Hudbay Minerals Inc. (“Hudbay” or the “company”) (TSX,
NYSE: HBM) today released its third quarter 2024 financial
results. All amounts are in U.S. dollars, unless otherwise noted.
All production and cost amounts reflect the Copper Mountain mine on
a 100% basis, with Hudbay owning a 75% interest in the mine.
“Our enhanced operating platform delivered
strong operating and financial results with record gold production
in Manitoba and robust cost control across the business leading to
expanded margins,” said Peter Kukielski, President and Chief
Executive Officer. “The third quarter demonstrated Hudbay’s unique
copper and gold diversification, providing attractive free cash
flow generation and strong leverage to higher metal prices. New
quarterly record throughput levels were achieved at the New
Britannia mill, higher throughput rates were realized at
Constancia, and Copper Mountain delivered record high copper
recoveries. We are again improving our 2024 consolidated cash cost
guidance as we continue to perform ahead of expectations. We have
successfully delivered five consecutive quarters of meaningful free
cash flow generation, positioning us well to continue to advance
our many growth initiatives and unlock significant value in our
pipeline to further enhance our copper exposure.”
Delivered Strong Third Quarter Operating
and Financial Results, Led by Record Gold Production from Manitoba
Operations; 2024 Production Guidance Reaffirmed and Cost Guidance
Further Improved
- Achieved consolidated copper production of 31,354 tonnes, in
line with quarterly production cadence, and gold production of
89,073 ounces, far exceeding expectations, in the third quarter of
2024, representing an increase of 10% and 52%, respectively, from
the second quarter of 2024.
- Enhanced operating platform delivered strong quarterly
performance with record gold production at the Manitoba operations,
the completion of planned stripping activities at Pampacancha in
Peru and the benefits from stabilization and optimization
initiatives at the Copper Mountain mine in British Columbia.
- Reaffirmed full year 2024 consolidated production guidance for
all metals. Full-year consolidated copper production expected to
trend towards the lower end of the guidance range and consolidated
gold production expected to trend towards the higher end of the
guidance range.
- Strong operating cost performance with consolidated cash costi
and sustaining cash costi per pound of copper produced, net of
by-product creditsi, in the third quarter of 2024 of $0.18 and
$1.71, respectively, an improvement of 84% and 35%, respectively,
from the second quarter of 2024.
- Further improved 2024 annual operating cost guidance with
decreased consolidated cash costi guidance range of $0.65 to $0.85
per pound, an additional improvement from the previously updated
guidance range of $0.90 to $1.10 per pound, and decreased
consolidated sustaining cash cost guidance range of $1.75 to $2.20
per pound from original guidance of $2.00 to $2.45 per pound, as a
result of increased exposure to gold by-product credits and
continued strong cost control across all operations.
- Peru operations continued to benefit from strong mill
throughput, achieving a quarterly average of approximately 88,000
tonnes per day in the third quarter. The Pampacancha stripping
program to advance to higher grades was completed in late September
and is on track to achieve higher copper and gold grade ore in the
fourth quarter. Peru operations produced 21,220 tonnes of copper
and 20,331 ounces of gold in the third quarter of 2024, in line
with quarterly cadence expectations. Peru cash cost per pound of
copper produced, net of by-product creditsi, was $1.80 in the third
quarter and is expected to improve in the fourth quarter of 2024
with continued strong cost control and higher copper and gold
production.
- Manitoba operations produced 62,468 ounces of gold in the third
quarter of 2024, far exceeding management's quarterly cadence
expectations and achieving record quarterly production levels as
New Britannia continues to operate well above nameplate and
budgeted throughput levels and the Lalor mine continues to achieve
better-than-expected gold grades. Manitoba cash cost per ounce of
gold produced, net of by-product creditsi, was $372 during the
third quarter of 2024, a decrease of 52% compared to the second
quarter of 2024. Full-year Manitoba gold production is expected to
exceed the top end of the 2024 guidance range.
- British Columbia operations produced 6,736 tonnes of copper at
a cash cost per pound of copper produced, net of by-product
creditsi, of $1.81 in the third quarter of 2024. Achieved record
quarterly copper recoveries of 84% and strong unit cost performance
as a result of the successful operational stabilization efforts as
mine stripping activities accelerate and mill optimization
initiatives are underway. Full-year British Columbia copper
production is expected to be slightly below the lower end of the
2024 guidance range.
- Achieved revenue of $485.8 million and operating cash flow
before change in non-cash working capital of $186.3 million in the
third quarter of 2024. Strong financial results were driven by
higher realized gold prices as well as robust gold production in
Manitoba, while delivering on higher recovery, throughput and cost
control initiatives across all business units.
- Third quarter net earnings attributable to owners and earnings
per share attributable to owners were $49.8 million and $0.13,
respectively. After adjusting for items on a pre-tax basis such as
a non-cash gain of $2.0 million related to a quarterly revaluation
of the closed site environmental reclamation provision, a $5.2
million mark-to-market revaluation loss on various instruments such
as the gold prepayment liability, unrealized strategic gold and
copper hedges, investments and share-based compensation and a $2.2
million write-down of PP&E, among other items, third quarter
adjusted earningsi per share attributable to owners was $0.13.
- Adjusted EBITDAi was $206.2 million during the third quarter of
2024, a 42% increase compared to the second quarter of 2024.
- Cash and cash equivalents and short-term investments increased
by $233.5 million to $483.3 million during the first nine months of
2024 due to a successful equity offering and strong operating cash
flows bolstered by higher copper and gold prices, which enabled a
$412.1 million reduction in net debti during the first nine months
of 2024.
Accelerated Deleveraging and Improved
Balance Sheet Flexibility
- Hudbay's unique copper and gold diversification in Peru and
North America provides exposure to higher copper and gold prices
and attractive free cash flow generation.
- While a majority of revenues continue to be from copper, gold
is representing an increasing portion of total revenues at 36% in
the third quarter of 2024 and 33% year-to-date, compared to 27% and
26%, respectively, for the same periods in 2023, driven by higher
gold production and strong leverage to higher gold prices.
- During the third quarter of 2024, deleveraging efforts
continued with additional open market purchases of approximately
$48.5 million of Hudbay’s senior unsecured notes in July and August
2024 at a discount. Long-term debt reduced to $1,108.9 million at
September 30, 2024 from $1,287.5 million at December 31, 2023.
- On August 30, 2024, Hudbay completed the final monthly payment
to settle the gold prepayment liability that was used to fund the
refurbishment of the New Britannia gold mill. The elimination of
the gold prepayment liability will further increase the company's
exposure to higher gold production in Snow Lake.
- Impressive operating cash flow before change in non-cash
working capital generation of $186.3 million despite lower realized
copper prices compared to the second quarter of 2024, capitalizing
on higher gold production from Manitoba following the full
repayment of the gold prepayment liability in August.
- Achieved trailing 12 month adjusted EBITDAi of $839.8 million,
a substantial increase from $498.5 million for the 12 months ending
September 30, 2023.
- Reduced net debti to $625.6 million in the third quarter of
2024. The third quarter represents the fifth consecutive quarter of
lower net debt as a result of deleveraging efforts and capitalizing
on strong operating cash flow generation.
- The increase in cash and reduction in long-term debt
significantly reduced the company’s net debt to adjusted EBITDAi to
0.7x at September 30, 2024 compared to 1.6x at the end of 2023,
well within the targeted 1.2x net debt to adjusted EBITDAi ratio
outlined in the three prerequisites plan (the "3-P plan") for
advancing Copper World, including receipts of permits, a robust
definitive feasibility study plan and a prudent financing
strategy.
- Total liquidity substantially increased by 58% to $907.7
million at September 30, 2024 from $573.7 million at the end of
2023.
- Subsequent to the quarter end, further improved long-term
balance sheet resilience with a proactive three-year extension of
the company’s senior secured revolving credit facilities from
October 2025 to November 2028. The extended credit facilities
provide increased financial flexibility to accretively maintain the
4.50% coupon 2026 senior unsecured notes outstanding to maturity
and advance Copper World towards a sanctioning decision in
accordance with the 3-P plan. The $450 million revolving credit
facility includes an improved pricing grid reflecting the enhanced
financial position of Hudbay and features an opportunity to
increase the facility by an additional $150 million at Hudbay’s
discretion during the four-year tenor, providing additional
financial flexibility.
Advancing Growth Initiatives to Further
Enhance Copper and Gold Exposure
- The successful completion of the planned stripping program at
Pampacancha in September is expected to lead to significantly
higher copper and gold grades in the fourth quarter of 2024, which
together with maintaining strong operating performance at
Constancia is expected to continue to generate meaningful free cash
flow in Peru.
- The New Britannia mill continued to exceed expectations,
driving continued strong gold production and free cash flow
generation in Manitoba. The New Britannia mill achieved record
throughput levels of approximately 2,080 tonnes per day in the
third quarter, exceeding its original design capacity of 1,500
tonnes per day and its 2024 budgeted capacity of 1,800 tonnes per
day due to the successful implementation of process improvement
initiatives and effective preventative maintenance measures.
- Hudbay has successfully implemented post-acquisition plans to
stabilize the Copper Mountain operations through mining fleet
ramp-up activities and increased mill reliability and performance.
Achieved record mill availability of 95% and record copper
recoveries of 84% in the third quarter of 2024. Efforts are now
focused on optimizing the operations through execution of the
planned accelerated stripping program and mill throughput
improvement projects.
- Received the Aquifer Protection Permit for Copper World in
August, a key milestone and de-risking event in the advancement of
the project. Continued to progress the 3-P plan for sanctioning
Copper World, with transformed balance sheet near targeted levels
and the remaining key state permit progressing on track. As
disclosed in August, Hudbay commenced activities related to the
preparation of feasibility studies for Copper World, resulting in
an expected increase of $25 million in growth capital spending in
Arizona.
- Drill permitting for highly prospective Maria Reyna and
Caballito properties near Constancia continues to advance through
the multi-step regulatory process with the environmental impact
assessment applications approved for Maria Reyna in June and
Caballito in September.
- The development of an access drift to the 1901 deposit in Snow
Lake remains on track to reach mineralization in early 2025 and is
intended to enable confirmation of the optimal mining method for
the deposit and underground drilling to further evaluate the
orebody and upgrade inferred gold resources to reserves. Initiated
the development of an adjacent haulage drift to de-risk planned
full production in 2027.
- Large 2024 exploration program continues in Snow Lake with
eight drill rigs testing targets near Lalor and regional satellite
properties. Includes follow-up drilling at Lalor Northwest located
400 metres from Lalor's underground infrastructure and the testing
of a deep geophysical target at the Cook Lake North property.
- Continuing to advance Flin Flon tailings reprocessing
opportunities through metallurgical test work and early economic
evaluation to assess the possibility of producing critical minerals
and precious metals while reducing the environmental
footprint.
Summary of Third Quarter
Results
Consolidated copper production of 31,354 tonnes
in the third quarter of 2024 increased by 10% from the second
quarter of 2024, in line with the mine plan expectations.
Consolidated gold production of 89,073 ounces in the third quarter
exceeded expectations and increased by 52% from the second quarter
of 2024. Stronger gold production was driven by higher gold grades
and mill throughput in all operations, but most notably at the New
Britannia mill in Manitoba. With the completion of the planned
stripping program in Peru at the end of the third quarter,
post-quarter production results have already delivered higher
grades as mining of the high-grade zones at Pampacancha is
underway, in line with the mine plan.
In the third quarter of 2024, consolidated cash
cost per pound of copper produced, net of by-product creditsi, was
$0.18, compared to $1.14 in the second quarter of 2024. This
decrease was mainly the result of significantly higher by-product
credits, higher copper production and strong cost control leading
to lower mining, milling, treatment and refining costs.
Consolidated sustaining cash cost per pound of copper produced, net
of by-product creditsi, was $1.71 in the third quarter of 2024
compared to $2.65 in the second quarter of 2024. This decrease was
primarily due to the same reasons outlined above partially offset
by higher cash sustaining capital expenditures. Consolidated all-in
sustaining cash cost per pound of copper produced, net of
by-product creditsi, was $1.95 in the third quarter of 2024, lower
than $3.07 in the second quarter of 2024 due to significant gold
by-product credits and continued strong cost control across all
operations.
Cash generated from operating activities of
$146.2 million increased by 6% in the third quarter of 2024
compared to the second quarter of 2024. Operating cash flow before
change in non-cash working capital was $186.3 million during the
third quarter of 2024, reflecting a 53% increase compared to the
second quarter of 2024. The increase in operating cash flows before
change in non-cash working capital was primarily the result of
higher gold production and sales volumes in Manitoba, strong
operational cost performance across the business and higher
realized gold prices. Third quarter adjusted EBITDAi was $206.2
million, a 42% increase compared to $145.0 million in the second
quarter of 2024 and was impacted by the same factors affecting
operating cash flow as noted above.
