Slide 1: Constancia Site Visit Presentation
CONSTANCIA SITE VISIT PRESENTATION July 17, 2018
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: Safety Review
H' DBAY SAFETY REVIEW
Slide 4: Health & Safety Statistics
Health & Safety Statistics 10.0 0.14 Target FI: 0.13 9.0 Target SI: 9 Target FI: 0.12 0.12 8.0 Target SI: 8.1 7.0 0.10 Severity Index(SI) Frequency Index (FI) 6.0 0.08 5.0 0.06 4.0 3.0 0.04 0.030 0.030 0.0256 0.0279 0.0256 0.0257 0.0264 2.0 0.0254 0.0253 0.02 1.0 0.652 0.00 0.050 0.130 0.1278 0.1284
Slide 5: Environmental Performance KPI's
Environmental Performance KPI’s INDICATOR WEIGHT MONTH YTD TARGET ENVIRONMENTAL MANAGEMENT INDICATORS (EMI) 0.7 Ja n Feb Ma r Apr Ma y Jun KPI EMI INSPECTIONS (Opportuni ti es for Improvement) 0.4 100 100 94 100 100 100 99 90 OEFA-LIKE AUDIT 0.1 100 100 100 100 100 100 100 94 OEFA AUDIT 0.15 100 100
Slide 6: Constancia Permits
Constancia Permits Main permits: ● Environmental Certification − EIA, Amendment 1 and 2 − EIA Amendment 3 – under evaluation ● Mine permit − Authorization for construction and operation and amendments − Amendment 2 – under development ● Permits for Plant and TMF − Authorization for construction and
Slide 7: Anti-Fatigue and Collision Project
Anti-Fatigue and Collision Project 1:40 am …. Operator is tired … … Potential safety event!. 7
Slide 8: Anti-Fatigue and Collision Project
Anti-Fatigue and Collision Project Objective and background: To reduce the probability of fatigue and collision events through the use of technology Constancia Mine Collision & Fatigue Events 8 7 Number of Events 6 5 4 3 2 1 0 2016 2017 2018 Collision 4 6 4 Fatigue 1 1 Total 5 7 4 Historically more
Slide 9: Anti-Fatigue and Collision Project
Anti-Fatigue and Collision Project Alternatives – Non-invasive: Hexagon SafeMine and FatigueMonitor Safe Mine (CAS) Fatigue Monitor Primary function of a fatigue system: Surrounding Awareness Collision Avoidance Wake-up alarm in case of micro sleep to avoid immediate danger for operator and equipmen
Slide 10: Anti-Fatigue and Collision Project
Anti-Fatigue and Collision Project Alternatives – Non-invasive: GuardVant’s Safe Mine and Fatigue Monitor Collision Guard Op Guard Using peer to peer communication between equipment, Collision Guard increases awareness of Sound alarm and seat the situation by showing the location of any other vibrat
Slide 11: Corporate Affairs & Social Responsibility
CORPORATE AFFAIRS & SOCIAL RESPONSIBILITY
Slide 12: Government and Community Institutions
Government and Community Institutions • We work with all levels of Government and the Communities to develop stable operations and to maximize the impact of our social investment in our area of influence and beyond Level Applicable Area Election Next Election New Term Start Frequency Date National P
Slide 13: Local Political Context
Local Political Context On October 7th there will be elections for regional 11 Candidates for Mayor of During Q1 and Q2 2018 Hudbay has Governors and local Chumbivilcas, 11 for signed specific agreements with mayors Livitaca, 7 for Chamaca, municipalities of Velille and Chamaca and 7 for Velille Liv
Slide 14: Mining Properties Near Constancia
Mining Properties Near Constancia MINERAL PROPERTIES WITHIN TRUCKING DISTANCE OF CONSTANCIA PROCESSING FACILITY • Exploration work to be conducted on newly acquired properties near Constancia with potential to provide higher-grade feed to the Constancia mill post-Pampacancha Maria Reyna Caballito Co
Slide 15: Pampacancha: Negotiation Status
