Slide 1: Constancia Mine Site Visit
ACCORDING TO PLAN CONSTANCIA MINE SITE VISIT September 2014
Slide 2: Cautionary Information
Cautionary 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
Slide 3: Cautionary Information (continued)
Cautionary Information (continued) Forward Looking Information (continued) The risks, uncertainties, contingencies and other factors that may cause actual results to differ materially from those expressed or implied by the forward-looking information may include, but are not limited to, the developm
Slide 4: Cautionary Information (continued)
Cautionary Information (continued) The scientific and technical information in respect of Hudbay contained in this presentation related to the Constancia project has been prepared by or under the supervision of Cashel Meagher, P.Geo., Hudbay’s Vice President, South America Business Unit. The scienti
Slide 5: Table of Contents
Table of Contents 1. Project Overview 2. Project Management 3. Mine Operations 4. Human Resources Staffing & Training 5. Corporate Affairs & Social Responsibility 6. Exploration Appendix CONSTANCIA PRESENTATION l 5
Slide 6: Project Overview
Project Overview 1 CONSTANCIA PRESENTATION l 6
Slide 7: Project Timeline & History
Project Timeline & History Aug 2014 Powerline Jul 2011 Apr 2012 Aug 2013 energized Hudbay acquires Initial resource Aug 2012 Updated capital Constancia announced at Hudbay’s board cost estimate Apr 2014 Q2 2015 Nov 2010 higher grade approves indicates All critical Expected ESIA permit Pampacancha co
Slide 8: Construction Progress
Construction Progress 2013 Over 16 million man- PERU hours without lost time accident recently Lima achieved Constancia Project ~85% complete as at June 30, 2014 2014 On track for first production in Q4 2014, commercial production in Q2 2015 CONSTANCIA PRESENTATION l 8
Slide 9: Location & Infrastructure
Location & Infrastructure 83km access road from Yauri > Upgraded for concentrate haulage post commissioning Tintaya power substation 70km away > Construction of power transmission line from Tintaya complete and was energized in August 2014 > Socabaya to Tintaya 220kV transmission line upgrade is com
Slide 10: Key Project Metrics
Key Project Metrics > The March 2014 reserve update incorporated an expected tailings facility expansion allowing for the conversion of a portion of the mineral resources into reserves, resulting in a mine life extension to 22 years (from 16 years) Ownership 100% Mine life 22 years Daily ore through
Slide 11: Flow Sheet
Flow Sheet CONSTANCIA PRESENTATION l 11
Slide 12: Project Management
Project Management 2 CONSTANCIA PRESENTATION l 12
Slide 13: Safety Share
Safety Share Lightning Protection at Constancia Richard Kithil, President, National Lightning Safety Institute (NLSI) LIGHTNING PROTECTION FOR FACILITIES, OPERATIONS & PERSONNEL > NLSI Lightning Protection Defenses Template > Grounding, Bonding & Surge Protection > Air Terminals, other forms of prot
Slide 14: Project Summary
Project Summary Project has US$1.4 billion incurred PERU and has committed an additional PERU US$0.2 billion as of June 30, 2014 Lima Lima Highlights: Constancia Constancia > Project approximately 85% complete as at June 30, 2014 > Structures in place for water capture, 2015 dry season > Mine pre-st
Slide 15: Orientation from Site Visit
Orientation from Site Visit 2 1 3 4 AREA 4 TEMASEK PRESENTATION l 15 CONSTANCIA PRESENTATION l 15
Slide 16: External Partners