Net earnings attributable to owners in the third
quarter of 2024 was $49.8 million, or $0.13 per share, compared to
net loss attributable to owners in the second quarter of 2024 of
$16.6 million, or $0.05 per share, which was impacted by various
non-cash charges for unrealized losses on strategic copper and gold
hedges and revaluation of share-based compensation due to a higher
share price.
Adjusted net earnings attributable to ownersi in
the third quarter of 2024 were $50.3 million, or $0.13 per share,
after adjusting for items on a pre-tax basis such as a non-cash
gain of $2.0 million related to a quarterly revaluation of closed
site environmental reclamation provision, a $5.2 million
mark-to-market revaluation loss on various instruments such as the
gold prepayment liability, unrealized strategic gold and copper
hedges, investments and stock based compensation and a $2.2 million
write-down of PP&E, among other items. This compares to
adjusted net earnings attributable to ownersi of $0.1 million, or
nil per share, in the second quarter of 2024.
As at September 30, 2024, total liquidity was
$907.7 million, including $443.3 million in cash and cash
equivalents, $40.0 million in short-term investments as well as
undrawn availability of $424.4 million under the company’s
revolving credit facilities. Net debti declined to $625.6 million
at the end of the third quarter of 2024 compared to $1,037.7
million at the end of 2023.
|
Consolidated Financial Condition ($000s) |
Sep. 30, 2024 |
Jun. 30, 2024 |
Dec. 31, 2023 |
|
Cash and cash equivalents and short-term investments |
483,273 |
523,767 |
249,794 |
|
Total long-term debt |
1,108,900 |
1,155,575 |
1,287,536 |
|
Net debt1 |
625,627 |
631,808 |
1,037,742 |
|
Working capital2 |
434,346 |
423,793 |
135,913 |
|
Total assets |
5,508,075 |
5,442,422 |
5,312,634 |
|
Equity3 |
2,537,845 |
2,482,545 |
2,096,811 |
|
Net debt to adjusted EBITDA1,4 |
0.7 |
0.8 |
1.6 |
| 1 Net debt
and net debt to adjusted EBITDA are non-IFRS financial performance
measures with no standardized definition under IFRS. For further
information, please see the "Non-IFRS Financial Performance
Measures" section of this news release. |
| 2 Working capital
is determined as total current assets less total current
liabilities as defined under IFRS and disclosed on the consolidated
interim financial statements. |
| 3 Equity
attributable to owners of the company. |
| 4 Net debt to
adjusted EBITDA for the 12 month period. |
|
|
|
Consolidated Financial Performance |
|
Three Months Ended |
|
|
|
Sep. 30, 2024 |
Jun. 30, 2024 |
Sep. 30, 2023 |
|
Revenue |
$000s |
485,773 |
425,520 |
480,456 |
|
Cost of sales |
$000s |
345,987 |
347,893 |
374,057 |
|
Earnings (loss) before tax |
$000s |
79,701 |
441 |
84,149 |
|
Net (loss) earnings |
$000s |
50,354 |
(20,377) |
45,490 |
|
Net (loss) earnings attributable to owners |
$000s |
49,762 |
(16,583) |
45,125 |
|
Basic earnings (loss) per share1 |
$/share |
0.13 |
(0.05) |
0.13 |
|
Adjusted earnings (loss) per share1,2 |
$/share |
0.13 |
0.00 |
0.07 |
|
Operating cash flow before change in non-cash working capital |
$ millions |
186.3 |
122.0 |
182.0 |
|
Adjusted EBITDA2 |
$ millions |
206.2 |
145.0 |
190.7 |
|
1 Attributable to owners of the company. |
|
2 Adjusted earnings (loss) per share attributable to owners and
adjusted EBITDA are non-IFRS financial performance measures with no
standardized definition under IFRS. For further information, please
see the “Non-IFRS Financial Performance Measures” section. |
|
|
|
Consolidated Production and Cost Performance |
|
Three Months Ended |
|
|
Sep. 30, 2024 |
Jun. 30, 2024 |
Sep. 30, 2023 |
|
Contained metal in concentrate and doré
produced1 |
|
|
|
|
|
Copper |
tonnes |
31,354 |
28,578 |
41,964 |
|
Gold |
ounces |
89,073 |
58,614 |
101,417 |
|
Silver |
ounces |
985,569 |
738,707 |
1,063,032 |
|
Zinc |
tonnes |
8,069 |
8,087 |
10,291 |
|
Molybdenum |
tonnes |
362 |
369 |
466 |
|
Payable metal sold |
|
|
|
|
|
Copper |
tonnes |
27,760 |
25,799 |
39,371 |
|
Gold2 |
ounces |
73,232 |
61,295 |
74,799 |
|
Silver2 |
ounces |
663,413 |
667,036 |
748,955 |
|
Zinc |
tonnes |
8,607 |
5,133 |
7,125 |
|
Molybdenum |
tonnes |
343 |
347 |
426 |
|
Consolidated cash cost per pound of copper
produced3 |
|
|
|
|
|
Cash cost |
$/lb |
0.18 |
1.14 |
1.10 |
|
Sustaining cash cost |
$/lb |
1.71 |
2.65 |
1.89 |
|
All-in sustaining cash cost |
$/lb |
1.95 |
3.07 |
2.04 |
| 1 Metal reported
in concentrate is prior to deductions associated with smelter
contract terms. |
| 2 Includes total
payable gold and silver in concentrate and in doré sold. |
| 3 Cash cost,
sustaining cash cost and all-in sustaining cash cost per pound of
copper produced, net of by-product credits, are non-IFRS financial
performance measures with no standardized definition under IFRS.
For further information, please see the “Non-IFRS Financial
Performance Measures” section of this news release. |
| |
2024 Production Guidance Reaffirmed and
Cash Cost Guidance Further Improved
Hudbay reaffirms its full year 2024 consolidated
production guidance for all metals as the company continues to
deliver strong operating performance and expects the fourth quarter
to be the highest copper production quarter in 2024, in line with
the company's quarterly cadence expectations. The company expects
2024 consolidated copper production to trend towards the lower end
of the guidance range and 2024 consolidated gold production to
trend towards the higher end of the guidance range.
In Peru, the fourth quarter is expected to be
the strongest quarter this year, and full year copper production is
expected to trend towards the lower end of the guidance range,
while gold production is expected to trend towards the higher end
of the guidance range. In British Columbia, Hudbay expects to
continue improving operating efficiencies in the fourth quarter,
and full year copper production is expected to be slightly below
the lower end of the guidance range, while full year gold
production is expected to be within the guidance ranges.
In Manitoba, Hudbay expects the strong operating
performance to continue into the fourth quarter, and full year gold
production is now expected to exceed the top end of the guidance
range and full year copper production is expected to trend towards
the higher end of the guidance range.
Hudbay is again improving its full year 2024
consolidated cash cost guidance range to $0.65 to $0.85 per pound
copper from the previously announced range of $0.90 to $1.10 per
pound and the original guidance range of $1.05 to $1.25 per pound.
The company is also improving its 2024 annual consolidated
sustaining cash cost guidance range to $1.75 to $2.20 per pound
copper from the original guidance range of $2.00 to $2.45 per
pound. This is a result of increased exposure to gold by-product
credits and continued strong cost control at all operations. The
company has reaffirmed all other 2024 guidance metrics.
Peru Operations Review
|
Peru Operations |
Three Months Ended |
|
|
|
Sep. 30, 2024 |
Jun. 30, 2024 |
Sep. 30, 2023 |
|
Constancia ore mined1 |
tonnes |
3,022,931 |
5,277,654 |
1,242,198 |
|
Copper |
% |
0.36 |
0.29 |
0.30 |
|
Gold |
g/tonne |
0.04 |
0.03 |
0.04 |
|
Silver |
g/tonne |
3.20 |
2.50 |
2.91 |
|
Molybdenum |
% |
0.02 |
0.01 |
0.01 |
|
Pampacancha ore mined1 |
tonnes |
1,777,092 |
1,288,789 |
5,894,013 |
|
Copper |
% |
0.48 |
0.41 |
0.53 |
|
Gold |
g/tonne |
0.27 |
0.20 |
0.30 |
|
Silver |
g/tonne |
6.23 |
3.83 |
4.22 |
|
Molybdenum |
% |
0.01 |
0.02 |
0.02 |
|
Total ore mined |
tonnes |
4,800,023 |
6,566,443 |
7,136,211 |
|
Strip ratio4 |
|
2.62 |
1.74 |
1.36 |
|
Ore milled |
tonnes |
8,137,248 |
7,718,962 |
7,895,109 |
|
Copper |
% |
0.32 |
0.30 |
0.43 |
|
Gold |
g/tonne |
0.11 |
0.07 |
0.21 |
|
Silver |
g/tonne |
3.70 |
2.85 |
3.75 |
|
Molybdenum |
% |
0.01 |
0.01 |
0.02 |
|
Copper recovery |
% |
82.6 |
83.1 |
85.2 |
|
Gold recovery |
% |
68.1 |
61.4 |
74.8 |
|
Silver recovery |
% |
67.0 |
63.9 |
73.2 |
|
Molybdenum recovery |
% |
39.0 |
46.3 |
37.2 |
|
Contained metal in concentrate |
|
|
|
|
Copper |
tonnes |
21,220 |
19,217 |
29,081 |
|
Gold |
ounces |
20,331 |
10,672 |
40,596 |
|
Silver |
ounces |
648,209 |
450,833 |
697,211 |
|
Molybdenum |
tonnes |
362 |
369 |
466 |
|
Payable metal sold |
|
|
|
|
Copper |
tonnes |
18,803 |
16,806 |
27,490 |
|
Gold |
ounces |
9,795 |
13,433 |
32,757 |
|
Silver |
ounces |
365,198 |
400,302 |
460,001 |
|
Molybdenum |
tonnes |
343 |
347 |
426 |
|
Combined unit operating cost2,3 |
$/tonne |
12.78 |
12.68 |
12.20 |
|
Cash cost3 |
$/lb |
1.80 |
1.78 |
0.83 |
|
Sustaining cash cost3 |
$/lb |
2.78 |
2.61 |
1.51 |
| 1 Reported
tonnes and grade for ore mined are estimates based on mine plan
assumptions and may not reconcile fully to ore milled. |
| 2 Reflects
combined mine, mill and general and administrative ("G&A")
costs per tonne of ore milled. Reflects the deduction of expected
capitalized stripping costs. |
| 3 Combined
unit costs, cash cost and sustaining cash cost per pound of copper
produced, net of by-product credits, are non-IFRS financial
performance measures with no standardized definition under IFRS.
For further information, please see the “Non-IFRS Financial
Performance Measures” section of this news release. |
| 4 Strip
ratio is calculated as waste mined divided by ore mined. |
| |
During the third quarter of 2024, the Peru
operations produced 21,220 tonnes of copper, 20,331 ounces of gold,
648,209 ounces of silver and 362 tonnes of molybdenum. Copper, gold
and silver production was higher than the second quarter of 2024 as
the operations continued to benefit from strong mill throughput,
averaging approximately 87,000 tonnes processed per day
year-to-date and achieving an average of 88,000 tonnes per day in
the third quarter. Year-to-date cost performance was also strong,
despite lower grades milled, achieving lower unit operating costs,
cash cost and sustaining cash cost compared to the comparative 2023
period. Cash cost also benefited from higher gold by-product sales
revenues throughout 2024. The planned stripping program at
Pampacancha was completed in late September, and mining activities
at Pampacancha are now focused on the next mining phase to deliver
higher copper and gold grades in the fourth quarter of 2024.
Total ore mined in the third quarter of 2024
decreased by 27% compared to the second quarter, in line with the
mine plan. Ore mined from Pampacancha during the third quarter
increased to 1.8 million tonnes compared to 1.3 million tonnes in
the second quarter with the completion of the planned stripping
program at Pampacancha in late September.
Ore milled during the third quarter of 2024
increased by 5% compared to the second quarter mainly as a result
of the treatment of softer ore from stockpiles. Similar to the
second quarter, ore milled included supplemental ore feed from
stockpiles during the quarter as the team completed pit stripping
activities. Milled copper and gold grades increased by 7% and 57%,
respectively, in the third quarter of 2024 compared to the second
quarter with higher grades being mined in both the Constancia and
Pampacancha pits and an increase in ore mined from Pampacancha.
Recoveries of copper and gold during the third
quarter of 2024 were 83% and 68%, respectively, with copper
recoveries relatively unchanged from the second quarter while gold
recoveries increased by 11%. This was in line with the
metallurgical models for the ore types that were being processed.
Copper and gold recoveries are expected to increase in the fourth
quarter as more higher grade ore is processed and less stockpile
ore is used to supplement mill feed.
Combined mine, mill and G&A unit operating
costsi were $12.78 per tonne in the third quarter of 2024, 1%
higher than the second quarter of 2024 primarily due to higher
mining costs, partially offset by lower milling costs and higher
ore milled.
