Hudbay Minerals Inc · TSX:HBM
Hudbay Minerals — Investor Presentation (January 2021)
54 slides from Hudbay Minerals's investor presentation, January 2021
Slide 1: Investor Presentation
I N V E S T O R P R E S E N TAT I O N January 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$2.3 billion Long Life & Shares Outstanding 261 million Mining Friendly Jurisdictions Available Liquidity2 $740 million Debt Outstanding3 $1.2 billion Low Cost & Operational 20194 2022E5 2% 2% MANITOB
Slide 4: The Hudbay Competitive Advantage
THE HUDBAY COMPETITIVE ADVANTAGE About Hudbay Long Life & Mining Friendly 1 Long life assets located in mining friendly jurisdictions Jurisdictions Low Cost & Operational 2 Proven track record of operational excellence and low cost mines Excellence Free Cash Flow & Prudent Capital 3 Focused on free
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 Long Life & Constancia 5 17 5 2 Mining Friendly Jurisdictions Snow Lake 8 18 9 Low Cost & Rosemont 5 19 11 1 Operational Excellence 777 16 2.5 Free Cash Flow
Slide 6: 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 every year Long Life & for the past 5 years Mining Friendly Jurisdictions • Hudbay is well-positioned on the cash cost curve Low Cost & Operational •
Slide 7: Constancia Mine
CONSTANCIA MINE CONTINUOUS OPTIMIZATION INITIATIVES About Hudbay • Increasing throughput and quarterly trend in copper recoveries • Continued integration of an automated, advanced process control system Long Life & • Flotation improvements – optimizing water recovery in the tailings thickener Mining
Slide 8: Manitoba Operations
MANITOBA OPERATIONS LALOR ON TRACK TO DELIVER INTO 2020 GUIDANCE About Hudbay • Continued strong operating performance, largely unaffected by increased COVID-19 protocol constraints • Early mining of Lalor gold zones underway in preparation for New Britannia Long Life & mill restart Mining Friendly
Slide 9: Focused on Free Cash Flow Generation & Prudent Balance Sheet Management
FOCUSED ON FREE CASH FLOW GENERATION & PRUDENT BALANCE SHEET MANAGEMENT About Hudbay • Generated ~$1.9B of EBITDA and ~$700M of free cash flow over the last four years and during the volatile copper price environment due to un-hedged production and stable low-cost profile Long Life & Mining Friendly
Slide 10: Prudent Capital Allocation
PRUDENT CAPITAL ALLOCATION LEVERAGING EXPERTISE THAT WAS DEMONSTRATED THROUGH BEST IN CLASS About Hudbay DELIVERY OF CONSTANCIA Long Life & • Successfully constructed Constancia (Peru), Lalor (Canada) and Reed (Canada) mines Mining Friendly simultaneously during 2012-2014 Jurisdictions PAMPACANCHA N
Slide 11: 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 Long Life & prefund entire capital budget for New Britannia gold mill
Slide 12: Leading Mine Development & Operating Cost Performance
PROVEN MINING INDUSTRY EXPERIENCE LEADING MINE DEVELOPMENT & OPERATING COST PERFORMANCE About Hudbay RAMP-UP FROM FIRST PRODUCTION TO COMMERCIAL Long Life & • Constancia’s project development and PRODUCTION WAS 3X FASTER THAN THE PEER AVERAGE Mining Friendly Jurisdictions mine ramp-up was best in cl
Slide 13: 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 Long Life & Mining Friendly operations Jurisdictions • Constancia mine reserves have doubled since the acquisition in 20
Slide 14: Snow Lake Gold Strategy: Proving Our Track Record
