Hudbay Minerals Inc · TSX:HBM
Hudbay Minerals — Conference Presentation (March 2021)
55 slides from Hudbay Minerals's conference presentation, March 2021
Slide 1: Investor Presentation
I N V E S T O R P R E S E N TAT I O N March 2021
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: Diversified Mid-Tier Copper Producer
DIVERSIFIED MID-TIER COPPER PRODUCER TSX, NYSE, BVL Symbol HBM About Hudbay Market Capitalization1 C$2.7 billion Strong ESG Shares Outstanding2 261 million Performance Available Liquidity3 $724 million Long Life & Debt Outstanding4 $1.2 billion Mining Friendly 20205 20216 Jurisdictions MANITOBA 2% 2
Slide 4: The Hudbay Competitive Advantage
THE HUDBAY COMPETITIVE ADVANTAGE About Hudbay Strong ESG Performance 1 Long life assets located in mining friendly jurisdictions Long Life & Mining Friendly Jurisdictions 2 Proven track record of operational excellence and low cost mines Low Cost & Operational Excellence 3 Focused on free cash flow
Slide 5: Strong Environmental, Social & Governance Performance
STRONG ENVIRONMENTAL, SOCIAL & GOVERNANCE (“ESG”) PERFORMANCE About Hudbay INDUSTRY LEADER IN RESPONSIBLE MINING ENVIRONMENT SOCIAL IMPACT HEALTH & SAFETY GOVERNANCE Strong ESG Performance GHG emissions declined Manitoba COVID-19 relief Constancia has the best Board refreshed in 2019 with fu
Slide 6: COVID-19 Business Response
COVID-19 BUSINESS RESPONSE About Hudbay • Crisis Management Plans were activated in early March with a focus on the health and safety of our colleagues and families, and the Strong ESG communities in which we operate Performance • Business units have developed site-specific measures intended to Long
Slide 7: Long Life Assets Located in Mining Friendly Regions
LONG LIFE ASSETS LOCATED IN MINING FRIENDLY REGIONS 2 Past Production Reserve Life1 M&I Resource Life Inferred Resource Life 3 About Hudbay 4 Strong ESG Constancia 5 17 5 2 Performance Snow Lake 8 18 9 Long Life & 5 Mining Friendly Rosemont 19 11 1 Jurisdictions 777 17 1.5 Low Cost & Operational Exc
Slide 8: Proven Track Record of Operational Excellence & Low Cost Mines
PROVEN TRACK RECORD OF OPERATIONAL EXCELLENCE & LOW COST MINES About Hudbay • Proven track record of achieving or exceeding copper production guidance over the last five years Strong ESG Performance • Hudbay is well-positioned on the cash cost curve Long Life & Mining Friendly • Focus on cost contro
Slide 9: Constancia Mine Continuous Optimization Initiatives
CONSTANCIA MINE CONTINUOUS OPTIMIZATION INITIATIVES About Hudbay • Increasing throughput and quarterly trend in copper recoveries • Continued integration of an automated, advanced process control system Strong ESG • Flotation improvements – optimizing water recovery in the tailings thickener Perform
Slide 10: Manitoba Operations
MANITOBA OPERATIONS LALOR DELIVERED ON 2020 GUIDANCE About Hudbay • The Lalor mine and Stall mill both achieved record quarterly and annual production in 2020 as 777 employees and equipment were redeployed to Lalor during the 777 shaft repair period Strong ESG • Early mining of Lalor gold zones unde
Slide 11: Focused on Free Cash Flow Generation & Prudent Balance Sheet Management
FOCUSED ON FREE CASH FLOW GENERATION & PRUDENT BALANCE SHEET MANAGEMENT About Hudbay • Generated ~$2.2B of EBITDA and ~$650M of free cash flow over the last five years and during the volatile copper price environment due to un-hedged production and stable low-cost profile Strong ESG Performance • Pr