Cash cost per pound of copper produced, net of
by-product creditsi, was $1.80 in the third quarter of 2024,
relatively unchanged from $1.78 in the second quarter of 2024 as
higher copper production offset higher mining and freight costs and
lower by-product credits.
Sustaining cash cost per pound of copper
produced, net of by-product creditsi, was $2.78 in the third
quarter of 2024, higher than $2.61 the second quarter of 2024 due
to higher sustaining capital expenditures.
Hudbay expects to achieve its 2024 production
and cost guidance range for all metals in Peru as the fourth
quarter is expected to be the strongest quarter in Peru in 2024.
Peru 2024 full year copper production is expected to trend towards
the lower end of the guidance range due to lower than expected
grades, while gold production is expected to trend towards the
higher end of the guidance range due to a larger portion of the
feed coming from higher gold grade Pampacancha stockpiles. Cash
cost is expected to be favourably positioned at the lower end of
the cost guidance range primarily due to high gold by-product
credits.
The company is evaluating opportunities to
further increase mill throughput in the medium-to-long-term after
the Peruvian Ministry of Energy and Mines approved a regulatory
change in June 2024 to allow mining companies in Peru to increase
throughput by up to 10% above permitted levels.
Manitoba Operations
Review
|
Manitoba Operations |
|
Three Months Ended |
|
|
|
Sep. 30, 2024 |
Jun. 30, 2024 |
Sep. 30, 2023 |
|
Lalor |
|
|
|
|
|
Ore mined |
tonnes |
411,295 |
385,478 |
367,491 |
|
Gold |
g/tonne |
5.45 |
3.75 |
5.08 |
|
Copper |
% |
0.91 |
0.69 |
1.02 |
|
Zinc |
% |
2.73 |
2.76 |
3.31 |
|
Silver |
g/tonne |
30.45 |
22.29 |
27.8 |
|
New Britannia |
|
|
|
|
|
Ore milled |
tonnes |
191,298 |
167,899 |
146,927 |
|
Gold |
g/tonne |
6.77 |
5.31 |
6.93 |
|
Copper |
% |
0.93 |
0.94 |
1.22 |
|
Zinc |
% |
1.12 |
0.92 |
0.9 |
|
Silver |
g/tonne |
30.24 |
24.42 |
23.88 |
|
Gold recovery1 |
% |
90 |
90 |
88.8 |
|
Copper recovery |
% |
92.8 |
94.4 |
97.4 |
|
Silver recovery1 |
% |
79.9 |
83.1 |
82 |
|
Stall Concentrator |
|
|
|
|
Ore milled |
tonnes |
222,621 |
229,527 |
255,516 |
|
Gold |
g/tonne |
4.23 |
3.02 |
3.7 |
|
Copper |
% |
0.89 |
0.59 |
0.77 |
|
Zinc |
% |
4.12 |
4.05 |
4.88 |
|
Silver |
g/tonne |
30.2 |
21.74 |
28.82 |
|
Gold recovery |
% |
70.5 |
65.5 |
67.8 |
|
Copper recovery |
% |
88.3 |
85.4 |
93.9 |
|
Zinc recovery |
% |
88.1 |
87.1 |
82.6 |
|
Silver recovery |
% |
57.8 |
54.2 |
64.9 |
|
Total contained metal in concentrate and
doré1 |
|
|
|
Gold |
ounces |
62,468 |
43,488 |
56,213 |
|
Copper |
tonnes |
3,398 |
2,642 |
3,580 |
|
Zinc |
tonnes |
8,069 |
8,087 |
10,291 |
|
Silver |
ounces |
281,397 |
210,647 |
264,752 |
|
Total payable metal sold |
|
|
|
|
Gold |
ounces |
57,238 |
42,763 |
36,713 |
|
Copper |
tonnes |
2,931 |
2,429 |
2,925 |
|
Zinc |
tonnes |
8,607 |
5,133 |
7,125 |
|
Silver |
ounces |
244,974 |
197,486 |
197,952 |
|
Combined unit operating cost2,3 |
C$/tonne |
211 |
225 |
217 |
|
Gold cash cost |
$/oz |
372 |
771 |
670 |
|
Gold sustaining cash cost3 |
$/oz |
553 |
1,163 |
939 |
|
1 Gold and silver recovery includes total recovery from concentrate
and doré. |
|
2 Combined unit cost, cash cost, sustaining cash cost per pound of
copper produced, net of by-product credits, gold cash cost and
sustaining cash cost per ounce of gold produced, net of by-product
credits, are non-IFRS financial performance measures with no
standardized definition under IFRS. For further information, please
see the “Non-IFRS Financial Performance Measures” section of this
news release. |
|
3 Reflects combined mine, mill and G&A costs per tonne of ore
milled. |
| |
The Manitoba operations delivered record results during the
third quarter of 2024, continuing to exceed expectations in
performance and efficiency. The operations achieved a new quarterly
record for gold production at 62,468 ounces in the third quarter of
2024, representing a 44% increase from the second quarter of 2024.
The operations also produced 3,398 tonnes of copper, 8,069 tonnes
of zinc and 281,397 ounces of silver during the third quarter of
2024, with copper and silver being 29% and 34% higher,
respectively, than the second quarter and zinc relatively
unchanged. The increased gold and silver production in the quarter
is due to the company’s strategy of mining and allocating more
Lalor gold ore feed to New Britannia to achieve higher recoveries,
combined with higher grade ore mined in the quarter.
Total ore mined at Lalor in the third quarter of
2024 was 7% higher than the second quarter of 2024. Gold, copper
and silver grades mined were 45%, 32% and 37% higher, respectively,
compared with the second quarter of 2024, while zinc grades mined
were 1% lower. Performance from the Lalor mine was strong,
benefiting from improved longhole muck fragmentation and a
consistent higher-grade mining sequence that surpassed forecasted
metal grades. In August, the company successfully completed a
five-day planned maintenance program aimed at enhancing the
efficiency and reliability of the key infrastructure at the mine.
Ongoing modifications to stope design further enhanced mucking
efficiency throughout the lifecycle of stopes.
The New Britannia mill had another quarter of
exceptional performance with the mill operating consistently above
nameplate capacity of 1,500 tonnes per day and achieving a new
quarterly record with an average throughput of 2,080 tonnes per day
in the third quarter. Plant availability continues to improve,
supported by low-capital projects aimed at further increasing
throughput while continuing to achieve targeted gold recoveries of
90%. These efforts align with the long-term objectives of
maximizing gold production by processing more high-grade ore from
Lalor through the New Britannia mill, leading to higher gold
recoveries. Notably, enhancements in the elution and stripping
cycles contributed to increased gold doré production. Recoveries of
gold, copper and silver at New Britannia were 90%, 93% and 80%,
respectively, in the third quarter of 2024.
At the Stall mill, there was a slight reduction
in throughput as more ore was diverted to New Britannia. Benefits
from recent recovery improvement programs continue to be realized
with gold recoveries of 71% and 68% achieved in the third quarter
and year-to-date, respectively, compared to 64% in the first nine
months of 2023. Efforts to continue to optimize recovery were
advanced with the installation of new elongated cyclones in one of
the two milling circuits late in third quarter. These cyclones are
designed to improve grind size and, pending positive performance
results, could be implemented across other circuits. Additionally,
transitioning operational and maintenance responsibilities for the
external crusher from contractors to the in-house team has resulted
in more efficient cost management, supporting long-term savings at
the Snow Lake operations.
Combined mine, mill and G&A unit operating
costsi in the third quarter of 2024 were C$211 per tonne,
representing a 6% decrease compared to the second quarter of 2024
as a result of higher tonnes processed and lower mining costs,
partially offset by higher milling costs.
Cash cost per ounce of gold produced, net of
by-product creditsi, in the third quarter of 2024 was $372, a
meaningful decrease of 52% compared to second quarter of 2024 due
to significantly higher gold production and higher by-product
credits, partially offset by higher milling, G&A and freight
costs.
Sustaining cash cost per ounce of gold produced,
net of by-product creditsi, in the third quarter of 2024 was $553,
a meaningful decrease of 52% compared to the second quarter of
2024, primarily due to the same factors affecting cash cost and
lower sustaining capital expenditures during the quarter.
Hudbay now expects to exceed the top end of the
2024 gold production guidance range in Manitoba driven by
outperformance at New Britannia with throughput achieving new
record levels and the Lalor mine delivering better-than-expected
gold grades by focusing on ore quality improvements. The company
also expects Manitoba copper production to trend towards the higher
end of the 2024 guidance range and is well on track to achieve zinc
and silver 2024 production guidance. Similarly, the company expects
2024 gold cash cost to be favourably positioned at the lower end of
the cost guidance range, reflecting the strong cost control and
gold production achieved to date.
Progress on the 1901 exploration drift is on
track to intersect mineralization by early 2025, laying the
groundwork for the 1901 haulage drift that will support full
production from the 1901 deposit by 2027. Diamond drilling will
soon follow to evaluate the orebody and optimize the mining
approach for future conversion of inferred mineral resources into
mineral reserves.
Environmental initiatives continue to progress
well in Manitoba. At the Anderson tailings facility, enhanced
deposition efficiency enabled deferral of dam construction capital
to future years, while a new trial exploring alternative shore
deposition techniques shows promising potential for further gains
in efficiency. The operations remain on track to meet their
environmental targets for 2024, with significant reductions in
propane and diesel consumption achieved year-to-date compared to
2023. In addition, an initiative at Lalor to recycle natural
groundwater for use as process water has successfully reduced the
mine's reliance on fresh water.
British Columbia Operations
Review
|
British Columbia Operations1 |
Three Months Ended |
|
|
|
|
Sep. 30, 2024 |
Jun. 30, 2024 |
Sep. 30, 2023 |
|
Ore mined2 |
tonnes |
3,098,863 |
2,164,722 |
3,792,568 |
|
Strip ratio3 |
|
6.05 |
7.61 |
2.96 |
|
Ore milled |
tonnes |
3,363,176 |
3,232,427 |
3,158,006 |
|
Copper |
% |
0.24 |
0.25 |
0.36 |
|
Gold |
g/tonne |
0.09 |
0.07 |
0.08 |
|
Silver |
g/tonne |
0.73 |
1.01 |
1.40 |
|
Copper recovery |
% |
84.1 |
82.3 |
80.9 |
|
Gold recovery |
% |
67.3 |
57.2 |
56.1 |
|
Silver recovery |
% |
71.2 |
73.9 |
71.3 |
|
Total contained metal in
concentrate3 |
|
|
|
|
Copper |
tonnes |
6,736 |
6,719 |
9,303 |
|
Gold |
ounces |
6,274 |
4,454 |
4,608 |
|
Silver |
ounces |
55,963 |
77,227 |
101,069 |
|
Total payable metal sold |
|
|
|
|
Copper |
tonnes |
6,026 |
6,564 |
8,956 |
|
Gold |
ounces |
6,199 |
5,099 |
5,329 |
|
Silver |
ounces |
53,241 |
69,248 |
91,002 |
|
Combined unit operating cost4,5 |
C$/tonne |
15.58 |
19.65 |
24.88 |
|
Cash cost5 |
$/lb |
1.81 |
2.67 |
2.67 |
|
Sustaining cash cost5 |
$/lb |
5.06 |
5.56 |
3.39 |
|
1 Copper Mountain mine results are stated at 100%. Hudbay
owns 75% of Copper Mountain mine. |
|
2 Reported tonnes and grade for ore mined are estimates based
on mine plan assumptions and may not reconcile fully to ore
milled. |
|
3 Strip ratio is calculated as waste mined divided by ore
mined. |
|
4 Reflects combined mine, mill and G&A costs per tonne of
ore milled. Reflects the deduction of expected capitalized
stripping costs. |
|
5 Combined unit operating cost, cash cost and sustaining cash
cost per pound of copper produced, net of by-product credits, are
non-IFRS financial performance measures with no standardized
definition under IFRS. For further information, please see the
“Non-IFRS Financial Performance Measures” section of this news
release. |
|
|
Since acquiring Copper Mountain in June 2023,
Hudbay has been focused on advancing operational stabilization
plans, including opening up the mine by re-activating the full
mining fleet, adding additional mining faces, optimizing the ore
feed to the plant and implementing plant improvement initiatives
that mirror the successful processes at Constancia. These
stabilization plans have successfully increased the total tonnes
moved and resulted in stronger mill performance as demonstrated by
record high mill availability of 95% and above-target copper
recoveries of 84% in the third quarter of 2024. As a result,
year-to-date mill performance has resulted in the highest mill
availability and highest copper recoveries achieved at the Copper
Mountain mine in the last decade. Similarly, the stabilization
efforts have successfully reduced combined unit operating costs to
C$19.56 per tonne year-to-date, compared to C$21.38 per tonne
milled in second half of 2023 (or first six months since
acquisition).
