEAR-SURFACE, HIGH-GRADE PORTION EXPECTED TO BE MINED EARLIER IN MINE LIFE Resources comprise both sulphides and oxides and are potentially amenable to flotation and heap leach processing methods COPPER WORLD 96Mt INDICATED 0.57% CuT Several deposits contain higher grade mineral
Slide 22: Nevada Mason Project
NEVADA MASON PROJECT Power Plant Lyon County NEVADA Douglas County MacArthur Reno MASON PROJECT Yerington Blue Hill Mine (Historic) TOWN MASON Yerington Road HUDBAY MINERAL CLAIMS HUDBAY PRIVATE LAND CLAIMS POWER LINE Mason RAIL Las Vegas MINE / DEPOSIT Pumpkin Hollow Mason Valley Mines United State
Slide 23: Mason Project
2.2Bt $1.76/lb 27 YEARS MASON PROJECT M&I TONNAGE CU SUSTAINING CASH COST MINE LIFE 0.29% 112kt $773M / 15% M&I CU GRADE ANNUAL CU PRODUCTION NPV / IRR 1 MASON ECONOMICS1 After-Tax NPV10% (US$M) Unlevered IRR (%) $2,019 23% 18% $1,191 15% $773 $3.25 $3.50 $4.00 $3.25 $3.50 $4.00 Column1 Column1 LARG
Slide 24: ESG
SEE a Pine ESG H' DBAY
Slide 25: Our Approach to Sustainability
OUR APPROACH TO SUSTAINABILITY MUTUAL RESPECT, TRUST AND CONTINUOUS DIALOGUE By living our values, we build strong relationships with our employees, host communities and governments, making us a better partner and a better company Our Values are: Dignity & Respect: Caring: We treat our stakeholders
Slide 26: Environment
ENVIRONMENT WE AIM TO DEVELOP, OPERATE AND CLOSE MINES IN A MANNER THAT DEMONSTRATES OUR COMMITMENT TO ENVIRONMENTAL STEWARDSHIP LEADING EMISSIONS RANKING Near-term GHG mitigation is focused on energy efficiency t CO2e/t at our operations CuEq Rank Boliden 0.9 1 Over 50% of our total energy consumpt
Slide 27: Social Impact & Our People
SOCIAL IMPACT & OUR PEOPLE EMBRACING DIVERSITY AND PROVIDING A HEALTHY & SAFE WORKPLACE Constancia first mine in Peru to obtain SafeGuard certification, recognizing full compliance with all COVID-19 safety protocols All operations are required to be certified to ISO 45001, an internationally accepte
Slide 28: Governance
GOVERNANCE WE RECOGNIZE THE TREMENDOUS OPPORTUNITY THAT WE HAVE TO POSITIVELY CONTRIBUTE LOCALLY AND GLOBALLY TO A MORE SUSTAINABLE WORLD Focused on increased disclosure transparency Data mapped to GRI, SASB and TCFD Disclosure provided through CDP Climate, Water and Forests questionnaires MSCI rank
Slide 29: Sustainable Value Creation
SUSTAINABLE VALUE CREATION WE ALLOCATE RISK-ADJUSTED CAPITAL TO CREATE VALUE ACROSS EVERY STAGE OF THE MINING LIFECYCLE 2022 KEY OBJECTIVES Successful Proven Mine Exploration Development DELIVER meaningful copper and gold production growth to generate positive cash flow and strong returns on investe
Slide 30: Growing Production Outlook
GROWING PRODUCTION OUTLOOK ENTERING A PERIOD OF SIGNIFICANT COPPER AND GOLD PRODUCTION GROWTH Completed ~$250M brownfield investment program in 2021 and now at an inflection point in terms of meaningful copper and gold production growth, which is expected to lead to significant growth in EBITDA Cu1
Slide 31: Near-Term Catalysts
NEAR-TERM CATALYSTS NUMEROUS ORGANIC GROWTH OPPORTUNITIES EXIST New Britannia gold mill construction, ramp-up and first production achieved ✓ 2021 MANITOBA Updated Snow Lake mineral reserves and resources incorporating recent drilling at 1901 and Lalor Q1 2022 Advance 3rd phase of Snow Lake gold str