Pampacancha: Negotiation Status • On June 10th the technical committee submitted a written report to the Steering Committee of Chilloroya • On July 5th an ordinary assembly was held in Chilloroya Pampacancha discussions were tabled • The assembly plans to resume discussions with respect to Pampacanc
Slide 16: Exploration Properties: Negotiation Status
Exploration Properties : Negotiation Status Maria Reyna, Caballito, Kusiorcco • Uchucarcco: Has agreed to commence negotiations • Qquehuincha: Ongoing process to conclude negotiation of exploration agreement for 3 years • Añahuichi: Ongoing dialogue to start negotiation of exploration agreement for
Slide 17: Mine Operations Review
H' DBAY MINE OPERATIONS REVIEW
Slide 18: Physicals – H1 and Q2 2018
Physicals – H1 and Q2 2018 2018 2017 2018 2017 2018 2017 MINING PHYSICALS Δ% Δ% Δ% H1 H1 Q2 Q2 Q1 Q1 Ore Mined Kt 18,234 14,551 ▲ 25% 8,744 7,338 ▲ 19% 9,490 7,213 ▲ 32% Waste Mined Kt 17,741 12,628 ▲ 40% 9,900 6,617 ▲ 50% 7,841 6,011 ▲ 30% Rehandle Kt 1,464 767 ▲ 91% 766 280 ▲ 174% 698 487 ▲ 43% Ma
Slide 19: YTD 2018 Mining Reconciliation
YTD 2018 Mining Reconciliation • Blue areas are forecast production for 2018; red are YTD actuals • Actual production is 93% consistent with mine plan 19
Slide 20: Long-term Model Reconciliation
Long-term Model Reconciliation • Over a period of 10 months, the 2018 LTP Model used for reserves reporting reconciles with actual production within +/-15% for all the elements except Zn • The Au and Mo grade are conservative (-14% and -10% respectively). The performance of the 2018 LTP model for th
Slide 21: Mine Operations
H' DBAY MINE OPERATIONS
Slide 22: Instrumentation and Monitoring - PIT
Instrumentation and Monitoring - PIT ZCG 08 Total Geotechnical Instrumentation - Constancia Pit April 2018 Number of Instrumentation Total instruments instruments Prisms 35 Extensometer 1 Radar Slope (*) 1 60 Piezometers Open Stand Pipe 21 Phase II Vibrating Wire Piezometers 2 (*) Currently in tests
Slide 23: Instrumentation and Monitoring - WRF
Instrumentation and Monitoring - WRF Total Geotechnical Instrumentation - WRF June 2018 Instrumentation Number of instruments Total instruments Prisms 25 Piezometers Open Stand Pipe 4 Vibrating Wire Piezometers 7 39 Settlement Cells 1 Pressure Cells 1 Inclinometer 1 WRF PVW-18-05 Nv 4220 Nv 4180 Nv
Slide 24: Instrumentation and Monitoring - TMF
Instrumentation and Monitoring - TMF Total Geotechnical Instrumentation - TMF June 2018 Instrumentation Number of instruments Total instruments Legend Prisms 22 Prisms Inclinometer (*) 2 Inclinometer Vibrating Wire Piezometers (*) 167 195 Parshall Flume Parshall Flume 2 Accelerographs Accelerographs
Slide 25: Mine Operations: Improvement Initiatives
MINE OPERATIONS: IMPROVEMENT INITIATIVES
Slide 26: Mine Maintenance
Mine Maintenance CAT 793F ENGINE LIFE EXTENSION • Objective: To increase truck engine life in Constancia operations CAT has agreed to increase truck engine PCR from 16,000 to 18,000 hrs. Decision is supported by historical data, conditions monitoring, world class maintenance practices, favourable ha
Slide 27: Mine Maintenance
Mine Maintenance COMPONENT CHANGE PLAN BASED ON CONDITION MONITORING • Objective: Detecting the best moment to change components before failures but normally after the PCR, increasing life for components while controlling safety for the equipment and people Constancia Mine brakes for Wheels and Fina
Slide 28: Tire Retread for Trucks
Mine Maintenance TIRE RETREAD FOR TRUCKS • Objective Increasing life of truck tires. Improves cost per hour ratio by approximately 20% 28
Slide 29: Geotechnical & Hydrogeology