Efforts are now focused on optimizing the
operations throughout the balance of 2024 and into 2025. Mining
activities will continue to execute the three-year accelerated
stripping program intended to bring higher grade ore into the mine
plan. Feasibility engineering has commenced to debottleneck and
increase the nominal plant capacity to its permitted capacity of
50,000 tonnes per day earlier than contemplated in the most recent
technical report.
During the third quarter of 2024, the British
Columbia operations produced 6,736 tonnes of copper, 6,274 ounces
of gold and 55,963 ounces of silver. Copper production was slightly
higher than the second quarter of 2024, while gold production
increased by 41% and silver production decreased by 28% compared to
the second quarter of 2024. This was primarily a result of the head
grades from the use of stockpiled ore to feed the mill.
Total ore mined at Copper Mountain in the third
quarter of 2024 was 3.1 million tonnes, an increase of 43% compared
to the second quarter of 2024. As planned, ore stockpiles were
utilized as ore feed to the mill while the mine operation team
increased waste stripping activities. Total material moved
continued to ramp up in the quarter to 23.0 million tonnes,
compared to 16.5 million tonnes in the same period last year, as a
result of effective usage of the mining fleet to execute the
accelerated stripping program to access higher head grades. The
focus in the third quarter of 2024 was on mining efficiencies and
operator recruitment to effectively utilize the available haul
trucks fleet. As a result, total material moved is expected to
continue to increase quarter-over-quarter as per the mine
plan.
The mill processed 3.4 million tonnes of ore
during the third quarter of 2024, a 4% increase compared to the
second quarter of 2024, benefiting from stabilization and
reliability initiatives within the mill processing circuit. The
average mill availability during the quarter increased to 95%,
while maintaining a stable throughput rate. Mill throughput in the
third quarter of 2024 was limited by unplanned maintenance and
elevated clay material which impacted the second crushing circuit.
During the third quarter, a number of initiatives were advanced to
address these issues and other identified constraints and to
improve throughput to targeted levels, with the benefits expected
to be realized in the fourth quarter of 2024.
Copper recoveries of 84.1% in the third quarter
of 2024 were higher than the second quarter, exceeding management’s
expectations despite processing lower grades as the operations
improved the regrind circuit constraint and implemented the
flotation operational strategy improvements, including reagent
selection and dose modification. Similarly, milled gold grades were
higher in the third quarter than in the second quarter of 2024,
resulting in higher gold recoveries of 67.3% in the third quarter
of 2024.
Combined mine, mill and G&A unit operating
costs in the third quarter of 2024 were C$15.58 per tonne milled,
21% lower than the second quarter of 2024. This is primarily due to
lower mining and milling costs, higher ore milled and the benefits
from the various stabilization initiatives implemented over the
course of this year. Combined unit operating costs are expected to
continue to benefit from the execution of the accelerated stripping
program and the implementation of optimization initiatives at
Copper Mountain.
Cash cost per pound of copper produced, net of
by-product creditsi, in the third quarter of 2024 was $1.81. Cash
cost was 32% lower than the second quarter of 2024 for the same
reasons as mentioned above regarding the unit cost variance.
Sustaining cash cost per pound of copper
produced, net of by-product creditsi, in the third quarter of 2024
was $5.06, 9% lower than the second quarter of 2024. This improved
for the same reasons as mentioned above, partially offset by higher
sustaining capital expenditures.
Hudbay expects to be slightly below the low end
of the 2024 guidance range for copper production in British
Columbia as a result of lower grades in stockpiled ore and the
ramp-up of stabilization efforts throughout the year. The company
expects gold and silver production to be within the 2024 guidance
range in British Columbia. Cash cost for the nine months ended
September 30, 2024 was above the higher end of the 2024 guidance
range; however, Hudbay anticipates fourth quarter cash cost to
continue to improve, which is expected to result in full year cash
cost to be near the upper end of the 2024 cost guidance range.
Continued Debt Reduction and Improved
Balance Sheet Flexibility
The company took several prudent measures in the
third quarter of 2024 to further improve its balance sheet strength
and flexibility:
- Repurchased and retired an additional $48.5 million of
senior unsecured notes – The company made open market
purchases of $13.4 million of the 2026 senior unsecured notes and
$35.1 million of the 2029 senior unsecured notes during the
quarter. As a result, a total of $82.6 million of senior unsecured
notes have been repurchased and retired since the beginning of the
year.
- Delivered the final $16.9 million under gold forward
sale and prepay agreement – Hudbay completed the last
monthly gold delivery in August 2024, resulting in the full
repayment of the gold prepay facility which was used to fund the
refurbishment of the New Britannia gold mill.
- Three-year extension of revolving credit facilities to
2028 – Subsequent to the quarter end, Hudbay proactively
extended its senior secured revolving credit facilities by three
years from October 2025 to November 2028 and negotiated the
flexibility to leave the company’s 4.50% 2026 senior unsecured
notes outstanding to maturity as the company advances Copper World
towards a sanctioning decision in accordance with the 3-P plan. The
newly extended $450 million revolving credit facility, with the
existing banking syndicate, includes an improved pricing grid
reflecting the enhanced financial position of Hudbay, and features
an opportunity to increase the facility by an additional $150
million at Hudbay’s discretion during the four-year tenor,
providing additional financial flexibility. The revolving credit
facilities are currently undrawn (excluding letters of credit),
having repaid $100 million of prior drawings associated with the
Copper Mountain acquisition in the first half of 2024.
Hudbay has delivered five consecutive quarters
of meaningful free cash flow generation as a result of recent
brownfield investments in its operations, continuous improvement
efforts and steady cost control across the business. In the last
twelve months, the company has repaid a total of $296 million of
debt and gold prepay liabilities.
As a result of continued deleveraging efforts
and cash flow generation, the company has substantially reduced net
debti to $625.6 million at September 30, 2024 from $1,037.7 million
at the end of 2023. The net debt reduction, together with higher
levels of adjusted EBITDAi over the last twelve months, has
significantly improved Hudbay’s net debt to adjusted EBITDA ratioi
to 0.7x compared to 1.6x at the end of 2023. The improved balance
sheet flexibility and accelerated debt reduction significantly
advances the company’s progress as part of its 3-P plan for
sanctioning Copper World, and results in the successful achievement
of the targeted 1.2x net debt to 12-month trailing adjusted EBITDA
ratio well ahead of schedule.
Advancing Permitting at Copper
World
In August 2024, Hudbay received the Aquifer
Protection Permit for the Copper World project from the Arizona
Department of Environmental Quality (“ADEQ”). The company
proactively engaged with the ADEQ, ensuring a transparent and
thorough permitting process by providing comprehensive and detailed
information. The issuance of this permit is a key milestone in the
advancement of Copper World, which is a standalone operation
requiring state and local permits and is expected to produce 85,000
tonnes of copper per year over a 20-year mine life.
There are three key state permits required for Copper World
sanctioning:
- Mined Land Reclamation Plan –
Completed – the Mined Land Reclamation Plan was
initially approved by the Arizona State Mine Inspector in October
2021 and was subsequently amended and approved to reflect a larger
private land project footprint. This approval was challenged in
state court, but the challenge was dismissed in May 2023.
- Aquifer Protection Permit –
Completed – the Aquifer
Protection Permit was received on August 29, 2024 from the ADEQ
following a robust process that included detailed analysis by the
agency and Hudbay, along with a public comment period that was
completed in the second quarter of 2024.
- Air Quality Permit – On Track
– the Air Quality Permit application was submitted
to the ADEQ in late 2022 and follows a similar robust process,
including a public comment period that concluded in September
2024.
With the receipt of the Aquifer Protection
Permit on August 29, 2024, Hudbay announced that it commenced
activities related to the preparation of feasibility studies for
Copper World, resulting in an expected $25 million increase in
growth capital spending in Arizona, compared to the original annual
guidance of $20 million.
Hudbay intends to commence a minority joint
venture partner process after receiving the Air Quality Permit. The
potential joint venture partner is anticipated to participate in
the funding of definitive feasibility study activities in 2025 as
well as in the final project design and construction for Copper
World.
The opportunity to sanction Copper World is not
expected until 2026 based on current estimated timelines. Once in
production, Copper World is expected to be a meaningful copper
producer in the U.S. domestic copper supply chain, which will be
required to help secure growing U.S. metal demand related to
increased manufacturing capacity, infrastructure development,
increased energy independence and domestic battery supply chain and
production needs. The “Made-in-America” copper cathode anticipated
to be produced at Copper World is expected to be sold entirely to
domestic U.S. customers and would make Copper World the third
largest cathode producer in the U.S. Hudbay is pleased with the
level of local support received at the public comment meetings and
looks forward to providing significant social and environmental
benefits for the community and local economy in Arizona. Over the
proposed initial 20-year mine life, the company expects to
contribute more than $850 million in U.S. taxes, including
approximately $170 million in taxes to the state of Arizona. Hudbay
also expects Copper World to create more than 400 direct jobs and
up to 3,000 indirect jobs in Arizona.
Copper Mountain Stabilization Complete
and Optimization Initiatives Underway
Stabilization Phase Completed
Since acquiring Copper Mountain in June 2023,
Hudbay’s stabilization efforts have been focused on ramping up the
mining fleet to execute a planned accelerated stripping campaign to
gain access to higher grades, as well as plant improvement
initiatives to improve mill reliability and recoveries.
- Mine Ramp-up Activities Completed –
Successfully remobilized all 28 haul trucks and added five
additional haul trucks this year to execute the planned three-year
accelerated stripping campaign at a lower cost and avoid contractor
mining costs.
- Mill Stabilization Activities Completed –
Implemented several mill initiatives, including reprogramming the
mill expert system, installing advanced grinding control
instrumentation, flotation operational strategy improvements and
improved maintenance practices. This has resulted in record mill
availability of 95% and record copper recovery of 84% being
achieved in the third quarter of 2024.
- Operating Costs Stabilized – Achieved
sequential quarterly improvements in unit operating costs and cash
costs this year with the third quarter of 2024 being the lowest
cost quarter at Copper Mountain since Hudbay's acquisition in June
2023.
- Corporate Synergies Target Achieved – Exceeded
the targeted $10 million in annualized corporate synergies.
Optimization Phase Underway
Efforts are now focused on several optimization
initiatives at Copper Mountain to access higher grades, further
improve mill throughput and increase copper production and
operating cash flows.
- Accelerated Stripping – Commenced a three-year
accelerated stripping program to mitigate the substantially reduced
stripping that occurred over the four years prior to Hudbay’s
acquisition. The stripping program is intended to unlock access to
higher grade ore and further benefit operating costs.
- Mill Throughput Optimization – Advancing
various engineering studies to increase mill throughput to its
permitted levels of 50,000 tonnes per day earlier than was
originally contemplated in the technical report, including the
potential conversion of the third ball mill to a SAG mill to
alleviate capacity limitations.
- On Track to Achieve Three-Year Operating Efficiencies
Target – Stabilization initiatives have resulted in
improved operating efficiencies, as demonstrated by improved mill
throughput, record copper recoveries and lower unit operating costs
since Hudbay’s acquisition. On track to realize the three-year
annual operating efficiencies target of $20 million.
New Britannia Mill Performance Exceeding
Expectations and Driving Higher Gold Production
The New Britannia mill has been consistently
exceeding performance expectations, achieving throughput levels of
1,650 tonnes per day in 2023, more than 1,850 tonnes per day in the
first half of 2024, and reaching a quarterly record of 2,080 tonnes
per day in the third quarter of 2024. Hudbay completed the
brownfield investment in New Britannia in 2021 and refurbished the
mill with a nominal capacity of 1,500 tonnes per day to provide
additional processing capacity at the Snow Lake operations and
allow the company to achieve higher gold recoveries of
approximately 90% as Lalor transitioned to the higher gold and
copper areas of the mine plan. The Snow Lake operations achieved
record quarterly gold production in the third quarter of 2024, and
Hudbay now expects gold production in Manitoba to exceed the top
end of the 2024 gold production guidance range of 200,000
ounces.
In August 2024, the company completed the final
payment under the New Britannia gold prepay facility, which further
enhances the company’s exposure to higher gold production in Snow
Lake. With approximately two million ounces of contained gold in
current mineral reserve estimates and another 1.4 million ounces of
contained gold in inferred mineral resources, the New Britannia
investment has unlocked significant value in Snow Lake. This could
be further enhanced by regional exploration upside and the current
strong gold price environment.
In the first quarter of 2024, Hudbay received a
permit approval to increase the production rate at New Britannia to
2,500 tonnes per day, which will provide the opportunity to process
more Lalor ore at the New Britannia mill and create additional
processing capacity at Stall for potential new regional discoveries
in Snow Lake.
Exploration Update
Large Exploration Drill Program Continues in
Snow Lake
Hudbay continues to execute its 2024 exploration
program with the goal of extending known mineralization near the
Lalor deposit to further extend mine life as well as to find a new
anchor deposit within trucking distance of the Snow Lake processing
infrastructure. The 2024 program included the largest geophysical
program in the company’s history in Snow Lake, with surface
electromagnetic surveys detecting targets at more than 1,000 metres
below surface and covering a 25-square-kilometre area including the
Cook Lake claims that had been previously untested by modern deep
geophysics.
