Hudbay Minerals Inc · TSX:HBM
Hudbay Minerals — World Gold Forum 2020
46 slides from Hudbay Minerals's conference presentation, April 2020
Slide 1: World Gold Forum 2020 Investor Presentation
WORLD GOLD FORUM 2020 I N V E S T O R P R E S E N TAT I O N April 2020
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. Oft
Slide 3: Diversified Mid-Tier Copper Producer
DIVERSIFIED MID-TIER COPPER PRODUCER About Hudbay TSX, NYSE, BVL Symbol HBM Hudbay’s Gold Market Capitalization1 C$0.7 billion Business Shares Outstanding 261 million Snow Lake Gold Strategy MANITOBA 777 Available Liquidity2 $0.82 billion Lalor WIM & 3 Zone Exploration Snow Lake Gold NEVADA Processi
Slide 4: The Hudbay Advantage
THE HUDBAY ADVANTAGE About Hudbay Hudbay’s Gold Long life assets located in mining friendly jurisdictions Business Snow Lake Gold Proven track record of operational excellence and low cost mines Strategy Snow Lake Gold Focused on free cash flow generation and prudent capital allocation Processing Lo
Slide 5: 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 Rosemont 19 11 1 Hudbay’s Gold Business Constancia 5 17 5 2 5 Snow Lake 8 18 9 Snow Lake Gold Strategy 777 16 2.5 0.3 Snow Lake Gold LOCATED IN TOP MINING FRI
Slide 6: Leading Operating Cost Performance
LEADING OPERATING COST PERFORMANCE CONSTANCIA ONE OF THE LOWEST COST COPPER MINES IN SOUTH AMERICA About Hudbay • Continuous operational improvements at Constancia have driven costs down, while Hudbay’s Gold increasing efficiencies and productivity Business LOWEST COST OPEN PIT COPPER MINES IN SOUTH
Slide 7: Focused on Free Cash Flow Generation & Prudent Capital Allocation
FOCUSED ON FREE CASH FLOW GENERATION & PRUDENT CAPITAL ALLOCATION • Generated significant EBITDA and positive free cash flow during the volatile copper price About Hudbay environment over the last several years due to un-hedged production and stable low-cost profile Hudbay’s Gold • Prudent balance s
Slide 8: Leveraging Expertise Demonstrated Through Best in Class Delivery
PRUDENT CAPITAL ALLOCATION LEVERAGING EXPERTISE THAT WAS DEMONSTRATED THROUGH BEST IN CLASS About Hudbay DELIVERY OF CONSTANCIA • Successfully constructed Constancia (Peru), Lalor (Canada) and Reed (Canada) mines Hudbay’s Gold simultaneously during 2012-2014 Business PAMPACANCHA NEW BRITANNIA ~160%
Slide 9: Proven Mining Industry Experience
PROVEN MINING INDUSTRY EXPERIENCE BEST IN CLASS MINE DEVELOPMENT & ADDING VALUE THROUGH EXPLORATION About Hudbay • Constancia’s development and mine ramp- CONSTANCIA (2009-2020)2 Caballito, Kusiorcco Hudbay’s Gold up was best in class Production Reserves & Maria Reyna Business • Hudbay has been succ
Slide 10: Strong Environmental, Social & Governance Performance
STRONG ENVIRONMENTAL, SOCIAL & GOVERNANCE (“ESG”) PERFORMANCE INDUSTRY LEADER IN RESPONSIBLE MINING About Hudbay ENVIRONMENT SOCIAL IMPACT HEALTH & SAFETY GOVERNANCE Hudbay’s Gold ü Declining energy and GHG ü Positive impact on ü Constancia has the best ü Board refreshed in 2019 with Business emissi
Slide 11: Diversified Organic Growth Pipeline