Slide 32: Slide 32
Slide 33: Leading Organic Growth Pipeline
LEADING ORGANIC GROWTH PIPELINE HUDBAY HAS BUILT A DIVERSIFIED PORTFOLIO FOCUSED ON GROWTH THROUGH EXPLORATION AND M&A, WHILE DIVESTING NON-CORE ASSETS RESOURCE FEASIBILITY STUDY EXPLORATION PRODUCTION DEFINITION COMPLETE Constancia Norte Constancia Mine evaluating underground potential Cu-Mo-Au-Ag
Slide 34: World-Class Management Team
WORLD-CLASS MANAGEMENT TEAM PETER KUKIELSKI PRESIDENT & CEO PROVEN MINING INDUSTRY EXPERIENCE More than 30 years of sector experience in base metals, precious metals and bulk materials across the globe, including leadership positions at Nevsun, Anemka, ArcelorMittal, Teck and Noranda ANDRE LAUZON ST
Slide 35: Board of Directors
BOARD OF STEPHEN A. LANG CHAIR DIRECTORS Stephen has over 40 years of experience in the mining industry, including engineering, development and production at gold, copper, coal and platinum group metals operations CAROL T. BANDUCCI IGOR GONZALES RICHARD HOWES DIRECTOR DIRECTOR DIRECTOR Carol was for
Slide 36: Ample Liquidity & Long-Dated Debt Profile
AMPLE LIQUIDITY & LONG-DATED DEBT PROFILE PRUDENT BALANCE SHEET MANAGEMENT LONG-TERM DEBT STRUCTURE PROVIDES SIGNIFICANT FLEXIBILITY Cash and Equivalents1 $271 million 4.5% Revolver Availability2 $347 million due 2026 Callable starting in 2023 (October 2025 Maturity) Available Liquidity $618 million
Slide 37: Copper Cash Cost Curve
COPPER CASH COST CURVE LEADING LOW-COST PROFILE (2023E Copper AISC1) 1. Wood Mackenzie’s 2023 by-product C1 + sustaining capex copper cost curve (Q4 2021 dataset dated December 2021). Wood Mackenzie’s costing methodology may be different than the methodology reported by Hudbay or its peers in their
Slide 38: Greenhouse Gas Emissions Curve
GREENHOUSE GAS EMISSIONS CURVE HUDBAY’S OPERATIONS ARE WELL-POSITIONED ON THE SCOPE 1 & SCOPE 2 EMISSIONS CURVE Benchmarking curves rank site by site emissions for global copper producers Operation Scope 1 & 2 Emissions Rank (t CO2e / t CuEq.) (out of 282) Hudbay’s operations positioned in the 1st a
Slide 39: 3-Year Production Outlook
3-YEAR PRODUCTION OUTLOOK GROWING COPPER AND GOLD PRODUCTION CONTAINED METAL IN CONCENTRATE AND DORE1 2022 GUIDANCE 2023 GUIDANCE 2024 GUIDANCE PERU Copper tonnes 89,000 - 115,000 110,000 - 134,000 111,000 - 136,000 Gold ounces 70,000 - 90,000 100,000 - 125,000 110,000 - 135,000 Silver ounces 1,620,
Slide 40: 2022 Cost Guidance
2022 COST GUIDANCE CAPITAL EXPENDITURE GUIDANCE1 EXPLORATION EXPENDITURES 2022 2022 ($ MILLIONS) ($ MILLIONS) SUSTAINING CAPITAL Peru 25 Peru2 105 Manitoba 15 Manitoba3 115 Arizona and other 25 Total sustaining capital 220 Total exploration expenditures 65 Capitalized spending (25) GROWTH CAPITAL To
Slide 41: Constancia Mine Plan
CONSTANCIA MINE PLAN 16-YEAR MINE PLAN BASED ON PROVEN AND PROBABLE RESERVES ONLY Updated mine plan for Constancia operations reflects higher copper and gold production from 2022 to 2025 as the higher grades from the Pampacancha deposit enter the mine plan 2021A 2022 2023 2024 2025 2026 2027 2028 20
