Hudbay Minerals Inc. (“Hudbay” or the “company”) (TSX,
NYSE:HBM) today released its fourth quarter and full year
2019 financial results and annual production and cost guidance. All
amounts are in U.S. dollars, unless otherwise noted.
“We delivered solid operating results in the
fourth quarter as a result of our focus on maintaining steady mine
performance while continuing to implement various process
improvement initiatives across the business,” said Peter Kukielski,
President and Chief Executive Officer. “We are on-track to deliver
our next phase of growth, including mining the high-grade
Pampacancha satellite deposit in Peru in 2020 and completing the
refurbishment of the New Britannia gold mill in Manitoba by 2022.
Both projects are low capital intensity, high return brownfield
projects with short paybacks on our invested capital. We are proud
of our ESG and operating achievements in 2019, as well as our
successful track record of achieving annual copper production
guidance for the past five years. We look forward to delivering
significant near-term copper and gold production growth as we
execute on our strategic plan.”
Summary of Fourth Quarter
Results
Consolidated copper production in the fourth
quarter of 2019 was 32,422 tonnes, a decrease from the third
quarter of 2019 primarily as a result of lower planned production
in Peru due to the regularly scheduled mill maintenance shut-down
and normal quarter-to-quarter variance in copper grades.
Consolidated zinc production was higher in the fourth quarter
compared to the third quarter of 2019 due to higher zinc grades in
Manitoba. Copper sales volumes increased in the fourth quarter as
copper concentrate inventory levels in Peru returned to normal
levels, while zinc sales volumes were lower as a result of the
one-week Canadian National Railway strike during the quarter.
In the fourth quarter of 2019, consolidated cash
cost per pound of copper produced, net of by-product creditsii, was
$1.23, an increase compared to $0.98 in the third quarter due to
lower copper production and lower zinc by-product revenue,
partially offset by higher precious metals by-product revenue.
Incorporating cash sustaining capital, capitalized exploration,
royalties, selling, administrative and regional costs, consolidated
all-in sustaining cash cost per pound of copper produced, net of
by-product creditsii, in the fourth quarter of 2019 was $2.55,
which increased from $1.98 in the third quarter, driven mainly by
increased sustaining capital expenditures and the same factors
noted above affecting consolidated cash costs.
Net loss and loss per share in the fourth
quarter of 2019 were $1.5 million and $0.01, respectively. Net loss
and loss per share in the fourth quarter of 2019 were affected by,
among other things, the following items:
|
Pre-tax gain (loss) |
After-tax gain (loss) |
Per share gain (loss) |
|
($ millions) |
($ millions) |
($/share) |
Mark-to-market adjustments |
(9.0) |
(6.6) |
(0.03) |
Non-cash deferred tax adjustments |
- |
30.4 |
0.12 |
Cash generated from operating activities
increased to $98.7 million in the fourth quarter of 2019 from $43.5
million in the third quarter of 2019. Operating cash flow before
change in non-cash working capital was $69.1 million during the
fourth quarter of 2019, relatively unchanged from the third
quarter. The increase in cash generated from operating activities
is primarily the result of the reduction of excess inventories and
other working capital changes during the quarter.