DIVERSIFIED ORGANIC GROWTH PIPELINE COPPER PRODUCTION GROWTH WITH INCREASING EXPOSURE TO GOLD About Hudbay Hudbay’s Gold Cu Au1 Zn (koz Business (kt) Au-Ag) (kt) +68% 320 Snow Lake Gold Strategy +20% Snow Lake Gold 140 137 235 140 Processing Logistics 125 123 119 117 190 166 90 Snow Lake Gold Positi
Slide 12: Execution of Strategy
EXECUTION OF STRATEGY LEVERAGING HUDBAY’S KEY COMPETITIVE ADVANTAGES FOR VALUE CREATION About Hudbay Hudbay’s Gold Business LOW RISK, HIGH RETURN SHORT-TERM PRIORITIES ESG Snow Lake Gold Excellence Successful • Deliver free cash flow from Pampacancha Strategy Exploration • Drill Lalor gold and exten
Slide 13: Leading Organic Growth Pipeline
LEADING ORGANIC GROWTH PIPELINE HUDBAY HAS BUILT A DIVERSIFIED PORTFOLIO FOCUSED ON COPPER & GOLD GROWTH About Hudbay • Through robust exploration and disciplined M&A, Hudbay has built a diversified portfolio of operating mines and an extensive development pipeline Hudbay’s Gold • Hudbay’s portfolio
Slide 14: Overview of Hudbay's Precious Metals Business
OVERVIEW OF HUDBAY’S PRECIOUS METALS BUSINESS SHOWN ON A PRECIOUS METALS GOLD EQUIVALENT BASIS1 About Hudbay PRECIOUS METALS ANNUAL PRODUCTION2 (AUEQ) CONTAINED M&I3 (AUEQ) Hudbay’s Gold Business SNOW LAKE 2.4 Moz Snow Lake Gold MANITOBA 123 koz in 2020 growing to koz in 2022 170 Strategy with New B
Slide 15: Precious Metals Exposure (Revenue)
PRECIOUS METALS EXPOSURE (REVENUE) COPPER FOCUSED WITH COUNTERCYCLICAL PRECIOUS METALS EXPOSURE About Hudbay HUDBAY COMMODITY EXPOSURE Hudbay’s Gold 2% Business PRECIOUS METALS EXPOSURE VS. PEERS3 18% Cu 33% 32% Snow Lake Gold Zn 20191 Strategy 58% Au + Ag 21% Mo Snow Lake Gold 22% Processing Logist
Slide 16: Snow Lake Gold Strategy Highlights
SNOW LAKE GOLD STRATEGY HIGHLIGHTS MORE ANNUAL AU OUNCES & EXTENDING MINE LIFE WITH FURTHER UPSIDE POTENTIAL About Hudbay • Snow Lake Gold Strategy Phase 1 – February 2019 – Transformed Lalor into a leading gold mine • Snow Lake Gold Strategy Phase 2 – March 2020 – Adding more annual gold ounces for
Slide 17: 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 Hudbay’s Gold Business ü 2008 & 2009 – Au zone and ü 2018 – Completion of ü 2020 – Optimized mine • Potential to increase gold Cu-Au zone id
Slide 18: 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 Hudbay’s Gold 300% INCREASE IN IDENTIFIED RESERVES / PRODUCED GOLD FROM INITIAL RESERVE ESTIMATE Business m e fro ite s ll Inferred Snow Lake Gold crea sate nd in of s a Materia
Slide 19: Snow Lake Processing Logistics
SNOW LAKE PROCESSING LOGISTICS About Hudbay LALOR MINE 2020 10 years 2030 Hudbay’s Gold SATELLITE GOLD DEPOSITS 2030 8 years 2037 Business (WIM, 3 ZONE) Snow Lake Gold STALL BASE METAL MILL Strategy 2020 10 years 2030 (WITH GOLD BY-PRODUCT) NEW BRITANNIA GOLD MILL Snow Lake Gold 2022 15 years 2037 P
Slide 20: 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 $2,500 $2,500 Hudbay’s Gold Business $2,000 $2,000 $1,500 $1,500 Snow Lake Gold LOM $1,000 Snow Lake Gold LOM $1,000 Snow Lake Gold
Slide 21: Positioning of Snow Lake Gold (Cont.)