External Partners Stratcon GyM – Mining Contractor and Major Earth Works > Established labour force and operating team > Experience operating in Peru (Toromocho, El Brocal, Marcona, La Arena) > Constancia earth works responsibilities include: bog dam, TMF East and West, WRF and ponds, main sediment
Slide 17: Heavy Civil Works and Mining
Heavy Civil Works and Mining TEMASEK PRESENTATION l 17 CONSTANCIA PRESENTATION l 17
Slide 18: Heavy Civil Works and Mining Milestones
Heavy Civil Works and Mining Milestones > Tailing liner well under way and toe dam in progress > Water capture initiated Dec 2013 in main sediment pond > Mine pre stripping started in Mar 2014, on schedule for Q4 start-up Pre-stripping activities Main sediment pond CONSTANCIA PRESENTATION l 18
Slide 19: Pre-Stripping Progress
Pre-Stripping Progress > Approximately 19 million tonnes of Month Waste (tons) Ore (tons) Total (tons) material moved to-date March 531,976 531,976 > Approximately 400k tonnes of ore on April 2,357,194 2,357,194 the ROM pad May 3,479,965 3,479,965 June 4,305,408 4,305,408 July 3,848,495 434,205 4,28
Slide 20: Heavy Civil Scope of Work
Heavy Civil Scope of Work Facilities List • Bog Dam • TMF East • TMF West • WRF and Ponds • Main Sediment Pond • Topsoil Stockpile • Haul Road • Access Roads • Diversion Channels • Landfill Area TEMASEK PRESENTATION l 20 CONSTANCIA PRESENTATION l 20
Slide 21: Site Water Management
Site Water Management TEMASEK PRESENTATION l 21 CONSTANCIA PRESENTATION l 21
Slide 22: Process Plant Engineering, Procurement and Construction Management
Process Plant Engineering, Procurement and Construction Management TEMASEK PRESENTATION l 22 CONSTANCIA PRESENTATION l 22
Slide 23: Process Plant Construction - Current Status
Process Plant Construction - Current Status > Engineering is substantially complete and procurement is at 93% complete > In the primary crusher area, crusher and the modules of the reclaim conveyors to the grinding area are being completed > SAG and ball mill shells and heads are 100% assembled, inc
Slide 24: Offsite Infrastructure & Services
Offsite Infrastructure & Services TEMASEK PRESENTATION l 24 CONSTANCIA PRESENTATION l 24
Slide 25: Power
Power Power Transmission Line > Engineering and procurement are 100% complete, tie in to high voltage side of substation was completed in April, tower construction is 100% complete > Successful negotiations with Glencore Tintaya for ROW agreement > System was energized in August 2014 Power Supply >
Slide 26: Concentrate Transport
Concentrate Transport > Route from Constancia to Matarani is 460 kms total > Proposals have been received and reviewed 4 transport companies – trucking firms have lowest rate > Final contract negotiations underway and contract expected to be awarded in Q3 2014 > Service start date of Dec 2014 > Pote
Slide 27: Port Services
Port Services TISUR – Port Operator Under concession from the State Facilities & Expansion plans TISUR Grain Warehouse A5 > Enclose for concentrate service to capacity of 25,000 wmt Expansion Options > Discussions with Ares warehouse for addition capacity TEMASEK PRESENTATION l 27 CONSTANCIA PRESENT
Slide 28: Plant Commissioning
Plant Commissioning TEMASEK PRESENTATION l 28 CONSTANCIA PRESENTATION l 28
Slide 29: Commissioning Stages
Commissioning Stages C0 Verification by the construction team that Verification of Plant the installation of an individual item of and Equipment plant or equipment meets the design intent. Responsibility Construction Team TEMASEK PRESENTATION l 29 CONSTANCIA PRESENTATION l 29