Consolidated Financial Performance |
Three Months Ended |
($000s except per share amounts) |
Dec. 31, 2019 |
Sep. 30, 2019 |
Dec. 31, 2018 |
Revenue |
324,485 |
291,282 |
351,773 |
Cost of sales |
298,852 |
260,327 |
276,547 |
Earnings (loss) before tax |
(42,352) |
(348,367) |
17,650 |
Earnings (loss) |
(1,455) |
(274,796) |
(3,510) |
Basic and diluted earnings (loss) per share |
(0.01) |
(1.05) |
(0.01) |
Operating cash flow before change in non-cash working capital |
69,141 |
71,204 |
104,264 |
Consolidated Operational Performance |
|
Three Months Ended |
|
|
Dec. 31, 2019 |
Sep. 30, 2019 |
Dec. 31, 2018 |
Contained metal in concentrate produced1 |
|
|
|
|
Copper |
tonnes |
32,422 |
36,422 |
37,238 |
Gold |
ounces |
32,712 |
28,319 |
28,051 |
Silver |
ounces |
930,137 |
924,191 |
1,014,684 |
Zinc |
tonnes |
30,592 |
28,639 |
27,408 |
Molybdenum |
tonnes |
372 |
262 |
329 |
Precious metals2 |
ounces |
46,000 |
41,522 |
42,546 |
Payable metal in concentrate sold |
|
|
|
|
Copper |
tonnes |
33,715 |
29,916 |
36,350 |
Gold |
ounces |
30,344 |
25,488 |
25,861 |
Silver |
ounces |
909,423 |
756,296 |
909,500 |
Zinc3 |
tonnes |
28,001 |
29,140 |
31,134 |
Molybdenum |
tonnes |
199 |
334 |
447 |
Precious metals2 |
ounces |
43,336 |
36,292 |
38,854 |
Cash cost4 |
$/lb |
1.23 |
0.98 |
0.94 |
All-in sustaining cash cost4 |
$/lb |
2.55 |
1.98 |
1.80 |
1 Metal reported in concentrate is prior to deductions
associated with smelter contract terms.2 Precious metals production
includes gold and silver production on a gold-equivalent basis.
Silver is converted to gold at a ratio of 70:1.3 Includes refined
zinc metal sold and payable zinc in concentrate sold.4 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 Reporting Measures”
section of this news release.
Summary of Full Year
Results
On a consolidated basis, Hudbay’s copper and
precious metals production met 2019 guidance and production of zinc
and molybdenum exceeded 2019 guidance ranges. Production of copper
benefited from increased throughput and recoveries at Constancia
despite expected lower planned grades. Strong zinc production was a
result of Lalor achieving its ramp up to 4,500 tonnes per day and
the 777 mine implementing operational improvements. Combined unit
costs in both Peru and Manitoba were within 2019 guidance ranges.
Total capital expenditures were above 2019 guidance due primarily
to increased sustaining capital expenditures related to mining
equipment that is now accounted for as a capitalized lease under
IFRS.
Consolidated cash cost per pound of copper
produced, net of by-product credits, was $1.14 in 2019, an increase
compared to $0.94 in 2018 primarily due to lower copper production
from planned lower grades at Constancia and the closure of the Reed
mine in Manitoba in August 2018. Incorporating cash sustaining
capital, capitalized exploration, royalties, selling,
administrative and regional costs, consolidated all-in sustaining
cash cost per pound of copper produced, net of by-product credits,
in 2019 was $2.17, which increased from $1.60 in 2018, driven
mainly by increased sustaining capital expenditures and the same
factors noted above affecting consolidated cash costs.
Cash generated from operating activities
decreased to $310.9 million in 2019 from $479.6 million in 2018.
Operating cash flow before change in non-cash working capital
decreased to $307.3 million from $501.4 million in 2018. The
decrease is the result of lower copper sales volumes and lower
margins mainly from lower realized base metal prices.
Cash and cash equivalents decreased by $119.4
million year-over-year to $396.1 million as at December 31, 2019.
This decrease was mainly a result of $259.2 million of funding for
capital investments, interest payments and financing activities of
$137.8 million and the acquisition of the remaining interest in the
Rosemont project for $45.0 million. This decrease was partially
offset by cash flow from operating activities of $310.9
million.