SNOW LAKE GOLD STRATEGY: PROVING OUR TRACK RECORD About Hudbay PHASE 1: Repositioning PHASE 2: Optimization PHASE 3: Historical Work Lalor as a Gold Mine & Execution Expansion Potential Long Life & Mining Friendly Jurisdictions 2008 & 2009 – Au zone and 2018 – Completion of 2020 – Optimized mi
Slide 15: Snow Lake Gold Execution of Milestones
SNOW LAKE GOLD EXECUTION OF MILESTONES Stall mill Cu & Au recovery New Britannia mill FURTHER UPSIDE About Hudbay OPPORTUNITIES improvement expansion study results Potential to further increase study results annual production and Long Life & Ongoing Lalor 1901 prefeasibility study extend mine life b
Slide 16: Constructive Outlook for Copper and Gold
CONSTRUCTIVE OUTLOOK FOR COPPER AND GOLD • Copper prices declined in H1 2020 due to COVID-19 but have since increased to over $3.50/lb About Hudbay • Rebound has been driven in part by recovery in demand combined with supply disruptions Long Life & • Long term copper fundamentals remain robust with
Slide 17: 2020 A Year of Disciplined Investment
2020 A YEAR OF DISCIPLINED INVESTMENT COPPER PRODUCTION GROWTH WITH INCREASING EXPOSURE TO GOLD About Hudbay Long Life & Mining Friendly Cu Au1 Zn Jurisdictions (koz (kt) (kt) Au-Ag) Low Cost & Operational 320 Excellence 140 140 Free Cash Flow & Prudent Capital 125 Allocation 123 235 Experienced Man
Slide 18: Leading Organic Growth Pipeline
LEADING ORGANIC GROWTH PIPELINE HUDBAY HAS BUILT A DIVERSIFIED PORTFOLIO FOCUSED ON COPPER & GOLD GROWTH About Hudbay Long Life & RESOURCE FEASIBILITY STUDY EXPLORATION PRODUCTION Mining Friendly DEFINITION COMPLETE Jurisdictions Constancia North Low Cost & resource modelling expected Q1 2021 Consta
Slide 19: Strong Environmental, Social & Governance Performance
STRONG ENVIRONMENTAL, SOCIAL & GOVERNANCE (“ESG”) PERFORMANCE About Hudbay INDUSTRY LEADER IN RESPONSIBLE MINING ENVIRONMENT SOCIAL IMPACT HEALTH & SAFETY GOVERNANCE Long Life & Mining Friendly Jurisdictions GHG emissions declined Manitoba COVID-19 relief Constancia has the best Board refres
Slide 20: 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 Long Life & communities in which we operate Mining Friendly Jurisdictions • Engaging and working in collaboration with local h
Slide 21: 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 Long Life & Mining Friendly Continuous Optimization of Throughput & Recoveries Maria Reyna & Caballito Exploration Jurisdictions Exec
Slide 22: Appendix
PENDIX HEM TMX Bnyse —
Slide 23: 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 Long Life & Mining Friendly Jurisdictions PETER KUKIELSKI CASHEL MEAGHER STEVE DOUGLAS PRESIDENT & CEO SVP & COO SVP & CFO • More than 30 years of sector • Ex
Slide 24: Board of Directors
BOARD OF DIRECTORS About Hudbay STEPHEN A. LANG, CHAIR PETER KUKIELSKI, PRESIDENT & CEO Long Life & • Stephen has over 40 years of experience in the • Peter has more than 30 years of experience within Mining Friendly mining industry, including engineering, development the base & precious metals and
Slide 25: South America Business Unit
SOUTH AMERICA BUSINESS UNIT MINE About Hudbay Cusco TOWN RAILROAD CUSCO Long Life & ROAD Mining Friendly Jurisdictions Las Bambas Low Cost & Operational CONSTANCIA Excellence PERU Yauri Free Cash Flow & Prudent Capital Tintaya Allocation Antapaccay Experienced Management Lima Team Imata Copper Focus
Slide 26: Constancia Regional Potential
