Hudbay Minerals Inc · TSX:HBM
Hudbay Minerals — Shareholder Meeting (June 2012)
25 slides from Hudbay Minerals's shareholder meeting presentation, Jun 14, 2012
Slide 1: Applying 360° expertise to develop long-life, low-cost mines in the Americas
Applying 360° expertise to develop long-life, low-cost mines in the Americas
Slide 2: David Garofalo, President & Chief Executive Officer
DAVID GAROFALO President & Chief Executive Officer Applying 360° Expertise > 2
Slide 3: Forward-looking information
F Forward-looking d l ki iinformation f ti 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 pre
Slide 4: Note to U.S. investors
N t tto U Note U.S. S iinvestors t Information concerning Hudbay’s mineral properties has been prepared in accordance with the requirements of Canadian securities laws, which differ in material respects from the requirements of SEC Industry Guide 7. Under Securities and Exchange Commission (the “SEC
Slide 5: Our Vision: To become a top-tier operator of long-life, low-cost mines in the Americas
Our Vision: To become a top‐tier operator of long‐ life,, low‐cost mines in the Americas Applying 360° Expertise > 5
Slide 6: Metals market overview: Copper
M t l market Metals k t overview i Copper Copper Surplus / (Deficit) 2,000 $4.00 > Chronic supply deficits persist 1,000 $3.00 > Incentive price for new copper -- production estimated to be at (1,000) $2.00 least $3.00 per pound (2,000) $1.00 according to Brook Hunt (3,000) (4,000) -- 2001 2003 2005
Slide 7: Metals market overview: Zinc
M t l market Metals k t overview i Zinc Zinc Surplus / (Deficit) 2,000 $2.00 > Current large supply surplus expected to transition to deficit as 1,000 $1.60 large mines become exhausted -- $1.20 (1,000) $0.80 > Incentive price for new zinc (2,000) $0.40 production estimated at $1.20 according to Bro
Slide 8: Metals market overview: Gold
M t l market Metals k t overview i Gold Gold vs US 10 Year Yield > Low interest rate and easy 10 9 2000 1800 money environment continues 8 1600 to be very constructive for gold 7 1400 6 1200 % US$/oz 5 1000 4 800 3 600 2 400 1 200 0 0 Jan ‘90 ’92 ’94 ‘96 ‘98 ‘00 ‘02 ‘04 ‘06 ‘08 ‘10 ‘12 US$/oz 10 Yea
Slide 9: Capital markets volatility
C it l markets Capital k t volatility l tilit Disconnect between equity valuations and metal prices S&P TSX Metals Index vs Copper Price - 1 Year 110% 100% 90% 80% 70% 60% 50% Jun-11 Jun 11 Jul-11 Jul 11 Aug-11 Aug 11 Sep-11 Sep 11 Oct-11 Oct 11 Nov-11 Nov 11 Dec-11 Dec 11 Jan-12 Jan 12 Feb-12 Feb 1
Slide 10: Stringent criteria for growth
St i Stringent t criteria it i for f growth th Disciplined focus on per share metrics 1 1. Focus geographically 3 2 • on mining friendly, investment grade countries in the Americas 2. Focus geologically • on VMS and porphyry deposits 6 3. Acquire small, think big g 1 777 - Manitoba 2 Lalor - Manitob
Slide 11: Leading production growth
L di production Leading d ti growth th Focus in 2012 is continued progress of development stage assets 365% GROWTH 115% GROWTH 65% GROWTH (1) Cu Production Precious Metals Production Zn Production HudBay - Current Ops (2) Lalor (3) Constancia (4) Reed (5) (1) Silver converted to gold at a ratio of 5
Slide 12: Growing mineral reserves and resources per share
G Growing i mineral i l reserves and d resources per share h Commodity Exposure(1,2) Cu Eq/Share (lb Cu/sh) (1) Hudbay reserves and resources as of March 31, 2012. Measured and Indicated Resources do not include any Proven and Probable Reserves. (2) Commodity exposure calculated using commodity pric
Slide 13: Flagship 777 mine
Fl Flagship hi 777 mine i Steady production with low cash costs MANITOBA Mining Mi i C Costt (C$/tonne) 777 Winnipeg PROFILE Ownership 100% Life of Mine 9 years Applying 360°360° Applying Expertise PAGE Expertise 8 > 13