Consolidated Financial Performance |
Year Ended |
($000s except per share amounts) |
Dec. 31, 2019 |
Dec. 31, 2018 |
Revenue |
1,237,439 |
1,472,366 |
Cost of sales |
1,085,897 |
1,098,626 |
Profit (loss) before tax |
(452,763) |
170,837 |
Profit (loss) |
(343,810) |
85,416 |
Basic and diluted earnings (loss) per share |
(1.32) |
0.33 |
Operating cash flow before change in non-cash working capital |
307,284 |
501,352 |
Consolidated Operational Performance |
|
Year Ended |
|
|
Dec. 31, 2019 |
Dec. 31, 2018 |
Contained metal in concentrate produced1 |
|
|
|
Copper |
tonnes |
137,179 |
154,550 |
Gold |
ounces |
114,692 |
119,882 |
Silver |
ounces |
3,585,330 |
3,954,469 |
Zinc |
tonnes |
119,106 |
115,588 |
Molybdenum |
tonnes |
1,272 |
904 |
Precious metals2 |
ounces |
165,911 |
176,374 |
Payable metal in concentrate sold |
|
|
|
Copper |
tonnes |
128,519 |
147,923 |
Gold |
ounces |
108,999 |
113,097 |
Silver |
ounces |
3,452,926 |
3,372,353 |
Zinc3 |
tonnes |
104,319 |
115,723 |
Molybdenum |
tonnes |
1,186 |
819 |
Precious metals2 |
ounces |
158,327 |
161,273 |
Cash cost4 |
$/lb |
1.14 |
0.94 |
All-in sustaining cash cost4 |
$/lb |
2.17 |
1.60 |
1 Metal reported in concentrate is prior to deductions
associated with smelter contract terms.2 Precious metals production
includes gold and silver production on a gold-equivalent basis.
Silver is converted to gold at a ratio of 70:1.3 Includes refined
zinc metal sold and payable zinc in concentrate sold.4 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 Reporting Measures”
section of this news release.
Peru Operations Review
Peru Operations |
Three Months Ended |
Year Ended |
|
|
Dec. 31, 2019 |
Sep. 30, 2019 |
Dec. 31, 2018 |
Dec. 31, 2019 |
Dec. 31, 2018 |
Ore mined1 |
tonnes |
8,049,063 |
8,413,367 |
7,329,423 |
33,308,369 |
34,372,156 |
Copper |
% |
0.41 |
0.44 |
0.47 |
0.43 |
0.49 |
Gold |
g/tonne |
0.04 |
0.05 |
0.05 |
0.04 |
0.05 |
Silver |
g/tonne |
3.87 |
3.93 |
4.16 |
3.76 |
4.15 |
Ore milled |
tonnes |
7,474,136 |
8,240,344 |
7,657,943 |
31,387,281 |
31,282,610 |
Copper |
% |
0.42 |
0.44 |
0.48 |
0.42 |
0.47 |
Gold |
g/tonne |
0.04 |
0.04 |
0.06 |
0.04 |
0.05 |
Silver |
g/tonne |
3.86 |
3.76 |
4.26 |
3.64 |
4.08 |
Copper recovery |
% |
85.6 |
86.0 |
84.8 |
85.7 |
82.6 |
Gold recovery |
% |
50.0 |
48.3 |
48.5 |
48.1 |
47.4 |
Silver recovery |
% |
68.2 |
68.9 |
71.6 |
68.2 |
66.5 |
Contained metal in concentrate |
|
|
|
|
|
Copper |
tonnes |
26,659 |
31,091 |
30,834 |
113,825 |
122,178 |
Gold |
ounces |
5,007 |
5,565 |
7,522 |
19,723 |
24,189 |
Silver |
ounces |
631,774 |
686,258 |
750,747 |
2,504,769 |
2,729,859 |
Molybdenum |
tonnes |
372 |
262 |
329 |
1,272 |
904 |
Precious metals2 |
ounces |
14,033 |
15,369 |
18,247 |
55,506 |
63,187 |
Payable
metal sold |
|
|
|
|
|
Copper |
tonnes |
28,430 |
25,314 |
31,252 |
106,184 |
116,449 |
Gold |
ounces |
4,824 |
3,858 |
7,262 |
18,956 |
20,420 |
Silver |
ounces |
666,839 |
529,139 |
672,756 |
2,452,496 |
2,255,700 |
Molybdenum |
tonnes |
199 |
334 |
447 |
1,186 |
819 |
Combined unit operating cost3,4 |
$/tonne |
10.20 |
8.63 |
9.88 |
9.50 |
9.44 |
Cash cost4 |
$/lb |
1.66 |
1.26 |
1.31 |
1.41 |
1.36 |
Sustaining cash cost4 |
$/lb |
2.47 |
1.75 |
1.66 |
1.90 |
1.59 |
1 Reported tonnes and grade for ore mined are estimates based on
mine plan assumptions and may not reconcile fully to ore milled.2
Precious metals production includes gold and silver production on a
gold-equivalent basis. Silver converted to gold at a ratio of
70:1.3 Reflects combined mine, mill and general and administrative
(“G&A”) costs per tonne of ore milled. Reflects the deduction
of expected capitalized stripping costs.4 Combined unit cost, cash
cost and sustaining cash cost are non-IFRS financial performance
measures with no standardized definition under IFRS. For further
information, please see the “Non-IFRS Financial Reporting Measures”
section of this news release.