Geotechnical & Hydrogeology 1. IMPLEMENTATION OF RADAR SYSTEM: RADAR REUTECH IN CONSTANCIA BENEFITS: • "Real time monitoring" (24/7) and alarm system according to threshold • Key for failure prediction • In June 2018 radar monitoring tests started in the pit using REUTECH and IBIS technologies (3 mo
Slide 30: Geotechnical & Hydrogeology
Geotechnical & Hydrogeology 2. IMPLEMENTATION OF MAPPING BY DRONE (UAV) • Mapping deposit sites • Exploring for minerals • Monitoring stockpile volumes • Tracking equipment • Time-lapse photography MAPPING AND ANALYSIS WITH • 3D visualization of blocks in real space • Volume in m3 or Mass in kgs • S
Slide 31: Geotechnical & Hydrogeology
Geotechnical & Hydrogeology 3. IMPLEMENTATION OF THE TELEMETRIC SYSTEM: G14 G18 G7 G20 G7 G5 G10 G21 G25 G19 G16 BENEFITS: • Acquisition and reporting of data in real time • Remote switch on/off of Electrical Boards • Fault detection and error alarm • Custom software, achieving autonomous processes
Slide 32: Geotechnical & Hydrogeology
Geotechnical & Hydrogeology 4. INTEGRATION FOR GEOTECHNICAL INSTRUMENTATION SHMS (Slope Health Monitoring System)- QSI • Improves the processing time and analysis of Geotechnical and Hydrogeological instrumentation data • Real-time integrated alerts for all the instrumentation, which will arrive by
Slide 33: Mine Planning
Mine Planning IMPLEMENTED USE OF NSR IN MINE POLYGONS Optimizes the NSR value of ore mine polygons, to provide the best feed to the crusher Improves quality of ore concentrate by limiting the levels of contaminants (Zn, Pb) MINE - PROCESSING PLANT INTEGRATION Provides real time Mine to Crusher
Slide 34: Mine Operations: Layouts
H' DBAY MINE OPERATIONS: LAYOUTS
Slide 35: Current General Overview
Current General Overview H' DBAY “Syl at 7 oT S : y Constancia ba! be, - Pit \ = it s ‘ % o < _ ; / AS % : ees Pampacancha West -~. Pit SO Waste Rock _ a arr ee Facility “4 a f dl —— Ne us ee a —/ / Y \ : sas at : é } “hy Current ff A, i 7 e gq " Tailings Me SIS og any Management ‘Sy ‘a Facility 4 a
Slide 36: TMF 2018, YTD & FY
TMF 2018, YTD & FY • Source of suitable material: • Pit Phase VII and II • Destination: • Ramps • TMF Embankment Actual Jan to Jun: 6.3 Mt Forecast Jul to Dec: 5.5 Mt West Dam, AA’ Section East Dam, BB’ Section 36
Slide 37: Process Plant
H' DBAY PROCESS PLANT
Slide 38: Production KPIs 2018
Production KPIs 2018 H' DBAY PRODUCTION Ore Treatment KT 15,578 13,249 |4 18% 7,727 6932 |4 11% 7,851 6318 | 4 Throughput DMT/Day] 91,803 83,258 | & 10% 92,640 86,305 | & 7% 90,980 80,150 | Cu Head Grade % 0.47 0.54 Vo 12% 0.44 0.53 VY -18% 0.50 0.54 vo -7% Cu Recovery % 80.25 80.36 |¥ 0% 79.71 8055
Slide 39: Production KPIs Q2 – Gold and Silver
Production KPIs Q2 – Gold and Silver 2018 2017 2018 2017 2018 2017 PRODUCTION H1 H1 Δ% Q2 Q2 Δ% Q1 Q1 Δ% Au Head Grade g/tonne 0.05 0.041 ▲ 23% 0.05 0.038 ▲ 31% 0.05 0.044 ▲ 15% Au Recovery % 44.90 44.67 ▲ 1% 44.80 44.84 ▼ 0% 44.90 44.51 ▲ 1% Ag Head Grade g/tonne 4.01 4.08 ▼ -2% 3.92 3.91 ▲ 0% 4.10
Slide 40: Cumulative Treatment
Cumulative Treatment Cumulative Treatment Cumulative Cumulative 35,000 Q1 Q2 Treatment (KT) Treatment (KT) Actual 7,851 Actual 7,727 30,000 Budget 7,763 Budget 7,497 Variation 1.1% Variaton 3.1% 25,000 20,000 KT 15,000 10,000 5,000 0 October June April January February May November March July August
Slide 41: Mechanical Availability
Mechanical Availability QUARTER Q1 Q2 Q3 Q4 FY MONTH JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 2018 Actual Availability (%) 95.8 99.5 93.4 96.3 81.6 97.7 Forecast (%) 96.0 95.5 96.0 95.8 81.5 96.7 95.2 96.8 95.0 96.8 86.0 96.0 94.0 Budget Availablity (%) 96.0 95.5 96.0 95.8 83.2 95.8 96.0 96.0