Slide 30: Commissioning Stages
Commissioning Stages C0 C1 Verification of Plant Dry Commissioning and Equipment C0 Checksheets + Punch lists Inspection and no-load energisation of an item of plant or equipment by the commissioning team to verify conformance with design. Responsibility Construction Team TEMASEK PRESENTATION l 30 C
Slide 31: Commissioning Stages
Commissioning Stages C0 C1 C2 Verification of Plant Dry Commissioning Wet Commissioning and Equipment C0 C1 Checksheets Checksheets + Punch lists + Punch lists Testing of an individual or group of integrated items of plant or equipment under benign load (air or water) ultimately demonstrating stable
Slide 32: Commissioning Stages
Commissioning Stages C0 C1 C2 Verification of Plant Dry Commissioning Wet Commissioning and Equipment C0 C1 Checksheets Checksheets + Punch lists + Punch lists C2 Checksheets + Practical Completion Certificate Initial introduction of ore and process fluids and testing of an individual or group C3 of
Slide 33: Commissioning Stages
Commissioning Stages C0 C1 C2 Verification of Plant Dry Commissioning Wet Commissioning and Equipment C0 C1 Checksheets Checksheets + Punch lists + Punch lists C2 Checksheets + Practical Completion Certificate C5 C4 C3 Area Acceptance Performance Ore Commissioning Verification Completion of all comm
Slide 34: Projected Ramp-up vs. Antapaccay
Projected Ramp-up vs. Antapaccay > The near-by Antapaccay mine recently commenced production and has similar size and flowsheet to Constancia (direct comparable) > Projected 9-month ramp-up at Constancia is more conservative than actual ramp- up achieved at Antapaccay Ore Grinding Ramp-up 120 104 10
Slide 35: Project Closure Planning – De-mobilization
Project Closure Planning – De-mobilization > Effective and efficient handover of documentation – data > information > knowledge > Closeout of punch lists – defects, warranty issues, early life failures and incomplete work > Commissioning and operational ramp-up – roles and responsibilities > Multipl
Slide 36: Mine Operations
Mine Operations 3 CONSTANCIA PRESENTATION l 36
Slide 37: Annual Tonnage Movement
Annual Tonnage Movement Annual Total Movement 80,000,000 70,000,000 60,000,000 Tonnage 50,000,000 40,000,000 30,000,000 20,000,000 10,000,000 0 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 Crusher Waste Dump Rehandle CONSTANCIA PR
Slide 38: Haulage Network
Haulage Network Constancia Project - General Flowsheet of Haulage Network Constancia Pit 6.6 Km 7.0 Km 3.3 Km 2.9 Km WRF PAG/NAG 4.4 Km 2.5 Km 2.5 Km 2.5 Km 2.4 Km Process Plant 2.4 Km 2.4 Km 4.5 Km Hi Zn SP HG SP MG SP 5.6Km Copper Concentrate NAG SP 6.7Km PORT 9.3 Km Molybdenum Concentrate 5.0 Km
Slide 39: Mine Equipment
Mine Equipment Mine Equipment Requirement 40 90 U 35 80 T n o i 70 n t 30 n s a 60 g o 25 e f 50 x E 20 q 40 m u i 15 i 30 l p l m 10 o e 20 n n t 5 10 0 0 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 Truck - CAT 793F Drill Rig -
Slide 40: 1. Mine Planning – MTP (2014-2015)
1. Mine Planning – MTP (2014-2015) CONSTANCIA PRESENTATION l 40
Slide 41: Mine Operation – Drilling & Blasting
Mine Operation – Drilling & Blasting Pit Viper 271 • Average blast hole length (m): 15.8 • Blast hole diameter (inch): 9 7/8 • Instant Drilling Speed (m/h): 81 • Average Drilling Speed (m/h): 55 • Mechanical Availability (%): 95 • Utilization (%): 86 • Burden (m): 8 • Spacing (m): 9 • Stemming (m):
Slide 42: Mine Operation - Loading