Constancia achieved record mill throughput and
record copper recoveries in 2019 as a result of several
metallurgical initiatives, and full year copper recoveries exceeded
the levels anticipated in the National Instrument (“NI”) 43-101
technical report issued in March 2018.
During the quarter, the Constancia mine produced
26,659 tonnes of copper, 14,033 ounces of precious metals and 372
tonnes of molybdenum. Production results were lower than the third
quarter of 2019 primarily as a result of lower throughput as the
mine reached full-year mill throughput limits imposed by its
operating permits. Year-over-year copper production decreased as
copper grades declined in line with the mine plan, partially offset
by higher throughput and copper recoveries. Full year production of
copper was within 2019 guidance ranges, while precious metals and
molybdenum production exceeded the guidance ranges.
Mill throughput in the fourth quarter of 2019
was lower compared to the third quarter of 2019, which was a record
throughput quarter. Mill throughput was lower in the fourth quarter
primarily due to the scheduled semi-annual maintenance shutdown as
well as a requirement to comply with full year permit limitations
on throughput. Milled copper grades in the fourth quarter were
slightly lower than the third quarter, in line with the mine
plan.
Copper recoveries in the fourth quarter of 2019
were consistent with the third quarter levels as a result of the
sustained metallurgical improvements implemented throughout the
year. While recoveries vary from quarter to quarter depending on
the complexity and grade of the ore feed, the company is seeing
results from ongoing recovery optimization initiatives. These
results are demonstrated through the year-over-year increase in
copper recoveries to 85.7% in 2019 from 82.6% in 2018. Highlights
of the initiatives include the continued integration of an
automated, advanced process control system and the installation of
enhanced classification and flotation equipment in the grinding and
bulk flotation circuits.
Combined mine, mill and G&A unit operating
costs in the fourth quarter were higher than the third quarter of
2019, reflecting correspondingly lower ore throughput and higher
maintenance costs due to the planned plant shutdown. Full year 2019
combined unit costs for Constancia were similar to 2018 levels and
were in line with 2019 guidance expectations.
Peru cash cost per pound of copper produced, net
of by-product credits, in the fourth quarter of 2019 was $1.66, 32%
higher than in the third quarter due to lower copper production, in
line with the mine plan, higher operating costs and lower
by-product credits. Peru sustaining cash cost per pound of copper
produced, net of by-product creditsii, was $2.47 in the fourth
quarter of 2019. This represents a 41% increase from the third
quarter due to the same factors that affected cash costs as well as
higher sustaining costs in heavy civil works and capitalized
stripping costs, and timing of payments on long-term community
agreements and leases.
Peru cash cost per pound of copper produced, net
of by-product credits, for the full year 2019 was $1.41, 4% higher
than the full year 2018 primarily due to lower copper production,
in line with the mine plan, offset by higher by-product credits.
Peru sustaining cash cost per pound of copper produced, net of
by-product credits, was $1.90 for the full year 2019. This
represents a 19% increase from 2018 due to the same factors that
affected sustaining cash costs in the fourth quarter.