Slide 12: Prudent Capital Allocation
PRUDENT CAPITAL ALLOCATION LEVERAGING EXPERTISE THAT WAS DEMONSTRATED THROUGH BEST IN CLASS About Hudbay DELIVERY OF CONSTANCIA Strong ESG • Successfully constructed Constancia (Peru), Lalor (Canada) and Reed (Canada) mines Performance simultaneously during 2012-2014 Long Life & PAMPACANCHA NEW BRIT
Slide 13: Enhanced Liquidity & Long-Dated Debt Profile
ENHANCED LIQUIDITY & LONG-DATED DEBT PROFILE RECENT TRANSACTIONS DEMONSTRATE PRUDENT BALANCE SHEET MANAGEMENT About Hudbay • May 2020 – entered into a gold forward sale and prepay transaction, generating $115M in cash proceeds to prefund entire capital budget for New Britannia gold mill refurbishmen
Slide 14: Proven Mining Industry Experience
PROVEN MINING INDUSTRY EXPERIENCE LEADING MINE DEVELOPMENT & OPERATING COST PERFORMANCE About Hudbay RAMP-UP FROM FIRST PRODUCTION TO COMMERCIAL Strong ESG • Constancia’s project development and PRODUCTION WAS 3X FASTER THAN THE PEER AVERAGE Performance mine ramp-up was best in class 57 Months Long
Slide 15: Adding Value Through Exploration
PROVEN MINING INDUSTRY EXPERIENCE ADDING VALUE THROUGH EXPLORATION About Hudbay • Hudbay has been successful in significantly increasing the known reserves at both of its flagship Strong ESG operations Performance • Constancia mine reserves have more than doubled since the acquisition in 2011, from
Slide 16: Snow Lake Gold Strategy
SNOW LAKE GOLD STRATEGY About Hudbay PHASE 1: Repositioning PHASE 2: Optimization PHASE 3: Historical Work Lalor as a Gold Mine & Execution Expansion Potential Strong ESG Performance 2008 & 2009 – Au zone and 2018 – Completion of tradeoff 2020 – Optimized mine plan with • Further optimize reco
Slide 17: Constructive Outlook for Copper and Gold
CONSTRUCTIVE OUTLOOK FOR COPPER AND GOLD • Copper prices have rallied to multi-year highs and exceeded $4.00/lb, driven in part by recovery in demand About Hudbay combined with supply disruptions Strong ESG • Long term copper fundamentals remain robust with new end use applications (e.g. EV-driven d
Slide 18: Copper and the Green Economy
COPPER AND THE GREEN ECONOMY COPPER IS A KEY ELEMENT IN MOVING TOWARD A GREENER, MORE SUSTAINABLE About Hudbay FUTURE Strong ESG Performance LONG-TERM SUPPLY AND DEMAND FUNDAMENTALS Electrification of Vehicles • Cu demand from EVs expected to exceed demand Mt Long Life & from fuel-powered vehicles b
Slide 19: Growing Production Outlook
GROWING PRODUCTION OUTLOOK COPPER PRODUCTION GROWTH WITH INCREASING EXPOSURE TO GOLD About Hudbay • Further growth expected in 2022 through Pampacancha and New Britannia; revised 3-Year Guidance Outlook to be issued once the updated mine plans have been released Strong ESG Performance Long Life & Cu
Slide 20: Leading Organic Growth Pipeline
LEADING ORGANIC GROWTH PIPELINE HUDBAY HAS BUILT A DIVERSIFIED PORTFOLIO FOCUSED ON COPPER & GOLD GROWTH About Hudbay RESOURCE FEASIBILITY STUDY Strong ESG EXPLORATION PRODUCTION Performance DEFINITION COMPLETE Long Life & Constancia North Mining Friendly resource modelling expected Q1 2021 Constanc
Slide 21: 2021 Key Objectives
2021 KEY OBJECTIVES About Hudbay • FOCUS on operational efficiencies, maintain low-costs of production to continue to generate Strong ESG positive cash flow and strong returns on invested capital Performance • EXECUTE development and commence mining activities at the high-grade Pampacancha Long Life