Mine Operation - Loading Hitachi EX-5600 • Bucket capacity (m3): 27 • Equipment performance (tph): 3,364 • Mechanical Availability (%): 94 • Utilization (%): 95 CAT 994 H • Bucket Capacity (m3): 19 • Equipment performance (tph): 1,764 • Mechanical Availability (%): 94 • Utilization (%): 97 CONSTANCI
Slide 43: Mine Operation - Hauling
Mine Operation - Hauling CAT 793 F • Max gradient (%): 10 • Rolling Resistance (%): 2-4 • Payload (t): 227 • Equipment performance (tph): 510 • Mechanical Availability (%): 86 • Utilization (%): 85 CONSTANCIA PRESENTATION l 43
Slide 44: Mine Geology: Ore Control Routine – Sampling & Logging BH
Mine Geology: Ore Control Routine – Sampling & Logging BH Blasthole Sampling Blasthole logging Pit Face Mapping Database Validation CONSTANCIA PRESENTATION l 44
Slide 45: Weekly Plan – Polygons by Destination
Weekly Plan – Polygons by Destination (Bench 4335- 4350) 4350 4335 MATPS: Pre-Stripping Material CONSTANCIA PRESENTATION l 45
Slide 46: Mine Maintenance Reconciliation
Mine Maintenance Reconciliation CODIGO EQUIPO Item AMT MIÉ JUE VIE SÁB DOM LUN MAR HORAS DE DETALLE DE LAS DESVIACIONES HORAS REALES 20 21 22 23 24 25 26 INTERVENCION EQUIPOS DE OPERACIÓN 1 PE-C0001 250 12 Horas 8 Horas Se reprograma el cambio de parabrisas 2 PE-C0002 125 1 Horas 1.5 Horas OK 6 CF-C
Slide 47: Mine Maintenance KPI´s
Mine Maintenance KPI´s CONSTANCIA PRESENTATION l 47
Slide 48: 3. G&H: Geotechnical Work
3. G&H: Geotechnical Work PIT OPERATIONAL WORK NAG OPERATIONAL WORK Panoramic view of bench 4425 – 4410, Constancia Pit. A Section A–A: View of The current discharge achieved angles on the WRF – NAG is versus design been developed to angles. The form the final lifts 4140 achieved angles and 4160, an
Slide 49: Water Management Plan
Water Management Plan Panoramic View Actual - WRF CONSTANCIA PRESENTATION l 49
Slide 50: Human Resources Staffing & Training
Human Resources Staffing & Training 4 CONSTANCIA PRESENTATION l 50
Slide 51: Operations Management
Operations Management Operations Director Eric Caba 23 yrs / Metallurgical Engineer Technical Services Process Plant Health & Safety Logistics & HR Mine Environmental Manager Manager Manager Admin Manager Superintendent Manager Manager Javier Toro Hugo Granados Felix Galvez John Cederberg Jose Bandi
Slide 52: Process Plant
Process Plant Operations Director Eric Caba 23 yrs / Metallurgical Engineer Administrative Assistant Vacant Process Plant Manager Hugo Granados 35 yrs/ Metallurgical Engineer Metallurgical Electrical/Instrumental Mechanical Maintenance Production Tailing Superintendent Superintendent Superintendent
Slide 53: Master Plan for Staffing & Training
Master Plan for Staffing & Training “The objective is to have the right person for the right job at the right time, and well trained” NOV 2014 TRAINING • Train the Trainers: train staff in safety, READY TO START STAFFING FOR technical and • 100% of positions OPERATIONS leadership duly fit Recruit co
Slide 54: Workforce Planning Forecast
Workforce Planning Forecast 280 269 HeadCount Planning Forecast 260 September 2014 250 19 240 27 223 220 200 61 180 162 160 137 25 140 133 4 119 121 12 117 195 250 120 2 2 104 13 98 100 6 11 134 80 105 109 89 91 93 70 76 60 59 40 20 28 28 28 28 28 28 28 28 28 0 0 Jan '14 Feb '14 Mar '14 Apr '14 May
Slide 55: Total Site Staffing 2014 - Including Contractors
Total Site Staffing 2014 - Including Contractors Manpower will significantly decline over the coming months as contractors are being demobilized Total Site Staffing 6,000 5,000 4,000 3,000 2,000 1,000 - CONSTANCIA PRESENTATION l 55
