Hudbay Minerals Inc · TSX:HBM
Hudbay Minerals — BMO Capital Markets 24th Global Metals & Mining Conference 2015
38 slides from Hudbay Minerals's conference presentation, Feb 23, 2015
Slide 1: BMO Capital Markets 24th Global Metals & Mining Conference
BMO Capital Markets 24th Global Metals & Mining Conference February 22 – 25, 2015 HBM INVESTOR PRESENTATION
Slide 2: Cautionary Information
Cautionary 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 this presentation, other tha
Slide 3: Cautionary Information (continued)
Cautionary 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, risks generally associated with the mining industry,
Slide 4: Cautionary Information (continued)
Cautionary Information (continued) The technical and scientific information in this presentation related to the Constancia project has been approved by Cashel Meagher, P. Geo, Hudbay's Vice-President, South America Business Unit. The technical and scientific information related to all other sites an
Slide 5: About Hudbay
About Hudbay Integrated base and precious metals TSX, NYSE, BVL Symbol HBM mining company Market Capitalization1 $2.2 billion Operating mines, development projects and processing Shares Outstanding 234 million facilities located in the Americas Available Liquidity2 $0.6 billion Long track record of
Slide 6: Recent Achievements and Challenges
Recent Achievements and Challenges ACHIEVED OUR GROWTH OBJECTIVES IN 2014 Copper production and operating cost guidance achieved 777 2014 zinc and precious metal production below guidance Production Commercial production achieved ahead of Reed guidance and under budget Achieved commercial pr
Slide 7: Near-Term Production Growth
Near-Term Production Growth1 OPPORTUNITY FOR A RE-RATE IS SIGNIFICANT AS WE DELIVER GROWTH 320% 145% 50% INCREASE IN CU PRODUCTION INCREASE IN AU-EQ. PRODUCTION2 INCREASE IN ZN PRODUCTION (kt) (koz) (kt) 200 250 150 200 150 100 150 100 100 50 50 50 - 3 - - 3 3 2014A 2015G 2016E 2014A 2015G 2016E 201
Slide 8: Copper Reserves and Resources per Share
Copper Reserves and Resources per Share1 CONSISTENT GROWTH IN CU-EQ RESERVES AND RESOURCES PER SHARE 100 100 Cu-Eq. lbs per share 75 Cu-Eq. lbs per share 75 25 2P Reserves 45 M+I Resources 50 4 Inferred Resources 50 Historical 2P Reserves2 41 40 37 Historical Inferred Resources2 25 25 17 10 5 - 3 9
Slide 9: Constancia Project
Constancia Project PROJECT COMMISSIONING • Close to 21 million hours worked Life of Mine1 with only one lost time accident in Ownership 100% 2014 Daily ore throughput 80k tpd • Physical construction Avg. annual Cu production2 82k tonnes essentially complete Cash cost per Cu lb3 US$1.25/lb • Achieved
Slide 10: Constancia Construction Progress
Constancia Construction Progress Constancia mine maintenance facilities Crushed ore to be processed in Constancia mill Constancia mill Constancia flotation cell INVESTOR PRESENTATION 10
Slide 11: Constancia Construction Progress (Cont'd)
Constancia Construction Progress (Cont’d) Constancia ore dump pocket for the primary crusher Constancia crusher commissioning Tailings management facility Initial copper concentrate stored in concentrate shed INVESTOR PRESENTATION 11
Slide 12: 777 Mine
777 Mine STEADY, LOW-COST PRODUCTION Life of Mine1 • 6 lost-time accidents over past 6 years Ownership 100% • Mature mine with steady cost performance Daily ore throughput 4,500 tpd • Exploration to focus on recently optioned War Baby claim Avg. Annual Cu production2 25k tonnes Avg. Annual Zn produc