POSITIONING OF SNOW LAKE GOLD (CONT.) FAVORABLY POSITIONED VS. COMPARABLE UNDERGROUND MINES (NPV’S >US$500 MM1) About Hudbay $1,200 Illustrative positioning of Snow Lake Gold Potential for greater Hudbay’s Gold production at lower cost Business with mill expansion $1,000 Lamaque Snow Lake Gold Cash
Slide 22: Significant Gold Value to Be Unlocked
SIGNIFICANT GOLD VALUE TO BE UNLOCKED 2022 EV/EBITDA RANGES1 (RATIO) SNOW LAKE GOLD 2022 GROSS MARGIN2 (US$ MM) About Hudbay 18.0x $210 $194 Hudbay’s Gold $179 Business $163 6.5x 4.0x 12.0x Snow Lake Gold 3.0x 5.0x Strategy Base Metal Gold Streaming Producers Producers Companies US$1400 / oz Au US$1
Slide 23: Lalor Mine Life Extension
LALOR MINE LIFE EXTENSION HIGH RESOURCE-TO-RESERVE CONVERSION POTENTIAL About Hudbay • Proven and probable reserves mine plan provides 10+ year mine life Hudbay’s Gold • Inferred resources estimation methodology expected to lead to higher resource to Business reserve conversion factor, providing pot
Slide 24: Lalor In-Mine Gold Exploration Targets
LALOR IN-MINE GOLD EXPLORATION TARGETS LENS 17 COPPER-GOLD RICH LENS NOT CURRENTLY IN MINE PLAN About Hudbay • Both Lens 17 and 27 are open down 3D VIEW OF LENS 17 AND LENS 27 AT LALOR Hudbay’s Gold plunge Business GOLD LENSES • Further exploration / delineation could add additional copper-gold mill
Slide 25: Snow Lake Gold Regional Potential
SNOW LAKE GOLD REGIONAL POTENTIAL About Hudbay • Hudbay has a large prospective land MINERAL PROPERTIES IN THE SNOW LAKE REGION package in the Snow Lake belt with Hudbay’s Gold significant gold exploration potential Business • WIM (15km from New Britannia mill) is a MINE copper-gold deposit that was
Slide 26: Snow Lake Gold Regional Potential - 1901
SNOW LAKE GOLD REGIONAL POTENTIAL - 1901 POTENTIAL FOR INCREMENTAL COPPER-GOLD MILL FEED About Hudbay Hudbay’s Gold Business DRILLING IN THE 1901 DEPOSIT HAS Snow Lake Gold IDENTIFIED SEVERAL Strategy HIGH-GRADE GOLD AND COPPER-GOLD ZONES Snow Lake Gold Processing HAS POTENTIAL TO Logistics ADD ADDI
Slide 27: Appendix
APPENDIX
Slide 28: Snow Lake Reserves & Resources
SNOW LAKE RESERVES & RESOURCES AS AT JANUARY 1, 20201 About Hudbay PROPERTY CATEGORY TONNES Cu (%) Zn (%) Au (g/t) Ag (g/t) Proven 1,748,000 1.37 1.11 6.70 24.0 Lalor Gold Zone Probable 4,251,000 0.83 0.42 6.21 27.0 Hudbay’s Gold Business WIM Probable 2,448,000 1.63 0.25 1.60 6.3 3 Zone Probable 662
Slide 29: South America Business Unit
SOUTH AMERICA BUSINESS UNIT MINE TOWN Cusco About Hudbay RAILROAD CUSCO ROAD Hudbay’s Gold Business Las Bambas Snow Lake Gold CONSTANCIA Strategy PERU Yauri Tintaya Snow Lake Gold Antapaccay Processing Logistics Lima Snow Lake Gold Positioning AREQUIPA Imata CONSTANCIA Snow Lake Gold Exploration Pot
Slide 30: Constancia Mine