Slide 56: Recruitment Schedule 2014
Recruitment Schedule 2014 Start # of Effective Hire Area / Positions Priority Recruitment Colleagues to Month Process Recruit Technical Services & Commissioning P0 Nov-13 Jan-14 11 Superintendent / Commissioning P0a Dec-13 Feb-14 6 SAP & Commissioning P1 Dec-13 Mar-14 13 Supervisors P2 Jan-14 Apr-14
Slide 57: Training Strategy
Training Strategy Ensure the successful of the start up of the plant process, training our colleagues since the beginning, using our own resources, their knowledge, and giving the opportunity to develop our people, and creating our own Hudbay mind-set > Focus in safety, technical & leadership skills
Slide 58: Training Schedule
Training Schedule Hire for Hire for Commissioning Commissioning Hire for & SAP & SAP Hire for Process Plant Commissioning Commissioning Maintenance Maintenance Construction Phase (2) Phase (13) Phase (14) Start the hiring for Operations (115), based on the schedule Phase (3) Completed Jan - May June
Slide 59: Corporate Affairs & Social Responsibility
Corporate Affairs & Social Responsibility 5 CONSTANCIA PRESENTATION l 59
Slide 60: Permitting (1/2)
Permitting (1/2) CONSTRUCTION • PERMITS FOR CONSTRUCTION ARE IN PLACE: • Earthmoving activities, process plant and ancillary facilities, TMF, camps, 4% MSP, WRF and collection and retention ponds, NAG stockpile, topsoil stockpiles, sediment ponds, haul and access roads and Cunahuiri 10% reservoir. •
Slide 61: Permitting (2/2)
Permitting (2/2) RISK DESCRIPTION / ACTIONS • DUE TO LACK OF ACCESS TO ICHUNI VALLEY, A CONTINGENCY PLAN (CP) WAS DEVELOPED IN ORDER TO MITIGATE the lack of the Cunahuiri reservoir and the possibility to capture water therein for operations and compensation. CUNAHUIRI • CP poses a risk because it ch
Slide 62: Resettlement: Ichuni
Resettlement: Ichuni NEGOTIATION # of PROCESS families Public deed signed 34 In negotiation 2 Total: 36 # of HOUSING STATUS houses Delivered-To-Owner 32 Pending Delivery 0 Total: 32 CONSTANCIA PRESENTATION l 62
Slide 63: Local Employment and Procurement
Local Employment and Procurement LABOR FORCE ˃ 727 workers from direct & indirect area of Influence CONTRACT OF RENTAL EQUIPMENT BY COMMUNITIES ˃ Chiloroya: 223 ˃ Uchucarco: 164 FOOD SUPPLIERS IN OPERATION CONTRACT SERVICE ˃ 9 from Uchucarco ˃ 4 from Chilloroya CONSTANCIA PRESENTATION l 63
Slide 64: 2013 Business Invoicing to Project
2013 Business Invoicing to Project Rent a Car- Equipment and Heavy Equipment Rent a Car Food Services S/. 30,703,201 S/. 10,022,381 S/. 2,988,900 S/. 2,443,488 Chilloroya Uchuccarcco CONSTANCIA PRESENTATION l 64
Slide 65: 2014 Business Invoicing to Project (1/2)
2014 Business Invoicing to Project (1/2) Rent a Car- Equipment and Heavy Equipment S/. 6,000,000 S/. 5,000,000 S/. 4,000,000 S/. 3,000,000 S/. 2,000,000 S/. 1,000,000 S/. 0 Jan Feb Mar Apr Chilloroya Uchuccarcco CONSTANCIA PRESENTATION l 65
Slide 66: 2014 Business Invoicing to Project (2/2)
2014 Business Invoicing to Project (2/2) Food Services S/. 450,000 S/. 400,000 S/. 350,000 S/. 300,000 S/. 250,000 S/. 200,000 S/. 150,000 S/. 100,000 S/. 50,000 S/. 0 Jan Feb Mar Apr May Jun Chilloroya Uchuccarcco CONSTANCIA PRESENTATION l 66
Slide 67: Demobilization
Demobilization 637 local workers have been demobilized (January – August 2014) EQUIPMENT AND MACHINERY DEMOBILIZED Un- Owned Rented External TOTAL registered Heavy equipment 9 16 7 77 109 Light equipment 22 10 7 34 73 Machinery- yellow line 5 4 4 25 38 CONSTANCIA PRESENTATION l 67