Slide 13: Lalor Mine
Lalor Mine PRODUCTION; PHASE 2 RAMP-UP Life of Mine1 • Over 1,000 days without a lost-time Ownership 100% accident Daily ore throughput 3,300 tpd • Main production shaft complete and Avg. annual Zn production2 Avg. annual Au-Eq. production2 59k tonnes 43k ounces operating at a steady state; capacity
Slide 14: Lalor Exploration
Lalor Exploration DRILLING OF CU-AU ZONE COMMENCED IN Q4 2014 Lalor Cross-Section with Exploration Platform 0m Underground drill Production program underway Shaft Upgrade inferred resources 500m Determine optimal location to advance exploration ramp and to develop additional Exploration Ramp drill p
Slide 15: Reed Mine
Reed Mine COMMERCIAL PRODUCTION ACHIEVED Life of Mine1 • 2-year construction program Ownership 70% completed with no lost-time accidents Daily ore throughput 1,300 tpd Avg. annual Cu production2 15k tonnes • Achieved commercial production Cash cost per lb Cu3 $1.64/lb ahead of guidance and under bud
Slide 16: Rosemont Project
Rosemont Project 80%-OWNED1 COPPER PROJECT IN ARIZONA, USA Hudbay acquired control of the Rosemont project in July 2014 Completed 43 hole confirmatory drill program with approximately 30,000 metres drilled Metallurgical test program has begun; basic engineering review is underway Project permitting
Slide 17: Global Producer with Leading Cash Costs
Global Producer with Leading Cash Costs1 TOP GLOBAL PRODUCER WITH SIGNIFICANT LEVERAGE TO COPPER AND BOTTOM QUARTILE COSTS Global Positioning on 2019E Copper Production Rank 22 Rank 32 Rank 34 Global Positioning on 2019E Cash Costs Source: Wood Mackenzie 1. “Hudbay (2019) PF” indicates the expected
Slide 18: Why Invest in Hudbay?
Why Invest in Hudbay? HIGH QUALITY COPPER GROWTH STORY • Imminent sector-leading copper production growth • High quality copper and zinc producer with leverage to strengthening longer-term metal market fundamentals • Attractive operating cost structure and improving unit margins with ramp up of new
Slide 19: Appendix
Appendix INVESTOR PRESENTATION 19
Slide 20: Appendix Contents
Appendix Contents • By-product copper and zinc cost curves • Global refined metal market balance • Growth of mineral deposits • 2015 guidance • Precious metals stream • Reserves and resources INVESTOR PRESENTATION 20
Slide 21: Copper & Zinc By-Product Cost Curves
Copper & Zinc By-Product Cost Curves1 Source: Wood Mackenzie (2014 cost curves) 1. By-product costs calculated using Wood Mackenzie’s by-product costing methodology, which is materially different from the by-product costs reported by Hudbay in its public disclosure 2 .777 and Constancia by-product c
Slide 22: Global Refined Metal Market Balance
Global Refined Metal Market Balance Source: CRU, Copper Market Outlook and Zinc Market Outlook, January 2015 By 2019, both copper and zinc refined metal markets are expected to be in significant deficit INVESTOR PRESENTATION 22
Slide 23: Growth of Mineral Deposits
Growth of Mineral Deposits DISCOVERIES IN THE GREENSTONE BELT Flin Flon ∕∕ 62.5 Lalor Trout Lake 777 Stall Lake Chisel U/G Callinan Chisel Osborne Anderson Konuto Spruce Schist Lake Centennial Westarm Chisel Pit Coronation White Lake Dickstone Rod Initial resource Photo Ghost & Lost Added resource C
Slide 24: 2015 Production and Unit Cost Guidance
2015 Production and Unit Cost Guidance Contained Metal in Concentrate1 2015 Guidance 2014 Production 2014 Guidance Manitoba2 Copper Tonnes 40,000 – 50,000 37,644 36,000 – 45,000 Zinc Tonnes 95,000 – 120,000 82,542 87,000 – 105,000 Precious Metals3 Ounces 85,000 – 105,000 85,703 99,000 – 120,000 Comb