Manitoba Operations Review
Manitoba Operations |
Three Months Ended |
Year Ended |
|
|
Dec. 31, 2019 |
Sep. 30, 2019 |
Dec. 31, 2018 |
Dec. 31, 2019 |
Dec. 31, 2018 |
777 ore mined |
tonnes |
269,342 |
273,319 |
244,613 |
1,109,782 |
966,567 |
Copper |
% |
1.17 |
1.33 |
1.76 |
1.37 |
1.47 |
Zinc |
% |
3.33 |
3.01 |
3.46 |
3.22 |
4.43 |
Gold |
g/tonne |
1.52 |
1.63 |
1.61 |
1.61 |
1.83 |
Silver |
g/tonne |
18.52 |
15.42 |
24.37 |
18.67 |
28.34 |
Lalor ore mined |
tonnes |
390,140 |
346,456 |
317,616 |
1,536,780 |
1,260,241 |
Copper |
% |
0.80 |
0.68 |
0.82 |
0.75 |
0.74 |
Zinc |
% |
6.20 |
6.16 |
6.80 |
6.36 |
6.25 |
Gold |
g/tonne |
2.63 |
2.21 |
2.09 |
2.16 |
2.19 |
Silver |
g/tonne |
28.38 |
25.56 |
24.66 |
25.51 |
25.39 |
Flin Flon Concentrator: |
|
|
|
|
|
Ore milled |
tonnes |
374,529 |
331,216 |
259,569 |
1,362,006 |
1,423,744 |
Copper |
% |
1.11 |
1.22 |
1.73 |
1.27 |
1.90 |
Zinc |
% |
4.05 |
3.64 |
3.55 |
3.78 |
3.71 |
Gold |
g/tonne |
1.75 |
1.74 |
1.62 |
1.72 |
1.63 |
Silver |
g/tonne |
20.56 |
17.36 |
24.79 |
19.84 |
23.48 |
Copper recovery |
% |
86.9 |
89.1 |
90.4 |
88.0 |
92.3 |
Zinc recovery |
% |
85.8 |
86.7 |
83.7 |
85.5 |
84.2 |
Gold recovery |
% |
56.1 |
59.1 |
62.8 |
59.4 |
64.5 |
Silver recovery |
% |
49.2 |
48.7 |
54.8 |
50.8 |
60.2 |
Stall Concentrator: |
|
|
|
|
|
Ore milled |
tonnes |
310,622 |
318,539 |
313,995 |
1,290,300 |
1,201,466 |
Copper |
% |
0.80 |
0.64 |
0.84 |
0.73 |
0.72 |
Zinc |
% |
6.24 |
6.22 |
6.83 |
6.39 |
6.38 |
Gold |
g/tonne |
2.60 |
2.12 |
2.09 |
2.13 |
2.15 |
Silver |
g/tonne |
28.12 |
25.16 |
24.58 |
25.48 |
25.27 |
Copper recovery |
% |
85.9 |
84.4 |
88.6 |
85.9 |
85.7 |
Zinc recovery |
% |
90.7 |
91.8 |
91.9 |
91.1 |
92.8 |
Gold recovery |
% |
61.1 |
54.3 |
57.1 |
56.8 |
57.6 |
Silver recovery |
% |
62.9 |
57.4 |
60.7 |
60.4 |
59.2 |
Total contained metal in concentrate |
|
|
|
Copper |
tonnes |
5,763 |
5,331 |
6,404 |
23,354 |
32,372 |
Zinc |
tonnes |
30,592 |
28,639 |
27,408 |
119,106 |
115,588 |
Gold |
ounces |
27,705 |
22,754 |
20,529 |
94,969 |
95,693 |
Silver |
ounces |
298,363 |
237,933 |
263,937 |
1,080,561 |
1,224,610 |
Precious metals1 |
ounces |
31,967 |
26,153 |
24,300 |
110,406 |
113,188 |
Total
payable metal sold |
|
|
|
|
|
Copper |
tonnes |
5,285 |
4,602 |
5,098 |
22,335 |
31,474 |
Zinc2 |
tonnes |
28,001 |
29,140 |
31,134 |
104,346 |
115,723 |
Gold |
ounces |
25,520 |
21,630 |
18,599 |
90,043 |
92,677 |
Silver |
ounces |
242,584 |
227,157 |
236,744 |
1,000,430 |
1,116,653 |
Combined unit operating cost3,4 |
C$/tonne |
128 |
130 |
143 |
134 |
130 |
Cash cost4 |
$/lb |
(0.76) |
(0.68) |
(0.87) |
(0.18) |
(0.64) |
Sustaining cash cost4 |
$/lb |
2.33 |
2.77 |
1.76 |
2.63 |
1.18 |
1 Precious metals production includes gold and silver production
on a gold-equivalent basis. Silver converted to gold at a ratio of
70:1.2 Includes refined zinc metal sold and payable zinc in
concentrate sold.3 Reflects combined mine, mill and G&A costs
per tonne of ore milled. 2018 numbers include the cost of ore
purchased from the joint venture partner at the Reed mine.4
Combined unit cost, cash cost and sustaining cash cost are non-IFRS
financial performance measures with no standardized definition
under IFRS. For further information, please see the “Non-IFRS
Financial Reporting Measures” section of this news release.