The company had eight drill rigs turning in Snow
Lake during the third quarter, including two drills completing
follow-up drilling at Lalor Northwest, located within 400 metres of
the existing Lalor underground infrastructure. Six drill rigs were
testing new geophysical targets and completing follow-up drilling
at potential regional satellite deposits at the Cook Lake, Reed,
Rail and Bur properties. One of the geophysical targets is a very
strong deep anomaly located at Cook Lake North, approximately six
kilometres from Lalor. Drilling activities are expected to continue
throughout the winter season and assay results are pending.
Hudbay continues to advance the development of
the exploration drift from the existing Lalor ramp towards the 1901
deposit, and the drift is expected to reach mineralization in early
2025. The company plans to conduct definition drilling in 2025 to
confirm the optimal mining method, evaluate the orebody geometry
and continuity, and convert inferred mineral resources in the gold
lenses to mineral reserves. In October, Hudbay initiated the
development of an adjacent haulage drift to further de-risk future
full production from the 1901 deposit in 2027.
Advancing Engineering Work for Flin Flon
Tailings Reprocessing
- Zinc Plant Tailings – Metallurgical test work
continues following positive results from the initial confirmatory
drill program completed earlier this year in the section of the
tailings facility that was utilized by the zinc plant for 25 years.
The results confirmed the grades of precious metals and critical
minerals previously estimated from historical zinc plant records.
An early economic study to evaluate the opportunity to reprocess
the zinc plant tailings has confirmed the potential for a
technically viable reprocessing alternative, and further
engineering work is underway.
- Mill Tailings – The company continues to
advance metallurgical test work on the opportunity to reprocess
Flin Flon mill tailings where 100 million tonnes of tailings were
deposited for over 90 years. An early economic study on the mill
tailings is planned.
Maria Reyna and Caballito Drill Permits Expected
in 2025
Hudbay controls a large, contiguous block of
mineral rights with the potential to host mineral deposits in close
proximity to the Constancia processing facility, including the past
producing Caballito property and the highly prospective Maria Reyna
property. The company commenced early exploration activities at
Maria Reyna and Caballito after completing a surface rights
exploration agreement with the community of Uchucarcco in August
2022. As part of the drill permitting process, environmental impact
assessment applications were submitted for the Maria Reyna property
in November 2023 and for the Caballito property in April 2024. The
environmental impact assessment (EIA) for Maria Reyna was approved
by the government in June 2024 and the Caballito EIA was approved
in September 2024. This represents one of several steps in the
drill permitting process, which is expected to be completed in
2025.
Website Links
Hudbay:
www.hudbayminerals.com
Management’s Discussion and Analysis:
https://www.hudbayminerals.com/MDA1124
Financial Statements:
https://www.hudbayminerals.com/FS1124
Conference Call and Webcast
|
Date: |
Wednesday, November 13, 2024 |
|
Time: |
11:00 a.m. ET |
|
Webcast: |
www.hudbay.com |
| Dial
in: |
1-844-763-8274 or
647-484-8814 |
| |
|
Qualified Person and NI 43-101
The technical and scientific information in this
news release related to the company’s material mineral projects has
been approved by Olivier Tavchandjian, P. Geo, Senior Vice
President, Exploration and Technical Services. Mr. Tavchandjian is
a qualified person pursuant to National Instrument 43-101 –
Standards of Disclosure for Mineral Projects (“NI 43-101”).
For a description of the key assumptions,
parameters and methods used to estimate mineral reserves and
resources at Hudbay's material mineral properties, as well as data
verification procedures and a general discussion of the extent to
which the estimates of scientific and technical information may be
affected by any known environmental, permitting, legal title,
taxation, sociopolitical, marketing or other relevant factors,
please see the technical reports for the company’s material
properties as filed by Hudbay on SEDAR+ at www.sedarplus.ca and
EDGAR at www.sec.gov.Non-IFRS Financial Performance
Measures
Adjusted net earnings (loss) attributable to
owners, adjusted net earnings (loss) per share attributable to
owners, adjusted EBITDA, net debt, cash cost, sustaining and all-in
sustaining cash cost per pound of copper produced, cash cost and
sustaining cash cost per ounce of gold produced, combined unit
costs and ratios based on these measures are non-IFRS performance
measures. These measures do not have a meaning prescribed by IFRS
and are therefore unlikely to be comparable to similar measures
presented by other issuers. These measures should not be considered
in isolation or as a substitute for measures prepared in accordance
with IFRS and are not necessarily indicative of operating gross
profit or cash flow from operations as determined under IFRS. Other
companies may calculate these measures differently.
Management believes adjusted net earnings (loss)
attributable to owners and adjusted net earnings (loss) per share
attributable to owners provides an alternate measure of the
company’s performance for the current period and gives insight into
its expected performance in future periods. These measures are used
internally by the company to evaluate the performance of its
underlying operations and to assist with its planning and
forecasting of future operating results. As such, the company
believes these measures are useful to investors in assessing the
company’s underlying performance. Hudbay provides adjusted EBITDA
to help users analyze the company’s results and to provide
additional information about its ongoing cash generating potential
in order to assess its capacity to service and repay debt, carry
out investments and cover working capital needs. Net debt is shown
because it is a performance measure used by the company to assess
its financial position. Net debt to adjusted EBITDA is shown
because it is a performance measure used by the company to assess
its financial leverage and debt capacity. Cash cost, sustaining and
all-in sustaining cash cost per pound of copper produced are shown
because the company believes they help investors and management
assess the performance of its operations, including the margin
generated by the operations and the company. Cash cost and
sustaining cash cost per ounce of gold produced are shown because
the company believes they help investors and management assess the
performance of its Manitoba operations. Combined unit cost is shown
because Hudbay believes it helps investors and management assess
the company’s cost structure and margins that are not impacted by
variability in by-product commodity prices.
The following tables provide detailed
reconciliations to the most comparable IFRS measures.
Adjusted Net Earnings (Loss) Attributable to
Owners Reconciliation
|
|
Three Months Ended |
|
(in $ millions) |
|
Sep. 30, 2024 |
|
Jun. 30, 2024 |
|
Sep. 30, 2023 |
|
|
Net earnings for the period |
50.4 |
|
(20.4) |
|
45.5 |
|
|
Tax expense |
29.3 |
|
20.8 |
|
38.7 |
|
|
Earnings before tax |
79.7 |
|
0.4 |
|
84.2 |
|
|
Adjusting items: |
|
|
|
|
Mark-to-market adjustments1 |
5.2 |
|
19.5 |
|
1.3 |
|
|
Foreign exchange loss |
(3.3) |
|
2.1 |
|
(0.6) |
|
|
Re-evaluation adjustment - environmental provision2 |
2.0 |
|
(2.7) |
|
(32.4) |
|
|
Inventory adjustments |
1.6 |
|
— |
|
— |
|
|
Acquisition related costs |
— |
|
— |
|
0.1 |
|
|
Reduction of obligation to renounce flow-through expenditures |
(2.0) |
|
(0.3) |
|
— |
|
|
Restructuring charges |
— |
|
0.3 |
|
2.3 |
|
|
Write-down/loss on disposal of PP&E |
2.2 |
|
2.1 |
|
— |
|
|
Adjusted earnings before income taxes |
85.4 |
|
21.4 |
|
54.9 |
|
|
Tax expense |
(29.3) |
|
(20.8) |
|
(38.7) |
|
|
Tax impact on adjusting items |
(5.2) |
|
(2.4) |
|
8.2 |
|
|
Adjusted net earnings |
50.9 |
|
(1.8) |
|
24.4 |
|
|
Adjusted net earnings attributable to non-controlling
interest: |
|
|
|
|
Net loss for the period |
(0.6) |
|
3.8 |
|
(0.4) |
|
|
Adjusting items, including tax impact |
— |
|
(1.9) |
|
0.2 |
|
|
Adjusted net earnings - attributable to
owners |
50.3 |
|
0.1 |
|
24.2 |
|
|
Adjusted net earnings ($/share) - attributable to
owners |
0.13 |
|
0.00 |
|
0.07 |
|
|
Basic weighted average number of common shares outstanding
(millions) |
393.6 |
|
368.3 |
|
346.7 |
|
| 1 Includes changes
in fair value of the gold prepayment liability, Canadian junior
mining investments, other financial assets and liabilities at fair
value through net earnings or loss and share-based compensation
expenses. |
| 2 Changes from
movements to environmental reclamation provisions are primarily
related to the Flin Flon operations, which were fully depreciated
as of June 30, 2022, as well as other Manitoba non-operating
sites. |
|
|
Adjusted EBITDA Reconciliation
|
|
Three Months Ended |
|
(in $ millions) |
Sep. 30, 2024 |
|
Jun. 30, 2024 |
|
Sep. 30, 2023 |
|
|
Net (loss) earnings for the period |
50.4 |
|
(20.4) |
|
45.5 |
|
|
Add back: |
|
|
|
|
Tax expense (recovery) |
29.3 |
|
20.8 |
|
38.7 |
|
|
Net finance expense |
26.0 |
|
44.3 |
|
30.9 |
|
|
Other expenses |
7.9 |
|
11.2 |
|
8.9 |
|
|
Depreciation and amortization |
97.5 |
|
97.6 |
|
113.8 |
|
|
Amortization of deferred revenue and variable consideration
adjustment |
(9.5) |
|
(11.5) |
|
(16.8) |
|
|
Adjusting items (pre-tax): |
|
|
|
|
Re-evaluation adjustment - environmental provision |
2.0 |
|
(2.7) |
|
(32.4) |
|
|
Inventory adjustments |
1.6 |
|
— |
|
— |
|
|
Realized loss on non-QP hedges |
(2.1) |
|
(2.6) |
|
— |
|
|
Share-based compensation expenses 1 |
3.1 |
|
8.3 |
|
2.1 |
|
|
Adjusted EBITDA |
206.2 |
|
145.0 |
|
190.7 |
|
|
1 Share-based compensation expenses reflected in cost of sales and
selling and administrative expenses. |
|
|
|
|
|
|
|
|
Net Debt Reconciliation
|
(in $ thousands) |
Sep. 30, 2024 |
|
Jun. 30, 2024 |
|
Dec. 31, 2023 |
|
|
Total long-term debt |
1,108,900 |
|
1,155,575 |
|
1,287,536 |
|
|
Less: Cash and cash equivalents |
(443,273) |
|
(483,767) |
|
(249,794) |
|
|
Less: Short-term investments |
(40,000) |
|
(40,000) |
|
— |
|
|
Net debt |
625,627 |
|
631,808 |
|
1,037,742 |
|
|
(in $ millions, except net debt to adjusted EBITDA ratio) |
|
|
|
|
Net debt |
625.6 |
|
631.8 |
|
1,037.7 |
|
|
Adjusted EBITDA (12-month period) |
839.8 |