Slide 42: Constancia Norte
CONSTANCIA NORTE UNDERGROUND POTENTIAL TO BE FURTHER INVESTIGATED There is an additional opportunity to include more reserves and/or improve the life of mine plan by mining some of the steeply dipping/narrower high-grade skarn mineralization as a satellite underground operation to the main Constanci
Slide 43: Maria Reyna Historical Drill Results
MARIA REYNA HISTORICAL DRILL RESULTS A summary of the historical drill results from Maria Reyna is contained in the table below, however a qualified person has not independently verified this historical data or the quality assurance and quality control program that was applied during the execution o
Slide 44: Snow Lake Gold Strategy
SNOW LAKE GOLD STRATEGY PHASE 1: Repositioning PHASE 2: Optimization PHASE 3: Historical Work Lalor as a Gold Mine & Execution Expansion Potential ✓2008 & 2009 – Au zone and Cu- ✓2018 – Completion of tradeoff ✓2020 – Optimized mine plan with ✓2021 – Further optimized mine plan Au zone identified stu
Slide 45: Snow Lake Mine Plan
SNOW LAKE MINE PLAN 16-YEAR MINE PLAN BASED ON PROVEN AND PROBABLE RESERVES ONLY Mine plan optimizes processing capacity in Snow Lake to maximize the NPV of the operations and reflects the first full year of production at the New Britannia gold mill in 2022 and a ramp up at Lalor to 5,300tpd in 2023
Slide 46: Snow Lake Process
SNOW LAKE PROCESS Lalor Crushed Ore Stall Mill New Britannia Mill Grinding Grinding Flotation Flotation Tails to Tails Zn Concentrate Cu Concentrate Cyanide Destruction Anderson TIA or Leaching/CIP Dewatering Dewatering Process Lalor Paste Plant Electrowinning Tails to Stall Mill (EW)/Refining (via
Slide 47: Snow Lake Processing Logistics
SNOW LAKE PROCESSING LOGISTICS LALOR MINE 2021 11 years 2031 Source Ore 1901 DEPOSIT 2026 6 years 2031 SATELLITE GOLD DEPOSITS 2030 8 years 2037 (WIM, 3 ZONE) Processing STALL BASE METAL MILL Location 2021 11 years 2031 (WITH GOLD BY-PRODUCT) NEW BRITANNIA GOLD MILL 2021 17 years 2037 (WITH COPPER B
Slide 48: Snow Lake Growth Over Time
SNOW LAKE GROWTH OVER TIME OVER 2.9 MM OUNCES OF GOLD HAS BEEN IDENTIFIED AS RESERVES / PRODUCED TO DATE +300% INCREASE IN IDENTIFIED RESERVES / PRODUCED GOLD FROM INITIAL RESERVE ESTIMATE Cumulative Production 9% increase from Reserves 32% increase from resource conversion Inferred inclusion of sat
Slide 49: Snow Lake Exploration Potential
SNOW LAKE EXPLORATION POTENTIAL LARGE PROSPECTIVE LAND PACKAGE IN THE SNOW LAKE BELT WITH SIGNIFICANT UPSIDE POTENTIAL MINE MILL Asset Metal Type Reserves & Resources1 TOWN WIM PROJECT WIM Cu-Au Probable – 2,448kt @ 1.63% Cu; 1.6g/t Au 40kt Cu; 126koz Au RAILROAD Osborne Lake ROAD Indicated – 469kt
Slide 50: Updated Flin Flon Closure Cost Plan
UPDATED FLIN FLON CLOSURE COST PLAN 75% OF CLOSURE AND RECLAMATION COSTS ARE TO BE INCURRED AFTER 2037 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2122 $23M in tailings stability $13M in demolition costs between the close of Flin Flon
Slide 51: Flin Flon Tailings Reprocessing