CONSTANCIA MINE LOW-COST, LONG-LIFE COPPER MINE IN PERU About Hudbay • Began production at end of 2014 Location Chumbivilcas, Peru • Developed and maintain meaningful partnerships with Ownership 100% Hudbay’s Gold Business the local communities Type of deposit Porphyry copper- molybdenum deposit • P
Slide 31: Constancia Optimization
CONSTANCIA OPTIMIZATION SEEING RESULTS FROM CONTINUOUS OPTIMIZATION INITIATIVES About Hudbay • Increasing throughput and quarterly trend in copper recoveries Hudbay’s Gold • Continued integration of an automated, advance process control system Business • Flotation improvements – optimizing water rec
Slide 32: Constancia Regional Potential
CONSTANCIA REGIONAL POTENTIAL • Since 2012, executed over 90 social MINERAL PROPERTIES WITHIN TRUCKING DISTANCE OF About Hudbay agreements with local governments CONSTANCIA PROCESSING FACILITY and communities, maintaining our social license to operate Hudbay’s Gold 0 5,000 10,000 Business • Pampacan
Slide 33: Manitoba Business Unit
MANITOBA BUSINESS UNIT About Hudbay New Britannia Gold Mill 1,500 tpd capacity Hudbay’s Gold Snow Lake Business Stall Base Metal Mill 3,800 tpd capacity LALOR MINE Snow Lake Gold ~4,500 tpd Strategy LALOR Snow Lake Gold 777 Processing Logistics 0 5km SASKATCHEWAN MANITOBA Snow Lake Gold Positioning
Slide 34: Manitoba Flow Chart - 2019
MANITOBA FLOW CHART - 2019 TWO MINES FEEDING TWO OPERATING MILLS AND ZINC PLANT About Hudbay ORE CONCENTRATE/METAL ~4,000 tpd Hudbay’s Gold Business d Flin Flon Mill p ~3,000 tpd 00t Copper ,0 Concentrate Snow Lake Gold ~3 (6,000 tpd capacity) ked Strategy 777 Mine ruc Zinc dT ~3,500 tpd Concentrate
Slide 35: Manitoba Flow Chart - 2023
MANITOBA FLOW CHART - 2023 ONE MINE FEEDING TWO OPERATING MILLS About Hudbay ORE CONCENTRATE/METAL Care & Maintenance Hudbay’s Gold Business Flin Flon Mill Copper Reserve Exhausted Concentrate Snow Lake Gold (6,000 tpd capacity) Strategy 777 Mine Zinc ~3,000 tpd Concentrate Closed2 Snow Lake Gold Pr
Slide 36: Snow Lake Mine Plan Summary
SNOW LAKE MINE PLAN SUMMARY MINE PLAN SUMMARY LOM 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E Total1 About Hudbay LALOR BASE METAL ORE Ore mined 000 tonnes 1,575 1,506 1,035 997 1,035 1,035 1,035 738 521 518 176 10,170 Hudbay’s Gold Ore mined tpd 4,351 4,160 2,859 2,754 2,859 2
Slide 37: Snow Lake Mine Plan Summary (Cont'd)
SNOW LAKE MINE PLAN SUMMARY (CONT’D) MINE PLAN SUMMARY LOM 2030E 2031E 2032E 2033E 2034E 2055E 2036E 2037E Total1 About Hudbay WIM ORE Ore mined 000 tonnes 104 414 438 438 401 316 288 49 2,448 Hudbay’s Gold Ore mined tpd 286 1,133 1,200 1,200 1,100 867 788 134 - Business Copper grade % Cu 1.22% 1.62
Slide 38: Snow Lake Mine Plan Summary (Cont'd)