Slide 42: 2018 Implemented Improvements
2018 IMPLEMENTED IMPROVEMENTS
Slide 43: 2018 Implemented Improvements
2018 Implemented Improvements Description Progress 1. Mine to Plant 100% 2. On-line analyzers PSI 300 100% 3. On-line analyzers Courier 6 ISL 100% 4. Split cameras in crushing bays and Belt CV01 (On-line granulometry) 100% 5. Met Rock cameras (SAG mill feed granulometry) 100% 6. Changed SGS expert s
Slide 44: Location of Implemented Improvements
Location of Implemented Improvements 4 8 CHANCADORA PRIMARIA 1 9 1 2 FEEDER 001 3 16 FAJA TRANSPORTADORA CV 001 STOCK PILE 4 FLOTACION ROUGHER BULK 6 ESPESADOR DE 42 RELAVES ALIMENTADORES 2 3 5 15 NIDO DE CICLONES 6 FLOTACION 17 REMOLIENDA ROUGHER BULK REMOLIENDA DE COBRE 7 18 MOLINO DE REMOLIENDA P
Slide 45: Metallurgical Projects
H' DBAY METALLURGICAL PROJECTS
Slide 46: Metallurgical Projects
Metallurgical Projects • Several metallurgical initiatives are being implemented with the intention of supporting us in getting copper recoveries up to the levels forecast in our latest 43-101 Technical Report for Constancia, dated March 29, 2018: 1. ProFlote Magnets 2. Jameson Cell 3. HydroFloat Ce
Slide 47: Location of Metallurgical Projects
Location of Metallurgical Projects HYDROFLOAT PROFLOTE MAGNETS (For Extracoarse) (ALTERNATIVE 1) FEED SV S S S S S S L1 COPPER JAMESON CELL ROUGHER FLOTATION CLEANER SCALPER (For Ultrafines) FEED SV S S S S S S L2 COPPER JAMESON CELLS ROUGHER FLOTATION FINAL CONCENTRATE COPPER CLEANER 1 LL FLOTATION
Slide 48: ProFlote Magnets
ProFlote Magnets • Intended Benefit: By aggregating fine particles by magnetic force, ProFlote magnets are intended to recover metal from ultrafine particles (less than 20 microns) that may otherwise end up in tailings • Timeline: Location of magnets currently under evaluation; installation expected
Slide 49: Jameson Cell
Jameson Cell • Intended Benefit: Technology intended to allow removal of liberated and fast floating minerals to final concentrate, reducing load in downstream circuit • Timeline: Jameson cell sizing performed in May 2018; engineering expected to be completed by end of August 2018 49
Slide 50: HydroFloat Cell
HydroFloat Cell • Intended Benefit: By using an aeration system to disperse fine bubbles into a fluidized-bed environment, HydroFloat is intended to improve the selective recovery of extracoarse particles (greater than 140 microns) by applying flotation fundamentals to gravity separation • Timeline:
Slide 51: CiDRA
CiDRA • Particle Size Tracking (PST) (On-line granulometric analysis per cyclones in regrinding; three sizes) • PST is made up of a set of sensors, a junction box and a computer in the control room • The set of sensors consists of a reinforced probe in contact with the overflow and a set of integrat
Slide 52: Air Evaluation
Air Evaluation EVALUATION OF SUCTIONED AIR • Sampling campaign was performed (two days of sampling with open vent (ON) during four hours, followed by closed vent (OFF) for another four hours, successively) • Results of the evaluation of the Rougher flotation circuit (ON-OFF), in Line 01 • In general
Slide 53: Air Evaluation: Results
Air Evaluation: Results H' DBAY CuT% Metallurgical Recovery in fine particles - Mesh 400 Mo% Metallurgical Recovery in fine particles - Mesh 400 100 100 30 gos : 3 >? g $ 60 x 90 g 50 3 ¥ 40 3 30 85 2° 20 10 80 0 ON OFF ON OFF ON OFF ON OFF ON OFF ON OFF SAMPLE 1 SAMPLE 2 SAMPLE 1 SAMPLE 2 Au% Metal
Slide 54: For More Information Contact
FOR MORE INFORMATION CONTACT: Carla Nawrocki, Director, Investor Relations 416.362.7362 | carla.nawrocki@hudbay.com