|
824.3 |
|
647.8 |
|
|
Net debt to adjusted EBITDA |
0.7 |
|
0.8 |
|
1.6 |
|
|
Trailing Adjusted EBITDA |
Three Months Ended |
|
(in $ millions) |
Sep. 30, 2024 |
|
Jun. 30, 2024 |
|
Mar. 31, 2024 |
|
Dec. 31, 2023 |
|
Sept. 30, 2023 |
|
Jun. 30, 2023 |
|
|
Net earnings (loss) for the period |
50.4 |
|
(20.4) |
|
18.5 |
|
33.5 |
|
45.5 |
|
(14.9) |
|
|
Add back: |
|
|
|
|
|
|
|
Tax expense (recovery) |
29.3 |
|
20.8 |
|
49.3 |
|
47.5 |
|
38.7 |
|
(15.8) |
|
|
Net finance expense |
26.0 |
|
44.3 |
|
44.0 |
|
48.9 |
|
30.9 |
|
30.5 |
|
|
Other expenses |
7.9 |
|
11.2 |
|
16.3 |
|
10.6 |
|
8.9 |
|
13.9 |
|
|
Depreciation and amortization |
97.5 |
|
97.6 |
|
109.3 |
|
121.9 |
|
113.8 |
|
88.7 |
|
|
Amortization of deferred revenue and variable consideration
adjustment |
(9.5) |
|
(11.5) |
|
(23.2) |
|
(26.5) |
|
(16.8) |
|
(18.1) |
|
|
Adjusting items (pre-tax): |
|
|
|
|
|
|
|
Re-evaluation adjustment - environmental provision |
2.0 |
|
(2.7) |
|
(5.3) |
|
34.0 |
|
(32.4) |
|
(4.7) |
|
|
Inventory adjustments |
1.6 |
|
— |
|
— |
|
1.4 |
|
— |
|
0.9 |
|
|
Realized loss on non-QP hedges |
(2.1) |
|
(2.6) |
|
— |
|
— |
|
— |
|
— |
|
|
Post-employment plan curtailment |
— |
|
— |
|
(0.4) |
|
— |
|
— |
|
— |
|
|
Share-based compensation expenses2 |
3.1 |
|
8.3 |
|
5.7 |
|
3.1 |
|
2.1 |
|
0.7 |
|
|
Adjusted EBITDA |
206.2 |
|
145.0 |
|
214.2 |
|
274.4 |
|
190.7 |
|
81.2 |
|
|
LTM1,3 |
839.8 |
|
824.3 |
|
760.5 |
|
647.8 |
|
|
|
|
1 LTM (last twelve months) as of September 30, 2024, June 30, 2024,
March 31, 2024 and December 31, 2023. |
|
2 Share-based compensation expense reflected in cost of sales and
administrative expenses. |
|
3 Annual consolidated results may not be calculated based on
amounts presented in this table due to rounding. |
|
|
Copper Cash Cost Reconciliation
|
Consolidated |
Three Months Ended |
|
Net pounds of copper produced1 |
|
|
|
|
|
(in thousands) |
Sep. 30, 2024 |
Jun. 30, 2024 |
Sep. 30, 2023 |
|
|
Peru |
46,782 |
42,366 |
64,112 |
|
|
British Columbia |
14,850 |
14,813 |
20,510 |
|
|
Manitoba |
7,491 |
5,825 |
7,893 |
|
|
Net pounds of copper produced |
69,123 |
63,004 |
92,515 |
|
|
1 Contained copper in concentrate. |
|
Consolidated |
Three Months Ended |
|
|
Sep. 30, 2024 |
Jun. 30, 2024 |
Sep. 30, 2023 |
|
Cash cost per pound of copper produced |
$000s |
|
$/lb |
|
$000s |
|
$/lb |
|
$000s |
|
$/lb |
|
|
Mining |
90,679 |
|
1.31 |
|
93,049 |
|
1.47 |
|
104,547 |
|
1.13 |
|
|
Milling |
85,145 |
|
1.23 |
|
88,065 |
|
1.40 |
|
88,021 |
|
0.95 |
|
|
G&A |
38,016 |
|
0.55 |
|
35,240 |
|
0.56 |
|
36,107 |
|
0.39 |
|
|
Onsite costs |
213,840 |
|
3.09 |
|
216,354 |
|
3.43 |
|
228,675 |
|
2.47 |
|
|
Treatment & refining |
21,202 |
|
0.31 |
|
22,562 |
|
0.36 |
|
32,882 |
|
0.36 |
|
|
Freight & other |
24,415 |
|
0.35 |
|
21,728 |
|
0.34 |
|
26,853 |
|
0.29 |
|
|
Cash cost, before by-product credits |
259,457 |
|
3.75 |
|
260,644 |
|
4.13 |
|
288,410 |
|
3.12 |
|
|
By-product credits |
(246,724) |
|
(3.57) |
|
(188,671) |
|
(2.99) |
|
(187,023) |
|
(2.02) |
|
|
Cash cost, net of by-product credits |
12,733 |
|
0.18 |
|
71,973 |
|
1.14 |
|
101,387 |
|
1.10 |
|
|
Consolidated |
Three Months Ended |
|
|
Sep. 30, 2024 |
Jun. 30, 2024 |
Sep. 30, 2023 |
|
Supplementary cash cost information |
$000s |
$/lb1 |
$000s |
$/lb1 |
$000s |
$/lb1 |
|
|
By-product credits2: |
|
|
|
|
|
|
|
|
Zinc |
24,326 |
|
0.35 |
14,916 |
|
0.23 |
17,099 |
|
0.18 |
|
|
Gold |
188,957 |
|
2.73 |
136,189 |
|
2.16 |
129,954 |
|
1.41 |
|
|
Silver |
18,347 |
|
0.27 |
18,088 |
|
0.29 |
16,724 |
|
0.18 |
|
|
Molybdenum & other |
15,094 |
|
0.22 |
19,478 |
|
0.31 |
23,246 |
|
0.25 |
|
|
Total by-product credits |
246,724 |
|
3.57 |
188,671 |
|
2.99 |
187,023 |
|
2.02 |
|
|
Reconciliation to IFRS: |
|
|
|
|
|
|
|
|
Cash cost, net of by-product credits |
12,733 |
|
|
71,973 |
|
|
101,387 |
|
|
|
|
By-product credits |
246,724 |
|
|
188,671 |
|
|
187,023 |
|
|
|
|
Treatment and refining charges |
(21,202) |
|
|
(22,562) |
|
|
(32,882) |
|
|
|
|
Share-based compensation expense |
322 |
|
|
613 |
|
|
149 |
|
|
|
|
Inventory adjustments |
1,598 |
|
|
— |
|
|
— |
|
|
|
|
Past service pension costs |
2,786 |
|
|
— |
|
|
— |
|
|
|
|
Change in product inventory |
1,828 |
|
|
9,982 |
|
|
3,374 |
|
|
|
|
Royalties |
3,746 |
|
|
1,570 |
|
|
1,253 |
|
|
|
|
Depreciation and amortization3 |
97,452 |
|
|
97,646 |
|
|
113,753 |
|
|
|
|
Cost of sales4 |
345,987 |
|
|
347,893 |
|
|
374,057 |
|
|
|
| 1 Per pound of
copper produced. |
| 2 By-product
credits are computed as revenue per consolidated financial
statements, amortization of deferred revenue and pricing and volume
adjustments. |
| 3 Depreciation is
based on concentrate sold. |
| 4 As per
consolidated interim financial statements. |
| |
|
Peru |
Three Months Ended |
|
(in thousands) |
Sep. 30, 2024 |
Jun. 30, 2024 |
Sep. 30, 2023 |
|
|
Net pounds of copper produced1 |
46,782 |
42,366 |
64,112 |
|
| 1
Contained copper in concentrate. |
|
Peru |
Three Months Ended |
|
|
Sep. 30, 2024 |
Jun. 30, 2024 |
Sep. 30, 2023 |
|
Cash cost per pound of copper produced |
$000s |
|
$/lb |
|
$000s |
|
$/lb |
|
$000s |
|
$/lb |
|
|
Mining |
37,647 |
|
0.81 |
|
31,306 |
|
0.74 |
|
33,875 |
|
0.53 |
|
|
Milling |
48,535 |
|
1.04 |
|
51,335 |
|
1.21 |
|
46,996 |
|
0.73 |
|
|
G&A |
19,830 |
|
0.42 |
|
19,349 |
|
0.46 |
|
20,912 |
|
0.33 |
|
|
Onsite costs |
106,012 |
|
2.27 |
|
101,990 |
|
2.41 |
|
101,783 |
|
1.59 |
|
|
Treatment & refining |
11,366 |
|
0.24 |
|
11,081 |
|
0.26 |
|
19,143 |
|
0.30 |
|
|
Freight & other |
14,130 |
|
0.30 |
|
12,593 |
|
0.30 |
|
17,040 |
|
0.26 |
|
|
Cash cost, before by-product credits |
131,508 |
|
2.81 |
|
125,664 |
|
2.97 |
|
137,966 |
|
2.15 |
|
|
By-product credits |
(47,245) |
|
(1.01) |
|
(50,251) |
|
(1.19) |
|
(84,793) |
|
(1.32) |
|
|
Cash cost, net of by-product credits |
84,263 |
|
1.80 |
|
75,413 |
|
1.78 |
|
53,173 |
|
0.83 |
|
|
Peru |
Three Months Ended |
|
|
Sep. 30, 2024 |
Jun. 30, 2024 |
Sep. 30, 2023 |
|
Supplementary cash cost information |
$000s |
|
$/lb1 |
|
$000s |
|
$/lb1 |
$000s |
|
$/lb1 |
|
|
By-product credits2: |
|
|
|
|
|
|
|
|
Gold3 |
22,945 |
|
0.49 |
21,550 |
|
0.51 |
51,459 |
|
0.80 |
|
|
Silver3 |
9,214 |
|
0.20 |
9,704 |
|
0.23 |
10,088 |
|
0.16 |
|
|
Molybdenum |
15,086 |
|
0.32 |
18,997 |
|
0.45 |
23,246 |
|
0.36 |
|
|
Total by-product credits |
47,245 |
|
1.01 |
50,251 |
|
1.19 |
84,793 |
|
1.32 |
|
|
Reconciliation to IFRS: |
|
|
|
|
|
|
|
|
Cash cost, net of by-product credits |
84,263 |
|
|
75,413 |
|
|
53,173 |
|
|
|
|
By-product credits |
47,245 |
|
|
50,251 |
|
|
84,793 |
|
|
|
|
Treatment and refining charges |
(11,366) |
|
|
(11,081) |
|
|
(19,143) |
|
|
|
|
Inventory adjustments |
206 |
|
|
— |
|
|
— |
|
|
|
|
Share-based compensation expenses |
98 |
|
|
199 |
|
|
45 |
|
|
|
|
Change in product inventory |
1,133 |
|
|
1,101 |
|
|
4,137 |
|
|
|
|
Royalties |
2,117 |
|
|
929 |
|
|
1,015 |
|
|
|
|
Depreciation and amortization4 |
57,242 |
|
|
58,860 |
|
|
80,625 |
|
|
|
|
Cost of sales5 |
180,938 |
|
|
175,672 |
|
|
204,645 |
|
|
|
|
1 Per pound of copper produced. |
| 2 By-product
credits are computed as revenue per consolidated financial
statements, including amortization of deferred revenue and pricing
and volume adjustments. |
| 3 Gold and silver
by-product credits do not include variable consideration
adjustments with respect to stream arrangements. |
| 4 Depreciation is
based on concentrate sold. |
|
5 As per IFRS consolidated interim financial statements. |
|
British Columbia |
Three Months Ended |
|
(in thousands) |
Sep. 30, 2024 |
Jun. 30, 2024 |
Sep. 30, 2023 |
|
Net pounds of copper produced1 |
14,850 |
14,813 |
20,510 |
| 1 Contained copper
in concentrate. |
|
British Columbia |
Three Months Ended |
|
|
Sep. 30, 2024 |
Jun. 30, 2024 |
Sep. 30, 2023 |
|
Cash cost per pound of copper produced |
$000s |
|
$/lb |
|
$000s |
|
$/lb |
|
$000s |
|
$/lb |
|
|
Mining |
12,918 |
|
0.87 |
|
19,463 |
|
1.31 |
|
29,251 |
|
1.43 |
|
|
Milling |
19,707 |
|
1.33 |
|
21,508 |
|
1.45 |
|
24,102 |
|
1.17 |
|
|
G&A |
5,788 |
|
0.39 |
|
5,442 |
|
0.37 |
|
5,050 |
|
0.25 |
|
|
Onsite costs |
38,413 |
|
2.59 |
|
46,413 |
|
3.13 |
|
58,403 |
|
2.85 |
|
|
Treatment & refining |
3,307 |
|
0.22 |
|
4,199 |
|
0.29 |
|
4,905 |
|
0.24 |
|
|
Freight & other |
3,002 |
|
0.20 |
|
3,461 |
|
0.23 |
|
3,693 |
|
0.18 |
|
|
Cash cost, before by-product credits |
44,722 |
|
3.01 |
|
54,073 |
|
3.65 |
|
67,001 |
|
3.27 |
|
|
By-product credits |
(17,891) |
|
(1.20) |
|
(14,523) |
|
(0.98) |
|
(12,234) |
|
(0.60) |
|
|
Cash cost, net of by-product credits |
26,831 |
|
1.81 |
|
39,550 |
|
2.67 |
|
54,767 |
|
2.67 |
|
|
British Columbia |
Three Months Ended |
|
|
Sep. 30, 2024 |
Jun. 30, 2024 |
Sep. 30, 2023 |
|
Supplementary cash cost information |
$000s |
|
$/lb1 |
|
$000s |
|
$/lb1 |
|
$000s |
|
$/lb1 |
|
|
By-product credits2: |
|
|
|
|
|
|
|
|
|
Gold |
16,259 |
|
1.09 |
12,204 |
|
0.82 |
|
10,120 |
|
0.50 |
|
|
Silver |
1,632 |
|
0.11 |
2,319 |
|
0.16 |
|
2,114 |
|
0.10 |
|
|
Total by-product credits |
17,891 |
|
1.20 |
14,523 |
|
0.98 |
|
12,234 |
|
0.60 |
|
|
Reconciliation to IFRS: |
|
|
|
|
|
|
|
|
|
Cash cost, net of by-product credits |
26,831 |
|
|
39,550 |
|
|
|
54,767 |
|
|
|
|
By-product credits |
17,891 |
|
|
14,523 |
|
|
|
12,234 |
|
|
|
|
Treatment and refining charges |
(3,307) |
|
|
(4,199) |
|
|
|
(4,905) |
|
|
|
|
Change in product inventory |
(550) |
|
|
11,290 |
|
|
|
3 |
|
|
|
|
Royalties |
1,629 |
|
|
641 |
|
|
|
237 |
|
|
|
|
Depreciation and amortization3 |
12,548 |
|
|
14,042 |
|
|
|
6,255 |
|
|
|
|
Cost of sales4 |
55,042 |
|
|
75,847 |
|
|
|
68,591 |
|
|
|
| 1 Per pound of copper produced. |
| 2 By-product credits are computed as revenue per
consolidated financial statements, including pricing and volume
adjustments. |
| 3 Depreciation is based on concentrate sold. |
| 4 As per
consolidated interim financial statements. |
| |
Sustaining and All-in Sustaining Cash Cost
Reconciliation
|
Consolidated |
Three Months Ended |
|
|
Sep. 30, 2024 |
Jun. 30, 2024 |
Sep. 30, 2023 |
|
All-in sustaining cash cost per pound of copper
produced |
$000s |
$/lb |
$000s |
$/lb |
$000s |
$/lb |
|
|
Cash cost, net of by-product credits |
12,733 |
0.18 |
71,973 |
1.14 |
101,387 |
1.10 |
|
|
Cash sustaining capital expenditures |
101,610 |
1.47 |
92,973 |
1.48 |
72,193 |
0.78 |
|
|
Capitalized exploration |
— |
— |
300 |
0.00 |
— |
— |
|
|
Royalties |
3,746 |
0.06 |
1,570 |
0.03 |
1,253 |
0.01 |
|
|
Sustaining cash cost, net of by-product
credits |
118,089 |
1.71 |
166,816 |
2.65 |
174,833 |
1.89 |
|
|
Corporate selling and administrative expenses & regional
costs |
12,843 |