FLIN FLON TAILINGS REPROCESSING OPPORTUNITY TO REPROCESS TAILINGS AND REDUCE ENVIRONMENTAL IMPACTS Over 90 years of tailings deposition through several commodity cycles Potential to utilize Flin Flon mill for reprocessing of tailings for several benefits: Increase metal production Create operating a
Slide 52: Peru Mineral Reserves (as at January 1, 2021)
PERU MINERAL RESERVES (AS AT JANUARY 1, 2021) CATEGORY TONNES Cu (%) Mo (g/t) Au (g/t) Ag (g/t) CONSTANCIA Proven 436,500,000 0.29 83 0.041 2.88 Probable 56,100,000 0.25 69 0.045 3.09 TOTAL PROVEN AND PROBABLE 492,600,000 0.29 82 0.042 2.90 PAMPACANCHA Proven 32,400,000 0.59 178 0.368 4.48 Probable
Slide 53: Peru Mineral Resources (as at January 1, 2021)
PERU MINERAL RESOURCES (AS AT JANUARY 1, 2021) CATEGORY TONNES Cu (%) Mo (g/t) Au (g/t) Ag (g/t) CONSTANCIA Measured 125,200,000 0.22 65 0.038 2.11 Indicated 118,300,000 0.22 65 0.037 2.05 Inferred 46,600,000 0.30 73 0.054 2.72 PAMPACANCHA Measured 11,400,000 0.41 101 0.245 4.95 Indicated 6,000,000
Slide 54: Snow Lake Reserves & Resources
SNOW LAKE RESERVES & RESOURCES (AS AT JANUARY 1, 2021) PROPERTY CATEGORY TONNES Cu (%) Zn (%) Au (g/t) Ag (g/t) Proven Lalor 6,860,000 0.50 5.79 2.6 29 Base Metal Zone 1901 890,000 0.40 6.61 2.0 28 Probable Lalor 1,190,000 0.64 4.32 3.2 32 1901 690,000 0.25 9.49 1.4 30 Gold Zone Proven Lalor 3,950,0
Slide 55: Snow Lake Reserves & Resources Cont.
SNOW LAKE RESERVES & RESOURCES CONT. (AS AT JANUARY 1, 2021) PROPERTY CATEGORY TONNES Cu (%) Zn (%) Au (g/t) Ag (g/t) PEN II Indicated 470,000 0.49 8.89 0.3 7 Talbot1 Indicated 2,190,000 2.33 1.79 2.1 36 TOTAL INDICATED (BASE METALS) 2,660,000 2.01 3.04 1.8 31 Watts River Inferred 3,150,000 2.34 2.5
Slide 56: Flin Flon Reserves & Resources
FLIN FLON RESERVES & RESOURCES (AS AT JANUARY 1, 2021) PROPERTY CATEGORY TONNES Cu (%) Zn (%) Au (g/t) Ag (g/t) Proven 1,125,000 1.59 5.09 2.23 31 777 Reserves Probable 399,000 1.11 4.46 1.86 30 TOTAL 777 PROVEN AND PROBABLE 1,524,000 1.46 4.93 2.13 31 Measured 120,000 1.21 7.12 2.31 39 777 Resource
Slide 57: Rosemont and Mason Reserves & Resources
ROSEMONT AND MASON RESERVES & RESOURCES (AS AT JANUARY 1, 2021) PROPERTY CATEGORY TONNES Cu (%) Mo (%) Ag (g/t) Proven 426,100,000 0.48 0.012 4.96 Rosemont Reserves Probable 111,000,000 0.31 0.010 3.09 TOTAL ROSEMONT PROVEN AND PROBABLE 537,100,000 0.45 0.012 4.58 Measured 161,300,000 0.38 0.009 2.7
Slide 58: Copper World Mineral Resource Estimates
COPPER WORLD MINERAL RESOURCE ESTIMATES (AS AT DECEMBER 1, 2021) GLOBAL MINERAL RESOURCE ESTIMATES CATEGORY TONNES CuT (%) CuSS (%) Mo (g/t) Ag (g/t) Indicated 180,000,000 0.37 0.07 136 2.7 Potential Flotation Processing Inferred 91,000,000 0.36 0.05 129 3.8 Indicated 92,000,000 0.34 0.27 74 3.4 Pot
Slide 59: Additional Reserves & Resources Information
ADDITIONAL RESERVES & RESOURCES INFORMATION The reserve and resource estimates included in this presentation were prepared in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) and the Canadian Institute of Mining, Metallurgy and Petroleum Standar
Slide 60: For more information contact
For more information contact: Candace Brûlé Vice President, Investor Relations 416.814.4387 | candace.brule@hudbay.com
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