CONSTANCIA REGIONAL POTENTIAL MINERAL PROPERTIES WITHIN TRUCKING DISTANCE OF CONSTANCIA INFRASTRUCTURE About Hudbay Distance to Long Life & Property Process Description Mining Friendly Plant 0 5,000 10,000 Meters Jurisdictions • Community surface rights Quehuincha North Target agreement completed Ma
Slide 27: 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 Long Life & Mining Friendly high-grade skarn mineralization within 300m of Jurisdictions current northern edge of Constancia pit Low Cost &
Slide 28: Manitoba Business Unit
MANITOBA BUSINESS UNIT About Hudbay New Britannia Gold Mill 1,500 tpd capacity Long Life & Mining Friendly Snow Lake Jurisdictions Stall Base Metal Mill Low Cost & 3,800 tpd capacity LALOR MINE Operational ~4,500 tpd Excellence Free Cash Flow & Prudent Capital LALOR 777 Allocation 0 5km Experienced
Slide 29: Manitoba Flow Chart - 2020
MANITOBA FLOW CHART - 2020 TWO MINES FEEDING TWO OPERATING MILLS AND ZINC PLANT About Hudbay ORE CONCENTRATE/METAL Long Life & Mining Friendly ~4,000 tpd Jurisdictions Flin Flon Mill Low Cost & Copper Operational ~3,000 tpd Concentrate (6,000 tpd capacity) Excellence 777 Mine Free Cash Flow & Zinc P
Slide 30: Manitoba Flow Chart - 2023
MANITOBA FLOW CHART - 2023 ONE MINE FEEDING TWO OPERATING MILLS About Hudbay ORE CONCENTRATE/METAL Long Life & Mining Friendly Care & Maintenance Jurisdictions Flin Flon Mill Low Cost & Operational Reserve Exhausted (6,000 tpd capacity) Excellence 777 Mine Free Cash Flow & Zinc Prudent Capital ~3,00
Slide 31: 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 Long Life & Mining Friendly Jurisdictions 300% INCREASE IN IDENTIFIED RESERVES / PRODUCED GOLD FROM INITIAL RESERVE ESTIMATE Low Cost & Operational Inferred Excellence Material
Slide 32: 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 Long Life & Mining Friendly $2,500 $2,500 Jurisdictions $2,000 $2,000 $1,500 $1,500 Low Cost & Snow Lake Gold LOM Operational $1,000
Slide 33: Snow Lake Process Flow Chart - 2023
SNOW LAKE PROCESS FLOW CHART - 2023 About Hudbay Lalor Crushed Ore Long Life & Mining Friendly Jurisdictions Stall Mill New Britannia Mill1 Low Cost & Operational Excellence Grinding Grinding Free Cash Flow & Prudent Capital Allocation Flotation Flotation Experienced Management Team tails Cyanide Ta
Slide 34: Snow Lake Processing Logistics
SNOW LAKE PROCESSING LOGISTICS About Hudbay LALOR MINE 2020 10 years 2030 Source Ore Long Life & Mining Friendly SATELLITE GOLD DEPOSITS Jurisdictions 2030 8 years 2037 (WIM, 3 ZONE) Low Cost & Operational Processing STALL BASE METAL MILL Location Excellence 2020 10 years 2030 (WITH GOLD BY-PRODUCT)
Slide 35: 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 Long Life & within a stope optimization envelope Mining Friendly Jurisdictions • Expected to lead to a higher re
Slide 36: 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 Long Life & Mining Friendly defining a new gold-rich inferred resource estimate Jurisdictions SNOW• LAKE Si
Slide 37: 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 Long Life & Mining Friendly Asset Metal Type Reserves & Resources1 MINERAL PROPERTIES IN THE SNOW LAKE REGION Jurisdictions MINE Probable – 2,448kt @ 1.63%
Slide 38: 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 Long Life & Mining Friendly Jurisdictions RESERVES IN THE FLIN FLON AND SNOW LAKE CAMP (MILLION TONNES) Flin Flon 62.