Slide 68: Grievance Process
Grievance Process Grievance Management Count of status (percentage) Risk of Harm Number of complaints and grievances Closed/ Processing Permanent monitoring 5% 76 3% 52 209 Closed case Grand Total: 337 92% CONSTANCIA PRESENTATION l 68
Slide 69: Agreements: Local & Regional Governments
Agreements: Local & Regional Governments With Cusco Regional Government and Provincial Municipality of Chumbivilcas To finance the new Hospital of Chumbivilcas’ feasibility studies With District of Chamaca To finance three projects approved as a conclusion of the Dialogue & Development Roundtable Wi
Slide 70: Agreements with National Government
Agreements with National Government Ministry of Development & Social Inclusion, and Cusco Regional Government To fully finance the “Development of Competences for Young People in Chumbivilcas” project, to support them to improve their capacities in the transition stage between secondary education an
Slide 71: Agreements with Other Institutions
Agreements with Other Institutions Asociación Vida Peru To manage donations of medicines, medical equipment, educational materials and other goods, and to finance all the logistics that is necessary for the distribution of these goods among the poorest health centers and communities of our area of i
Slide 72: Exploration
Exploration 6 CONSTANCIA PRESENTATION l 72
Slide 73: Prolific Belt Provides Opportunities
Prolific Belt Provides Opportunities CONSTANCIA PRESENTATION l 73
Slide 74: Aeromagnetic Survey Map
Aeromagnetic Survey Map • Total Cost: $ 582,194 • Time: 26 days • Area-Km2: 3,197.50 • Line-Km: 7,219.20 CONSTANCIA PRESENTATION l 74
Slide 75: Appendix
Appendix CONSTANCIA PRESENTATION l 75
Slide 76: Current Schedule
Current Schedule 2011 2012 2013 2014 2015 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Permitting Mine Permit Front End Engineering Design Construction Camp Procurement Community Agreements Board Approval Power Line TMF and WRF Plant Commercial Commissioning and Ramp Up Production Q2
Slide 77: Access Road Map
Access Road Map Hudbay access road Las Bambas access road CONSTANCIA PRESENTATION l 77
Slide 78: Peru Reserves Overview
Peru Reserves Overview As at January 1, 2014 Constancia Mineral Reserves Category Ore (M tonnes) Cu (%) Mo (g/t) Au (g/t) Ag (g/t) Proven 483 0.32 93 0.040 3.04 Probable 94 0.22 61 0.036 2.77 Pampacancha Mineral Reserves Category Ore (M tonnes) Cu (%) Mo (g/t) Au (g/t) Ag (g/t) Proven 23 0.52 142 0.
Slide 79: Peru Resources Overview
Peru Resources Overview As at September 30, 2013 Constancia Mineral Resources Category M (tonnes) Cu (%) Mo (g/t) Au (g/t) Ag (g/t) Measured 68 0.22 59 0.036 2.17 Indicated 293 0.20 58 0.033 1.96 Inferred 200 0.19 51 0.031 1.86 Pampacancha Mineral Resources Category M (tonnes) Cu (%) Mo (g/t) Au (g/
Slide 80: Peru Reserves and Resources Information
Peru Reserves and Resources Information 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 R
Slide 81: Precious Metals Stream Overview
Precious Metals Stream Overview US$750 million in upfront deposit payments from Silver Wheaton for delivery of: 100% of payable gold and silver from 777 mine until the end of 2016; and 50% of payable gold and 100% of payable silver thereafter for the remainder of life of mine 100% of payable s
Slide 82: Constancia Mine Site Visit
ACCORDING TO PLAN CONSTANCIA MINE SITE VISIT September 2014