Slide 22: Leveraging Hudbay's Key Competitive Advantages
LEVERAGING HUDBAY’S KEY COMPETITIVE ADVANTAGES VALUE CREATION THROUGH LEADING ORGANIC GROWTH PIPELINE About Hudbay CONSTANCIA - Low Cost and Long Life Longer Term Strong ESG Performance Continuous Optimization of Throughput & Recoveries Maria Reyna & Caballito Exploration Executing on Pampacanch
Slide 23: Appendix
PENDIX HEM TMX Bnyse —
Slide 24: World-Class Management Team with Proven Mining Industry Experience
WORLD-CLASS MANAGEMENT TEAM WITH PROVEN MINING INDUSTRY EXPERIENCE About Hudbay DISPROPORTIONATELY TALENTED MANAGEMENT TEAM FOR HUDBAY’S SIZE Strong ESG Performance PETER KUKIELSKI CASHEL MEAGHER STEVE DOUGLAS PRESIDENT & CEO SVP & COO SVP & CFO Long Life & • More than 30 years of sector • Extensive
Slide 25: Board of Directors
BOARD OF DIRECTORS About Hudbay STEPHEN A. LANG, CHAIR PETER KUKIELSKI, PRESIDENT & CEO Strong ESG • Stephen has over 40 years of experience in the • Peter has more than 30 years of experience within Performance mining industry, including engineering, development the base & precious metals and bulk
Slide 26: South America Business Unit
SOUTH AMERICA BUSINESS UNIT MINE About Hudbay Cusco TOWN RAILROAD CUSCO Strong ESG ROAD Performance Las Bambas Long Life & Mining Friendly Jurisdictions CONSTANCIA Low Cost & PERU Yauri Operational Excellence Tintaya Antapaccay Free Cash Flow & Prudent Capital Allocation Lima Experienced Imata Manag
Slide 27: Constancia Regional Potential
CONSTANCIA REGIONAL POTENTIAL MINERAL PROPERTIES WITHIN TRUCKING DISTANCE OF CONSTANCIA INFRASTRUCTURE About Hudbay Distance to Strong ESG Property Process Description Plant 0 5,000 10,000 Performance Meters • Community surface rights Quehuincha North Target Long Life & agreement completed Maria Rey
Slide 28: Constancia Regional Exploration
CONSTANCIA REGIONAL EXPLORATION CONSTANCIA NORTH DRILLING CONTINUES TO INTERSECT CU PORPHYRY & SKARN About Hudbay • Test a possible extension of Cu porphyry and Strong ESG Performance high-grade skarn mineralization within 300m of current northern edge of Constancia pit Long Life & Mining Friendly •
Slide 29: Llaguen Project
LLAGUEN PROJECT GREENFIELD EXPLORATION About Hudbay Strong ESG • Located near existing Performance infrastructure Long Life & • Located near available Mining Friendly workforce; 56km northeast of Jurisdictions Trujillo, the third largest city Low Cost & in Peru Operational Excellence • Mineralizatio
Slide 30: Manitoba Business Unit
MANITOBA BUSINESS UNIT About Hudbay New Britannia Gold Mill 1,500 tpd capacity Strong ESG Performance Snow Lake Long Life & Stall Base Metal Mill Mining Friendly LALOR MINE 3,800 tpd capacity Jurisdictions ~4,500 tpd Low Cost & Operational Excellence 777 LALOR 0 5km Free Cash Flow & Prudent Capital
Slide 31: Manitoba Flow Chart - 2021
MANITOBA FLOW CHART - 2021 TWO MINES FEEDING TWO OPERATING MILLS AND ZINC PLANT About Hudbay ORE CONCENTRATE/METAL Strong ESG Performance ~4,000 tpd Copper Long Life & Flin Flon Mill Concentrate Mining Friendly Jurisdictions ~3,000 tpd (6,000 tpd capacity) Zinc Concentrate Low Cost & 777 Mine Operat
Slide 32: Snow Lake Gold Growth Over Time
SNOW LAKE GOLD GROWTH OVER TIME OVER 2.7 MM OUNCES OF GOLD HAS BEEN IDENTIFIED AS RESERVES / About Hudbay PRODUCED TO DATE Strong ESG Performance 300% INCREASE IN IDENTIFIED RESERVES / PRODUCED GOLD FROM INITIAL RESERVE ESTIMATE Long Life & Mining Friendly Jurisdictions Inferred Material Low Cost &