0.18 |
19,771 |
0.32 |
10,971 |
0.12 |
|
|
Accretion and amortization of decommissioning and community
agreements1 |
3,935 |
0.06 |
6,544 |
0.10 |
3,309 |
0.03 |
|
|
All-in sustaining cash cost, net of by-product
credits |
134,867 |
1.95 |
193,131 |
3.07 |
189,113 |
2.04 |
|
|
Reconciliation to property, plant and equipment
additions: |
|
|
|
|
|
|
|
|
Property, plant and equipment additions |
76,708 |
|
75,223 |
|
77,454 |
|
|
|
Capitalized stripping net additions |
49,304 |
|
43,374 |
|
21,762 |
|
|
|
Total accrued capital additions |
126,012 |
|
118,597 |
|
99,216 |
|
|
|
Less other non-sustaining capital costs2 |
36,599 |
|
37,665 |
|
37,968 |
|
|
|
Total sustaining capital costs |
89,413 |
|
80,932 |
|
61,248 |
|
|
|
Capitalized lease and equipment financing payments |
10,234 |
|
9,575 |
|
7,199 |
|
|
|
Community agreement cash payments |
312 |
|
678 |
|
1,953 |
|
|
|
Accretion and amortization of decommissioning and restoration
obligations3 |
1,651 |
|
1,788 |
|
1,793 |
|
|
|
Cash sustaining capital expenditures |
101,610 |
|
92,973 |
|
72,193 |
|
|
| 1 Includes accretion
of decommissioning relating to non-productive sites, and accretion
and amortization of current community agreements. |
| 2 Other
non-sustaining capital costs include Arizona capitalized costs,
capitalized interest, capitalized exploration and growth capital
expenditures |
| 3 Includes
amortization of decommissioning and restoration PP&E assets and
accretion of decommissioning and restoration liabilities related to
producing sites. |
| |
|
Peru |
Three Months Ended |
|
|
Sep. 30, 2024 |
Jun. 30, 2024 |
Sep. 30, 2023 |
|
Sustaining cash cost per pound of copper
produced |
$000s |
$/lb |
$000s |
$/lb |
$000s |
$/lb |
|
|
Cash cost, net of by-product credits |
84,263 |
1.80 |
75,413 |
1.78 |
53,173 |
0.83 |
|
|
Cash sustaining capital expenditures |
43,710 |
0.93 |
33,801 |
0.80 |
42,607 |
0.66 |
|
|
Capitalized exploration1 |
— |
— |
300 |
0.01 |
— |
— |
|
|
Royalties |
2,117 |
0.05 |
929 |
0.02 |
1,015 |
0.02 |
|
|
Sustaining cash cost per pound of copper
produced |
130,090 |
2.78 |
110,443 |
2.61 |
96,795 |
1.51 |
|
| 1 Only includes
exploration costs incurred for locations near to existing mine
operations. |
|
British Columbia |
Three Months Ended |
|
|
Sep. 30, 2024 |
Jun. 30, 2024 |
Sep. 30, 2023 |
|
Sustaining cash cost per pound of copper
produced |
$000s |
$/lb |
$000s |
$/lb |
$000s |
$/lb |
|
|
Cash cost, net of by-product credits |
26,831 |
1.81 |
39,550 |
2.67 |
54,767 |
2.67 |
|
|
Cash sustaining capital expenditures |
46,612 |
3.14 |
42,109 |
2.84 |
14,487 |
0.71 |
|
|
Royalties |
1,629 |
0.11 |
641 |
0.05 |
237 |
0.01 |
|
|
Sustaining cash cost per pound of copper
produced |
75,072 |
5.06 |
82,300 |
5.56 |
69,491 |
3.39 |
|
| |
|
|
|
|
|
|
|
Gold Cash Cost and Sustaining Cash Cost Reconciliation
|
Manitoba |
Three Months Ended |
|
(in thousands) |
Sep. 30, 2024 |
Jun. 30, 2024 |
Sep. 30, 2023 |
|
Net ounces of gold produced1 |
62,468 |
43,488 |
56,213 |
|
1 Contained gold in concentrate and doré. |
|
Manitoba |
Three Months Ended |
|
|
Sep. 30, 2024 |
Jun. 30, 2024 |
Sep. 30, 2023 |
|
Cash cost per ounce of gold produced |
$000s |
|
$/oz |
|
$000s |
|
$/oz |
|
$000s |
|
$/oz |
|
|
Mining |
40,114 |
|
642 |
|
42,280 |
|
973 |
|
41,421 |
|
737 |
|
|
Milling |
16,903 |
|
271 |
|
15,222 |
|
350 |
|
16,923 |
|
301 |
|
|
G&A |
12,398 |
|
198 |
|
10,449 |
|
240 |
|
10,145 |
|
180 |
|
|
Onsite costs |
69,415 |
|
1,111 |
|
67,951 |
|
1,563 |
|
68,489 |
|
1,218 |
|
|
Treatment & refining |
6,529 |
|
104 |
|
7,282 |
|
167 |
|
8,834 |
|
157 |
|
|
Freight & other |
7,283 |
|
117 |
|
5,674 |
|
130 |
|
6,120 |
|
109 |
|
|
Cash cost, before by-product credits |
83,227 |
|
1,332 |
|
80,907 |
|
1,860 |
|
83,443 |
|
1,484 |
|
|
By-product credits |
(59,987) |
|
(960) |
|
(47,386) |
|
(1,090) |
|
(45,779) |
|
(814) |
|
|
Gold cash cost, net of by-product credits |
23,240 |
|
372 |
|
33,521 |
|
771 |
|
37,664 |
|
670 |
|
|
Manitoba |
Three Months Ended |
|
|
Sep. 30, 2024 |
Jun. 30, 2024 |
Sep. 30, 2023 |
|
Supplementary cash cost information |
$000s |
|
$/oz1 |
|
$000s |
|
$/oz1 |
$000s |
|
$/oz1 |
|
|
By-product credits2: |
|
|
|
|
|
|
|
|
|
Copper |
28,152 |
|
451 |
|
25,932 |
|
596 |
24,158 |
|
430 |
|
|
Zinc |
24,326 |
|
389 |
|
14,916 |
|
343 |
17,099 |
|
304 |
|
|
Silver |
7,501 |
|
120 |
|
6,065 |
|
140 |
4,522 |
|
80 |
|
|
Other |
8 |
|
— |
|
473 |
|
11 |
— |
|
— |
|
|
Total by-product credits |
59,987 |
|
960 |
|
47,386 |
|
1,090 |
45,779 |
|
814 |
|
|
Reconciliation to IFRS: |
|
|
|
|
|
|
|
|
|
Cash cost, net of by-product credits |
23,240 |
|
|
33,521 |
|
|
37,664 |
|
|
|
|
By-product credits |
59,987 |
|
|
47,386 |
|
|
45,779 |
|
|
|
|
Treatment and refining charges |
(6,529) |
|
|
(7,282) |
|
|
(8,834) |
|
|
|
|
Inventory adjustments |
1,392 |
|
|
— |
|
|
— |
|
|
|
|
Share-based compensation expenses |
224 |
|
|
414 |
|
|
104 |
|
|
|
|
Past service pension costs |
2,786 |
|
|
— |
|
|
— |
|
|
|
|
Change in product inventory |
1,245 |
|
|
(2,409) |
|
|
(766) |
|
|
|
|
Royalties |
— |
|
|
— |
|
|
1 |
|
|
|
|
Depreciation and amortization3 |
27,662 |
|
|
24,744 |
|
|
26,873 |
|
|
|
|
Cost of sales4 |
110,007 |
|
|
96,374 |
|
|
100,821 |
|
|
|
| 1 Per ounce of
gold produced. |
| 2 By-product
credits are computed as revenue per consolidated interim financial
statements, amortization of deferred revenue and pricing and volume
adjustments. |
| 3 Depreciation is
based on concentrate sold. |
| 4 As per IFRS
consolidated interim financial statements. |
| |
|
Manitoba |
Three Months Ended |
|
|
Sep. 30, 2024 |
Jun. 30, 2024 |
Sep. 30, 2023 |
|
Sustaining cash cost per pound of gold
produced |
$000s |
$/oz |
$000s |
$/oz |
$000s |
$/oz |
|
|
Gold cash cost, net of by-product credits |
23,240 |
372 |
33,521 |
771 |
37,664 |
670 |
|
|
Cash sustaining capital expenditures |
11,289 |
181 |
17,063 |
392 |
15,100 |
269 |
|
|
Royalties |
— |
— |
— |
— |
1 |
— |
|
|
Sustaining cash cost per pound of gold
produced |
34,529 |
553 |
50,584 |
1,163 |
52,765 |
939 |
|
| |
|
|
|
|
|
|
|
Combined Unit Cost Reconciliation
|
Peru |
Three Months Ended |
|
(in thousands except ore tonnes milled and unit cost per
tonne) |
|
Combined unit cost per tonne processed |
Sep. 30, 2024 |
|
Jun. 30, 2024 |
|
Sep. 30, 2023 |
|
|
Mining |
37,647 |
|
31,306 |
|
33,875 |
|
|
Milling |
48,535 |
|
51,335 |
|
46,996 |
|
|
G&A1 |
19,830 |
|
19,349 |
|
20,912 |
|
|
Other G&A2 |
(1,993) |
|
(4,113) |
|
(5,440) |
|
|
Unit cost |
104,019 |
|
97,877 |
|
96,343 |
|
|
Tonnes ore milled |
8,137 |
|
7,719 |
|
7,895 |
|
|
Combined unit cost per tonne |
12.78 |
|
12.68 |
|
12.20 |
|
|
Reconciliation to IFRS: |
|
|
|
|
Unit cost |
104,019 |
|
97,877 |
|
96,343 |
|
|
Freight & other |
14,130 |
|
12,593 |
|
17,040 |
|
|
Inventory adjustments |
206 |
|
— |
|
— |
|
|
Other G&A |
1,993 |
|
4,113 |
|
5,440 |
|
|
Share-based compensation expenses |
98 |
|
199 |
|
45 |
|
|
Change in product inventory |
1,133 |
|
1,101 |
|
4,137 |
|
|
Royalties |
2,117 |
|
929 |
|
1,015 |
|
|
Depreciation and amortization |
57,242 |
|
58,860 |
|
80,625 |
|
|
Cost of sales3 |
180,938 |
|
175,672 |
|
204,645 |
|
| 1 G&A as per
cash cost reconciliation above. |
| 2 Other G&A
primarily includes profit sharing costs. |
|
3 As per IFRS consolidated interim financial statements. |
| |
|
Manitoba |
Three Months Ended |
|
(in thousands except tonnes ore milled and unit cost per
tonne) |
|
Combined unit cost per tonne processed |
Sep. 30, 2024 |
|
Jun. 30, 2024 |
|
Sep. 30, 2023 |
|
|
Mining |
40,114 |
|
42,280 |
|
41,421 |
|
|
Milling |
16,903 |
|
15,222 |
|
16,923 |
|
|
G&A1 |
12,398 |
|
10,449 |
|
10,145 |
|
|
Less: Other G&A related to profit sharing costs |
(5,385) |
|
(3,428) |
|
(3,308) |
|
|
Unit cost |
64,030 |
|
64,523 |
|
65,181 |
|
|
USD/CAD implicit exchange rate |
1.36 |
|
1.38 |
|
1.34 |
|
|
Unit cost - C$ |
87,391 |
|
89,336 |
|
87,363 |
|
|
Tonnes ore milled |
413,919 |
|
397,426 |
|
402,443 |
|
|
Combined unit cost per tonne - C$ |
211 |
|
225 |
|
217 |
|
|
Reconciliation to IFRS: |
|
|
|
|
Unit cost |
64,030 |
|
64,523 |
|
65,181 |
|
|
Freight & other |
7,283 |
|
5,674 |
|
6,120 |
|
|
Other G&A related to profit sharing |
5,385 |
|
3,428 |
|
3,308 |
|
|
Share-based compensation expenses |
224 |
|
414 |
|
104 |
|
|
Inventory adjustments |
1,392 |
|
— |
|
— |
|
|
Past service pension costs |
2,786 |
|
— |
|
— |
|
|
Change in product inventory |
1,245 |
|
(2,409) |
|
(766) |
|
|
Royalties |
— |
|
— |
|
1 |
|
|
Depreciation and amortization |
27,662 |
|
24,744 |
|
26,873 |
|
|
Cost of sales2 |
110,007 |
|
96,374 |
|
100,821 |
|
|
1 G&A as per cash cost reconciliation above. |
|
2 As per IFRS consolidated interim financial statements. |
|
|
|
British Columbia |
Three Months Ended |
|
(in thousands except unit cost per tonne) |
|
Combined unit cost per tonne processed |
Sep. 30, 2024 |
|
Jun. 30, 2024 |
Sep. 30, 2023 |
|
|
Mining |
12,918 |
|
19,463 |
29,251 |
|
|
Milling |
19,707 |
|
21,508 |
24,102 |
|
|
G&A1 |
5,788 |
|
5,442 |
5,050 |
|
|
Unit cost |
38,413 |
|
46,413 |
58,403 |
|
|
USD/CAD implicit exchange rate |
1.35 |
|
1.36 |
1.35 |
|
|
Unit cost - C$ |
52,388 |
|
63,522 |
78,566 |
|
|
Tonnes ore milled |
3,363 |
|
3,232 |
3,158 |
|
|
Combined unit cost per tonne |
15.58 |
|
19.65 |
24.88 |
|
|
Reconciliation to IFRS: |
|
|
|
|
|
Unit cost |
38,413 |
|
46,413 |
58,403 |
|
|
Freight & other |
3,002 |
|
3,461 |
3,693 |
|
|
Change in product inventory |
(550) |
|
11,290 |
3 |
|
|
Royalties |
1,629 |
|
641 |
237 |
|
|
Depreciation and amortization |
12,548 |
|
14,042 |
6,255 |
|
|
Cost of sales2 |
55,042 |
|
75,847 |
68,591 |
|
| 1 G&A as per
cash cost reconciliation above |
| 2 As per
consolidated interim financial statements. |
| |
Forward-Looking Information
This news release contains forward-looking
information within the meaning of applicable Canadian and United
States securities legislation. All information contained in this
news release, other than statements of current and historical fact,
is forward-looking information. Often, but not always,
forward-looking information can be identified by the use of words
such as “plans”, “expects”, “budget”, “guidance”, “scheduled”,
“estimates”, “forecasts”, “strategy”, “target”, “intends”,
“objective”, “goal”, “understands”, “anticipates” and “believes”
(and variations of these or similar words) and statements that
certain actions, events or results “may”, “could”, “would”,
“should”, “might” “occur” or “be achieved” or “will be taken” (and
variations of these or similar expressions). All of the
forward-looking information in this news release is qualified by
this cautionary note.