Slide 14: 777 mine: Expansion and underground exploration program underway
777 mine i Expansion and underground exploration program underway 777 Shaft 530m level 840m level Metres 0 100 200 300 Mined areas 1412m level Resources to be mined Exploration Target Areas 1412m level Applying 360° Expertise > 14
Slide 15: Lalor: First production imminent
L l Lalor First production imminent MANITOBA Snow Lake Ore Concentrator Trout Lake Lalor Project Snow 777 Mine Lake Lalor Flin Flon Chisel North Reed Amisk Flin Flon Lake Lake Ore Concentrator Hwy #39 Zinc Plant Reed Project N Hwy Winnipeg 25 km #10 PROFILE Ownership 100% Projected Life of Mine 20 y
Slide 16: Lalor: Multi year underground exploration program initiated
L l Lalor Multi year underground exploration program initiated Surface 0m 500m Vent Raise Production Shaft 750m H1/2012 H2/2012 2013 - 2014 2015 Exploration p Platform 1000m DUB-283 (Mar. 7, 2012) 6.12m 5.91 g/t Au, 31.6 g g/t Ag, g, 8.26% % Cu 1250m Base Metal Resource Gold & Copper-Gold Resource H
Slide 17: Reed: High grade copper deposit near existing infrastructure
R d Reed High grade copper deposit near existing infrastructure > 70% Hudbay ownership MANITOBA > High-grade, near-surface copper deposit Reed > Expected to add ~ 17,000 tonnes Cu/yr Winnipeg > Production set to commence PROFILE in late 2013 Ownership 70% Projected Life of Mine 5 years Construction
Slide 18: Constancia: Future large scale copper mine, near infrastructure
C Constancia t i Future large scale copper mine, near infrastructure Cusco CONSTANCIA PROJECT LOCATION MAP Xstrata – Las Bambas PERU First Quantum – Haquira APURIMAC Constancia Project Trujillo CUSCO DEPT. Pan Pacific – Quechua Lima PUNO C Cusco Constancia AREQUIPA DEPT. Xstrata – Antapaccay Arequip
Slide 19: Constancia: Early exploration success leads to expanded program
C Constancia t i Early exploration success leads to expanded program North Constancia Main 2012 Drill Target > Expand Pampacancha resource • 2 drills at P Pampacancha h untilil the remainder of the year Chilloroya Skarn Target High Grade Gold Target > Geophysics indicates Pampacancha Resource Cu-Au
Slide 20: Solid financial position
S lid fifinancial Solid i l position iti Available liquidity of $1.0 billion with no debt (1) Operating cash flow EDITDA ($millions) Available Liquidity $1.0 billion per share Shares Outstanding 171.9 million Long Term Debt 0 Annualized Dividend 2.6% (2) Yield (1) Includes cash and cash equivalents
Slide 21: Applying 360° expertise in each stage of mining cycle
A l i 360° expertise Applying ti iin each h stage t off mining i i cycle l Exploration Development Production Reclamation > Discovered > Currently > 777 Mine is a > Successfully 26 mines in 3 mines in consistently reclaimed 85 years development low-cost low cost 19 mines producer Applying 360° Exper
Slide 22: Growth of mineral deposits
G Growth th off mineral i lddeposits it Discoveries in the Greenstone Belt Flin Flon ⁄⁄ 62.5 62 5 Lalor Trout Lake 777 Stall Lake Chisel U/G Callinan Chisel Osborne Anderson Konuto Spruce Schist Lae Centennial Westarm Chisel Pit Initial resource Coronation White Lake Added resource Dickstone The min
Slide 23: Social responsibility
S i l responsibility Social ibilit Creating Sustainable Communities > Recent Life of Mine agreements signed with local communities in Peru > Operating mines are ISO 14001 and OHSAS 18001 EHS certified > Adopted Mining Association of Canada toward Sustainable Mining Initiative in Canada & Internation
Slide 24: 2012 Manitoba mine rescue winners
2012 M Manitoba it b mine i rescue winners i Applying 360° Expertise > 24
Slide 25: Our Vision: To become a top-tier operator of long-life, low-cost mines in the Americas
Our Vision: To become a top‐tier operator of long‐ life,, low‐cost mines in the Americas Applying 360° Expertise > 25