Slide 33: Positioning of Snow Lake Gold
POSITIONING OF SNOW LAKE GOLD GROWING GOLD PRODUCTION AT FIRST QUARTILE CASH COST AND AISC1 About Hudbay 2020 CASH COST (US$/oz Au) 2020 AISC (US$/oz Au) $3,000 $3,000 Strong ESG $2,500 $2,500 Performance $2,000 $2,000 Long Life & $1,500 $1,500 Mining Friendly Snow Lake Gold LOM Jurisdictions $1,000
Slide 34: Snow Lake Process Flow Chart - 2023
SNOW LAKE PROCESS FLOW CHART - 2023 About Hudbay Lalor Crushed Ore Strong ESG Performance Stall Mill New Britannia Mill1 Long Life & Mining Friendly Jurisdictions Grinding Grinding Low Cost & Operational Excellence Free Cash Flow & Flotation Flotation Prudent Capital Allocation tails Cyanide Tails t
Slide 35: Snow Lake Processing Logistics
SNOW LAKE PROCESSING LOGISTICS About Hudbay LALOR MINE 2020 10 years 2030 Source Ore Strong ESG Performance SATELLITE GOLD DEPOSITS 2030 8 years 2037 (WIM, 3 ZONE) Long Life & Mining Friendly Jurisdictions Processing STALL BASE METAL MILL Location 2020 10 years 2030 (WITH GOLD BY-PRODUCT) Low Cost &
Slide 36: Lalor Mine Life Extension
LALOR MINE LIFE EXTENSION 10-YEAR MINE PLAN BASED ON PROVEN AND PROBABLE RESERVES ONLY About Hudbay • Inferred resources estimated using stringent methodology that constrains the resource Strong ESG within a stope optimization envelope Performance • Expected to lead to a higher resource to reserve c
Slide 37: Snow Lake Gold Regional Potential - 1901 Deposit
SNOW LAKE GOLD REGIONAL POTENTIAL - 1901 DEPOSIT UPDATED RESOURCE ESTIMATE: LARGE BASE METAL RESOURCE WITH SIGNIFICANT About Hudbay GOLD CONTENT • August 2020 resource update was successful in Strong ESG Performance defining a new gold-rich inferred resource estimate SNOW• LAKE Significant increase
Slide 38: Snow Lake Gold Regional Potential
SNOW LAKE GOLD REGIONAL POTENTIAL LARGE PROSPECTIVE LAND PACKAGE IN THE SNOW LAKE BELT WITH About Hudbay SIGNIFICANT GOLD EXPLORATION POTENTIAL Strong ESG Asset Metal Type Reserves & Resources1 MINERAL PROPERTIES IN THE SNOW LAKE REGION Performance MINE Long Life & Probable – 2,448kt @ 1.63% 40kt Cu
Slide 39: Manitoba Regional Mines and Discoveries
MANITOBA REGIONAL MINES AND DISCOVERIES About Hudbay • Hudbay has a long history of delivering additional tonnage beyond the initial reserves in the Snow Lake and Flin Flon VMS camps Strong ESG Performance RESERVES IN THE FLIN FLON AND SNOW LAKE CAMP (MILLION TONNES) Long Life & Flin Flon 62.5 Mt Mi
Slide 40: Arizona Business Unit
ARIZONA BUSINESS UNIT About Hudbay Strong ESG NEVADA, US Performance Miami Elko Pinto Valley Phoenix Resolution Long Life & Mining Friendly Jurisdictions Ray Morenci Reno Florence MASON Low Cost & Safford Operational Excellence Las Vegas Free Cash Flow & ARIZONA, US Prudent Capital Allocation Silver
Slide 41: Scarcity of Copper Assets
SCARCITY OF COPPER ASSETS • There are very few undeveloped copper projects of scale in Hudbay’s preferred jurisdictions About Hudbay • Hudbay owns 2 of the top 20 greenfield projects in Rosemont and Mason Strong ESG Performance • Many of the remaining projects have material impediments to developmen
Slide 42: Rosemont Project
ROSEMONT PROJECT COPPER PRODUCTION PROFILE1 Copper Production (kt in con) About Hudbay 180 $4.00 147 148 137 Copper Production Copper C1 Cash Costs 134 133 128 117 122 $3.00 Strong ESG 120 104 (kt in con) (US$/lb, net) 97 Performance $2.00 60 $1.39 $1.37 $1.06 $1.09 $1.20 $1.19 $1.02 $1.12 $1.01 $1.