Forward-looking information includes, but is not
limited to, statements with respect to the company’s production,
cost and capital and exploration expenditure guidance, the ability
of the company to optimize the Copper Mountain mine operation, the
implementation of stripping strategies and the expected benefits
therefrom, the estimated timelines and pre-requisites for
sanctioning the Copper World project and the pursuit of a potential
minority joint venture partner, expectations regarding the
permitting requirements for the Copper World project (including
expected timing for receipt of the Air Quality Permit), the
expected benefits of the sanctioning of the Copper World project,
the expected benefits of Manitoba growth initiatives, including the
exploration drift at the 1901 deposit, the company’s future
deleveraging strategies and the company’s ability to deleverage and
repay debt as needed, expectations regarding the company’s cash
balance and liquidity, expectations regarding the ability to
conduct exploration work and execute on exploration programs on its
properties and to advance related drill plans, including the
advancement of the exploration program at Maria Reyna and Caballito
and the status of the related drill permit application process,
expectations regarding the prospective nature of the Maria Reyna
and Caballito properties, the ability to continue mining
higher-grade ore in the Pampacancha pit and the company’s
expectations resulting therefrom, expectations regarding the
ability for the company to further reduce greenhouse gas emissions,
the company’s evaluation and assessment of opportunities to
reprocess tailings using various metallurgical technologies, the
anticipated impact of brownfield and greenfield growth projects on
the company’s performance, anticipated expansion opportunities and
extension of mine life in Snow Lake and the ability for Hudbay to
find a new anchor deposit near the company’s Snow Lake operations,
anticipated future drill programs and exploration activities and
any results expected therefrom, anticipated mine plans, anticipated
metals prices and the anticipated sensitivity of the company’s
financial performance to metals prices, events that may affect its
operations and development projects, anticipated cash flows from
operations and related liquidity requirements, the anticipated
effect of external factors on revenue, such as commodity prices,
estimation of mineral reserves and resources, mine life
projections, reclamation costs, economic outlook, government
regulation of mining operations, and business and acquisition
strategies. Forward-looking information is not, and cannot be, a
guarantee of future results or events. Forward-looking information
is based on, among other things, opinions, assumptions, estimates
and analyses that, while considered reasonable by the company at
the date the forward-looking information is provided, inherently
are subject to significant risks, uncertainties, contingencies and
other factors that may cause actual results and events to be
materially different from those expressed or implied by the
forward-looking information.
The material factors or assumptions that Hudbay
has identified and were applied in drawing conclusions or making
forecasts or projections set out in the forward-looking information
include, but are not limited to:
- the ability to achieve production, cost and capital and
exploration expenditure guidance;
- no significant interruptions to operations due to social or
political unrest in the regions Hudbay operates, including the
navigation of the complex political and social environment in
Peru;
- no interruptions to the company’s plans for advancing the
Copper World project, including with respect to timely receipt of
the Air Quality Permit and the pursuit of a potential joint venture
partner;
- the ability for the company to successfully complete the
optimization of the Copper Mountain operations, obtain required
permits and develop and maintain good relations with key
stakeholders;
- the ability to execute on its exploration plans and to advance
related drill plans;
- the ability to advance the exploration program at Maria Reyna
and Caballito;
- the success of mining, processing, exploration and development
activities;
- the scheduled maintenance and availability of the company’s
processing facilities;
- the accuracy of geological, mining and metallurgical
estimates;
- anticipated metals prices and the costs of production;
- the supply and demand for metals the company produces;
- the supply and availability of all forms of energy and fuels at
reasonable prices;
- no significant unanticipated operational or technical
difficulties;
- no significant interruptions to operations due to adverse
effects from extreme weather events, including but not limited to
forest fires that may affect the regions in which the company
operates;
- the execution of the company’s business and growth strategies,
including the success of its strategic investments and
initiatives;
- the availability of additional financing, if needed;
- the company’s ability to deleverage and repay debt, as
needed;
- the ability to complete project targets on time and on budget
and other events that may affect the company’s ability to develop
its projects;
- the timing and receipt of various regulatory and governmental
approvals;
- the availability of personnel for the company’s exploration,
development and operational projects and ongoing employee
relations;
- maintaining good relations with the employees at the company’s
operations;
- maintaining good relations with the labour unions that
represent certain of the company’s employees in Manitoba and
Peru;
- maintaining good relations with the communities in which the
company operates, including the neighbouring Indigenous communities
and local governments;
- no significant unanticipated challenges with stakeholders at
the company’s various projects;
- no significant unanticipated events or changes relating to
regulatory, environmental, health and safety matters;
- no contests over title to the company’s properties, including
as a result of rights or claimed rights of Indigenous peoples or
challenges to the validity of the company’s unpatented mining
claims;
- the timing and possible outcome of pending litigation and no
significant unanticipated litigation;
- certain tax matters, including, but not limited to current tax
laws and regulations, changes in taxation policies and the refund
of certain value added taxes from the Canadian and Peruvian
governments; and
- no significant and continuing adverse changes in general
economic conditions or conditions in the financial markets
(including commodity prices and foreign exchange rates).
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 related to the failure
to effectively complete the optimization and expansion of the
Copper Mountain mine operations, political and social risks in the
regions Hudbay operates, including the navigation of the complex
political and social environment in Peru, risks generally
associated with the mining industry and the current geopolitical
environment, including future commodity prices, potential tariffs,
currency and interest rate fluctuations, energy and consumable
prices, supply chain constraints and general cost escalation in the
current inflationary environment, uncertainties related to the
development and operation of the company’s projects, the risk of an
indicator of impairment or impairment reversal relating to a
material mineral property, risks related to the Copper World
project, including in relation to permitting, project delivery and
financing risks, risks related to the Lalor mine plan, including
the ability to convert inferred mineral resource estimates to
higher confidence categories, dependence on key personnel and
employee and union relations, risks related to political or social
instability, unrest or change, risks in respect of Indigenous and
community relations, rights and title claims, risks related to
extreme weather events, including forest fires that may affect the
regions in which the company operates and other severe storms,
operational risks and hazards, including the cost of maintaining
and upgrading the company's tailings management facilities and any
unanticipated environmental, industrial and geological events and
developments and the inability to insure against all risks, failure
of plant, equipment, processes, transportation and other
infrastructure to operate as anticipated, compliance with
government and environmental regulations, including permitting
requirements and anti-bribery legislation, depletion of the
company’s reserves, volatile financial markets and interest rates
that may affect the company’s ability to obtain additional
financing on acceptable terms, the failure to obtain required
approvals or clearances from government authorities on a timely
basis, uncertainties related to the geology, continuity, grade and
estimates of mineral reserves and resources, and the potential for
variations in grade and recovery rates, uncertain costs of
reclamation activities, the company’s ability to comply with its
pension and other post-retirement obligations, the company’s
ability to abide by the covenants in its debt instruments and other
material contracts, tax refunds, hedging transactions, as well as
the risks discussed under the heading “Risk Factors” in the
company’s most recent Annual Information Form, which is available
on the company’s SEDAR+ profile at www.sedarplus.ca and the
company’s EDGAR profile at www.sec.gov.
Should one or more risk, uncertainty,
contingency or other factor materialize or should any factor or
assumption prove incorrect, actual results could vary materially
from those expressed or implied in the forward-looking information.
Accordingly, you should not place undue reliance on forward-looking
information. Hudbay does not assume any obligation to update or
revise any forward-looking information after the date of this news
release or to explain any material difference between subsequent
actual events and any forward-looking information, except as
required by applicable law.
Note to United States
Investors
This news release has been prepared in
accordance with the requirements of the securities laws in effect
in Canada, which may differ materially from the requirements of
United States securities laws applicable to U.S. issuers.
About Hudbay
Hudbay (TSX, NYSE: HBM) is a copper-focused
mining company with three long-life operations and a world-class
pipeline of copper growth projects in tier-one mining-friendly
jurisdictions of Canada, Peru and the United States.
Hudbay’s operating portfolio includes the
Constancia mine in Cusco (Peru), the Snow Lake operations in
Manitoba (Canada) and the Copper Mountain mine in British Columbia
(Canada). Copper is the primary metal produced by the company,
which is complemented by meaningful gold production. Hudbay’s
growth pipeline includes the Copper World project in Arizona
(United States), the Mason project in Nevada (United States), the
Llaguen project in La Libertad (Peru) and several expansion and
exploration opportunities near its existing operations.
The value Hudbay creates and the impact it has
is embodied in its purpose statement: “We care about our people,
our communities and our planet. Hudbay provides the metals the
world needs. We work sustainably, transform lives and create better
futures for communities.” Hudbay’s mission is to create sustainable
value and strong returns by leveraging its core strengths in
community relations, focused exploration, mine development and
efficient operations.
For further information, please contact:
Candace BrûléVice President, Investor Relations
(416) 814-4387investor.relations@hudbay.com
_____________________i Adjusted net earnings
(loss) attributable to owners and adjusted net earnings (loss) per
share attributable to owners; adjusted EBITDA; cash cost,
sustaining cash cost and all-in sustaining cash cost per pound of
copper produced, net of by-product credits; cash cost and
sustaining cash cost per ounce of gold produced, net of by-product
credits; combined unit costs, net debt and any ratios based on
these measures are non-IFRS financial performance measures with no
standardized definition under IFRS. For further information and a
detailed reconciliation, please see the “Non-IFRS Financial
Performance Measures” section of this news release.
HudBay Minerals (NYSE:HBM)
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