SNOW LAKE MINE PLAN SUMMARY (CONT’D) PRODUCTION SUMMARY LOM 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E Total About Hudbay LALOR MINE PRODUCTION Copper 000 tonnes 8 9 9 10 10 9 9 8 11 11 97 Hudbay’s Gold Zinc 000 tonnes 81 74 55 52 43 48 54 32 23 20 492 Business Gold 000 ounces 74 10
Slide 39: Snow Lake Mine Plan Summary (Cont'd)
SNOW LAKE MINE PLAN SUMMARY (CONT’D) CAPEX SUMMARY 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E About Hudbay CAPITAL EXPENDITURES SUSTAINING CAPITAL: Hudbay’s Gold Lalor Sustaining Capital C$ millions $102 $111 $98 $58 $53 $39 $18 $11 $2 $2 Business Total Sustaining Capital US$ millio
Slide 40: Snow Lake Mine Plan Summary (Cont'd)
SNOW LAKE MINE PLAN SUMMARY (CONT’D) CASH COSTS SUMMARY About Hudbay 2022-29 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E Avg. GOLD CASH COSTS Hudbay’s Gold Business Gold Production1 Oz (000s) 74 102 158 151 136 154 192 139 146 146 153 Cash Costs US$/lb ($95) $151 $371 $507 $584 $524
Slide 41: Manitoba Regional Mines and Discoveries
MANITOBA REGIONAL MINES AND DISCOVERIES • Hudbay has a long history of delivering additional tonnage beyond the initial reserves About Hudbay in the Flin Flon and Snow Lake VMS camps Hudbay’s Gold RESERVES IN THE FLIN FLON AND SNOW LAKE CAMP (MILLION TONNES) Business Flin Flon 62.5 Mt Lalor Chisel U
Slide 42: 2020 Guidance
2020 GUIDANCE PRODUCTION AND UNIT COST About Hudbay CONTAINED METAL IN CONCENTRATE1 2020 GUIDANCE 2019 ACTUAL 2019 GUIDANCE MANITOBA Hudbay’s Gold Business Copper tonnes 18,000 – 22,000 23,354 22,000 – 25,000 Zinc tonnes 105,000 – 125,000 119,106 100,000 – 115,000 Snow Lake Gold Precious Metals2 oun
Slide 43: 3-Year Production Outlook
3-YEAR PRODUCTION OUTLOOK GROWING COPPER AND GOLD PRODUCTION About Hudbay CONTAINED METAL IN CONCENTRATE1 2020 GUIDANCE 2021 GUIDANCE 2022 GUIDANCE Hudbay’s Gold Business MANITOBA2 Copper tonnes 18,000 – 22,000 19,000 – 23,000 13,000 – 15,000 Snow Lake Gold Zinc tonnes 105,000 – 125,000 115,000 – 14
Slide 44: 2020 Guidance
2020 GUIDANCE CAPITAL EXPENDITURES1 $ MILLIONS 2020 GUIDANCE 2019 ACTUAL 2019 GUIDANCE About Hudbay SUSTAINING CAPITAL Manitoba2 100 126.3 100 Hudbay’s Gold Peru3 100 84.9 95 Business TOTAL SUSTAINING CAPITAL 200 211.2 195 GROWTH CAPITAL Snow Lake Gold Manitoba 80 14.1 10 Strategy Peru4 70 2.1 45 Ar
Slide 45: Additional Information
ADDITIONAL INFORMATION SUPPLEMENTAL INFORMATION TO THE 1901 DEPOSIT DRILL RESULTS About Hudbay From (m) To (m) Azimuth at Dip at Hole ID Easting Northing Elevation Easting Northing Elevation Intercept Intercept Hudbay’s Gold CH1916 427067 6078909 -270 427068 6078909 -278 087 -85 Business CH1918 4270
Slide 46: For More Information Contact
For More Information Contact: Candace Brûlé, Director, Investor Relations 416.814.4387 | candace.brule@hudbay.com