Slide 43: Rosemont Project History
ROSEMONT PROJECT HISTORY 2007 & 2008 2009 & 2010 2011 2012 2013 2014 About Hudbay Rosemont Mine Plan of Operations filed Arizona State Mine Inspector, EPA Hazardous Waste ADEQ Aquifer Protection ADEQ Class II Air Permit Hudbay Acquires the Strong ESG with U.S. Forest Service (July Arizona Mined Land
Slide 44: Mason Project
MASON PROJECT PROMISING EXPLORATION POTENTIAL About Hudbay • Mason remains open in several directions • High-grade regional skarn targets with potential to increase grades Strong ESG early in the mine life Performance • Several un-tested IP anomalies and potential to add additional oxide material Lo
Slide 45: 2021 Production Guidance
2021 PRODUCTION GUIDANCE GROWING COPPER AND GOLD PRODUCTION About Hudbay • Copper production forecast to increase Contained metal in 2021 Guidance Year Ended 2020 Guidance2 Concentrate1 Dec. 31, 2020 Strong ESG by 7% in 2021 compared to 2020 Performance Peru • Gold production anticipated to increase
Slide 46: 2021 Cost Guidance
2021 COST GUIDANCE • Total capital expenditures expected to decline in 2021 on lower growth spending in Peru About Hudbay • Higher exploration and unit operating costs expected in 2021 Strong ESG Performance • Introduced consolidated cash cost and sustaining cash costs guidance in 2021 Long Life & E
Slide 47: Peru Mineral Reserves
PERU MINERAL RESERVES AS AT JANUARY 1, 20201 About Hudbay Strong ESG CATEGORY TONNES Cu (%) Mo (g/t) Au (g/t) Ag (g/t) Performance Long Life & CONSTANCIA1 Mining Friendly Jurisdictions Proven 408,800,000 0.28 85 0.035 2.76 Low Cost & Probable 77,500,000 0.27 70 0.044 3.58 Operational Excellence Tota
Slide 48: Peru Mineral Resources
PERU MINERAL RESOURCES AS AT JANUARY 1, 20201 About Hudbay Strong ESG CATEGORY TONNES Cu (%) Mo (g/t) Au (g/t) Ag (g/t) Performance CONSTANCIA Long Life & Mining Friendly Measured 122,700,000 0.18 55 0.028 1.77 Jurisdictions Indicated 154,300,000 0.20 65 0.033 1,87 Low Cost & Operational Excellence
Slide 49: Snow Lake Reserves & Resources
SNOW LAKE RESERVES & RESOURCES AS AT JANUARY 1, 20201 About Hudbay Strong ESG PROPERTY CATEGORY TONNES Cu (%) Zn (%) Au (g/t) Ag (g/t) Performance Proven 7,276,000 0.57 6.27 2.42 29 Long Life & Base Metal Zone Probable 1,739,000 0.60 4.15 3.83 31 Mining Friendly Jurisdictions Proven 1,748,000 1.37 1
Slide 50: Snow Lake Reserves & Resources (Cont'd)
SNOW LAKE RESERVES & RESOURCES (CONT’D) AS AT JANUARY 1, 20201 About Hudbay Strong ESG PROPERTY TONNES Cu (%) Zn (%) Au (g/t) Ag (g/t) Performance Measured 980,000 0.43 6.79 2.2 30 Long Life & 1901 Base Metal Zone Mining Friendly Indicated 1,090,000 0.30 10.07 1.5 33 Jurisdictions Indicated 469,000
Slide 51: Flin Flon Reserves & Resources
FLIN FLON RESERVES & RESOURCES AS AT JANUARY 1, 20201 About Hudbay Strong ESG PROPERTY CATEGORY TONNES Cu (%) Zn (%) Au (g/t) Ag (g/t) Performance Proven 2,122,000 1.44 4.55 2.01 27 Long Life & 777 Reserves Mining Friendly Probable 459,000 1.11 4.11 1.75 26 Jurisdictions Total 777 Mineral Reserve 2,
Slide 52: Rosemont and Mason Reserves & Resources
ROSEMONT AND MASON RESERVES & RESOURCES ROSEMONT AS AT JANUARY 1, 2020 About Hudbay MINERAL RESERVES1 CATEGORY TONNES Cu (%) Mo (%) Ag (g/t) Strong ESG Proven 426,100,000 0.48 0.012 4.96 Performance Probable 111,000,000 0.31 0.010 3.09 Long Life & Total 2P Reserves 537,100,000 0.45 0.012 4.58 Mining
Slide 53: Additional Information – Reserves & Resources
ADDITIONAL INFORMATION – RESERVES & RESOURCES About Hudbay 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 Pe
Slide 54: Additional Information – Reserves & Resources (Cont'd)
ADDITIONAL INFORMATION – RESERVES & RESOURCES (CONT’D) 1. Mineral reserves and resources calculated using metal prices of $3.10 per pound copper, $11.00 per pound molybdenum, $17.00 per ounce silver and $1,375 per ounce gold. The Constancia and Pampacancha About Hudbay reserve pits consist of operat
Slide 55: For More Information Contact
For More Information Contact: Candace Brûlé Director, Investor Relations 416.814.4387 | candace.brule@hudbay.com
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