Slide 25: 2015 Production and Unit Cost Guidance
2015 Production and Unit Cost Guidance Flin Flon Zinc Plant Zinc Concentrate Treated 190,000 – 235,000 tonnes Zinc Metal Produced 95,000 – 120,000 tonnes Unit Operating Costs1 C$0.31 - $0.38/lb 1. Forecast unit operating costs are calculated on the same basis as reported unit operating costs in Hudb
Slide 26: 2015 Capital Expenditure Budget
2015 Capital Expenditure Budget1 C$ Millions Sustaining Capital Manitoba 140 Peru 180 Total Sustaining Capital 320 Growth Capital Arizona 60 Peru 10 Total Growth Capital 70 Capitalized Exploration 35 Total Capital Expenditure 425 1. Excludes pre-production revenue, capitalized interest and capitaliz
Slide 27: 2015 Exploration Budget
2015 Exploration Budget C$ Millions Manitoba 20 Peru 5 Arizona 10 Generative and Other 20 Total Exploration Expenditures 55 Capitalized Spending1 (35) Total Exploration Expense 20 1. Assumes $20 million allocated to “Generative and Other” will be capitalized INVESTOR PRESENTATION 27
Slide 28: 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 silver
Slide 29: 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 30: 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 31: Manitoba Mineral Reserves
Manitoba Mineral Reserves As at January 1, 2014 Category Tonnes Cu (%) Zn (%) Au (g/t) Ag (g/t) 7771 Proven 4,893,000 2.27 4.01 1.84 24.71 Probable 5,707,000 1. 34 4.24 1.79 24.69 Lalor – Base Metal2 Proven 1,332,000 0.73 8.99 1.53 17.49 Probable 11,334,000 0.68 7.81 1.56 23.77 Lalor – Gold Zone Pro
Slide 32: Manitoba Mineral Resources
Manitoba Mineral Resources As at September 30, 2013 Category Tonnes Cu (%) Zn (%) Au (g/t) Ag (g/t) 7771 Inferred 784,000 1.05 4.49 1.77 30.61 Lalor – Base Metal2 Inferred 3,832,000 2.04 5.77 3.47 21.24 Lalor – Gold Zone Inferred 6,281,000 0.42 0.49 4.70 31.48 Reed Inferred 233,000 4.31 0.52 0.38 4.
Slide 33: Copper Equivalent Reserves and Resources
Copper Equivalent Reserves and Resources1 All Metals Project Category Cu Equivalent (000 tonnes) 2014 2013 Change Constancia2 Proven & Probable 2,655 2,263 392 Measured & Indicated 1,045 1,329 (284) Inferred 503 593 (90) Lalor Proven & Probable 663 705 (42) Inferred 483 579 (96) 7773 Proven & Probab
Slide 34: Precious Metal Equivalent Reserves and Resources
Precious Metal Equivalent Reserves and Resources1 Project Category Au Equivalent (000 ounces) 2014 2013 Change Constancia2 Proven & Probable 2,341 1,951 390 Measured & Indicated 972 1,132 (160) Inferred 441 520 (79) Lalor Proven & Probable 1,209 1,137 72 Inferred 1,557 1,753 (196) 7773 Proven & Prob
Slide 35: Additional Information
Additional 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 Standards on Mineral Resou
Slide 36: Additional Information
Additional Information Peru 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 Report” as fil
Slide 37: Rosemont Historical Reserves and Resources
Rosemont Historical Reserves and Resources1 As at August 28, 2012 Historical Mineral Reserves Category M (tons) Cu (%) Mo (%) Ag (opt) Proven 308,075 0.46 0.015 0.12 Probable 359,131 0.42 0.014 0.12 Historical Mineral Resources (inclusive of historical mineral reserves) Category M (tons) Cu (%) Mo (
Slide 38: HBM
For more information contact: Jacqueline Allison Director, Investor Relations Tel: 416.814.4387 Email: jacqueline.allison@hudbayminerals.com HBM INVESTOR PRESENTATION
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