Slide 39: Arizona Business Unit
ARIZONA BUSINESS UNIT About Hudbay Long Life & NEVADA, US Mining Friendly Miami Jurisdictions Elko Pinto Valley Phoenix Resolution Low Cost & Operational Ray Morenci Excellence Reno Florence MASON Safford Free Cash Flow & Prudent Capital Allocation Las Vegas Experienced ARIZONA, US Management Team S
Slide 40: 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 Long Life & Mining Friendly • Many of the remaining projects have material impediments to devel
Slide 41: 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 $3.00 Long Life & 120 104 (kt in con) (US$/lb, net) 97 Mining Friendly $2.00 Jurisdictions 60 $1.39 $1.37 $1.06 $1.09 $1.20 $1.19 $1
Slide 42: Rosemont Project History
ROSEMONT PROJECT HISTORY 2007 & 2008 2009 2010 2011 2012 2013 About Hudbay Long Life & Rosemont Mine Plan of Operations filed with U.S. Forest Service (July Arizona State Mine Inspector, Arizona Mined Land Mine Safety and Health Administration Number EPA Hazardous Waste Identification Number receive
Slide 43: 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 Long Life & early in the mine life Mining Friendly Jurisdictions • Several un-tested IP anomalies and potential to add additiona
Slide 44: 2020 Annual Guidance Update
2020 ANNUAL GUIDANCE UPDATE ON TRACK TO ACHIEVE 2020 ANNUAL GUIDANCE About Hudbay • Peru guidance reflects eight-week REVISED 2020 GUIDANCE SUMMARY Long Life & Mining Friendly temporary suspension Peru Manitoba Total Jurisdictions • 777 production and sales volume will Contained Metal in Concentrate
Slide 45: 3-Year Production Outlook
3-YEAR PRODUCTION OUTLOOK GROWING COPPER AND GOLD PRODUCTION About Hudbay Long Life & Mining Friendly CONTAINED METAL IN CONCENTRATE1 2020 GUIDANCE2 2021 GUIDANCE 2022 GUIDANCE Jurisdictions MANITOBA3 Low Cost & Copper tonnes 18,000 – 22,000 19,000 – 23,000 13,000 – 15,000 Operational Zinc tonnes 10
Slide 46: Peru Mineral Reserves
PERU MINERAL RESERVES AS AT JANUARY 1, 20201 About Hudbay Long Life & CATEGORY TONNES Cu (%) Mo (g/t) Au (g/t) Ag (g/t) Mining Friendly Jurisdictions CONSTANCIA1 Low Cost & Operational Proven 408,800,000 0.28 85 0.035 2.76 Excellence Probable 77,500,000 0.27 70 0.044 3.58 Free Cash Flow & Prudent Ca
Slide 47: Peru Mineral Resources
PERU MINERAL RESOURCES AS AT JANUARY 1, 20201 About Hudbay Long Life & CATEGORY TONNES Cu (%) Mo (g/t) Au (g/t) Ag (g/t) Mining Friendly Jurisdictions CONSTANCIA Low Cost & Measured 122,700,000 0.18 55 0.028 1.77 Operational Excellence Indicated 154,300,000 0.20 65 0.033 1,87 Free Cash Flow & Pruden
Slide 48: Snow Lake Reserves & Resources
SNOW LAKE RESERVES & RESOURCES AS AT JANUARY 1, 20201 About Hudbay Long Life & PROPERTY CATEGORY TONNES Cu (%) Zn (%) Au (g/t) Ag (g/t) Mining Friendly Jurisdictions Proven 7,276,000 0.57 6.27 2.42 29 Base Metal Zone Low Cost & Probable 1,739,000 0.60 4.15 3.83 31 Operational Proven 1,748,000 1.37 1
Slide 49: Snow Lake Reserves & Resources (Cont'd)
SNOW LAKE RESERVES & RESOURCES (CONT’D) AS AT JANUARY 1, 20201 About Hudbay Long Life & Mining Friendly PROPERTY TONNES Cu (%) Zn (%) Au (g/t) Ag (g/t) Jurisdictions Measured 980,000 0.43 6.79 2.2 30 1901 Base Metal Zone Low Cost & Indicated 1,090,000 0.30 10.07 1.5 33 Operational PEN II Indicated 4
Slide 50: Flin Flon Reserves & Resources
FLIN FLON RESERVES & RESOURCES AS AT JANUARY 1, 20201 About Hudbay Long Life & PROPERTY CATEGORY TONNES Cu (%) Zn (%) Au (g/t) Ag (g/t) Mining Friendly Jurisdictions Proven 2,122,000 1.44 4.55 2.01 27 777 Reserves Low Cost & Probable 459,000 1.11 4.11 1.75 26 Operational Excellence Total 777 Mineral
Slide 51: 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) Long Life & Proven 426,100,000 0.48 0.012 4.96 Mining Friendly Jurisdictions Probable 111,000,000 0.31 0.010 3.09 Low Cost & Total 2P Reserves 537,100,000 0.45
Slide 52: 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 53: 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 54: For More Information Contact
For More Information Contact: Candace Brûlé, Director, Investor Relations 416.814.4387 | candace.brule@hudbay.com
Hudbay Minerals — Investor Presentation (January 2021) on 6ix