The Manitoba operations benefitted from strong
performance from both the 777 and Lalor mines in 2019. Lalor
successfully achieved the ramp up to 4,500 tonnes per day in early
2019 and 777 successfully implemented efficiency initiatives
focused on maximizing the output from the mine.
During the quarter, the Manitoba operations
produced 30,592 tonnes of zinc, 5,763 tonnes of copper and 31,967
ounces of precious metals. Production results were higher than the
third quarter of 2019 primarily due to higher tonnes and grades at
Lalor. Year-over-year copper production decreased due to the
closure of the Reed mine in August 2018, while zinc production
increased due to the Lalor mine’s ramp up. Full year production of
zinc exceeded 2019 guidance ranges, while copper and precious
metals production were within 2019 guidance ranges.
Ore mined at the Manitoba operations during the
fourth quarter of 2019 increased by 6% compared to the third
quarter of 2019 due to higher production volumes at Lalor. Overall
zinc, gold and silver grades were higher compared to the third
quarter of 2019, while copper grades were lower, due to planned
stope sequencing based on life of mine production schedules at 777
and Lalor. Higher gold grades at Lalor were due to mining of gold
enriched base metal stopes in the fourth quarter of 2019.
Ore mined at the Manitoba operations for the
full year 2019 increased by 4% over 2018 levels due to higher
production volumes at both 777 and Lalor, partially offset by the
closure of the Reed mine. The 15% year-over-year increase in ore
mined at 777 is attributable to implementation of management
systems designed to improve mobile equipment availability and key
performance indicators for drilling, blasting and backfilling
processes. The 22% year-over-year increase in ore mined at Lalor is
attributable to a number of initiatives implemented as part of the
production ramp up to 4,500 tonnes per day, including mine design
changes, contract strategies, asset integrity and work management
programs.
Ore processed in Flin Flon in the fourth quarter
of 2019 was 13% higher than the third quarter of 2019 as a result
of increased ore feed trucked from Lalor. Ore processed at the
Stall concentrator was marginally lower than the third quarter of
2019. Ore processed in Flin Flon for the full year 2019 was 4%
lower than in 2018 due to the Reed mine closure, partially offset
by increased production from the 777 mine. Ore processed at the
Stall concentrator was 7% higher in 2019 versus 2018 due to ongoing
operational and maintenance improvements. Full year operating costs
at the Flin Flon and Stall concentrators were 9% and 1% lower,
respectively, in 2019 compared to 2018 primarily due to higher
plant efficiencies.
Manitoba combined mine, mill and G&A unit
operating costs in the fourth quarter of 2019 were 2% lower than in
the third quarter of 2019 mainly due to unit costs trending lower
following Lalor’s ramp up, with third and fourth quarter unit costs
well below the levels reported in the first half of 2019. Manitoba
combined unit costs for the full year 2019 were in line with the
annual guidance range.
Manitoba cash cost per pound of copper produced,
net of by-product credits, in the fourth quarter of 2019 was
negative $0.76. These costs were lower compared to the third
quarter of 2019, primarily as a result of higher copper production
and higher by-product revenue. Manitoba sustaining cash cost per
pound of copper produced, net of by-product credits, in the fourth
quarter of 2019 was $2.33, which was 14% lower than the third
quarter due to lower capitalized exploration partially offset by
increased capital development expenditures at Lalor, in addition to
the same factors that affected cash costs.
Manitoba cash cost per pound of copper produced,
net of by-product credits, for the full year 2019 was negative
$0.18. These costs were higher compared to the full year 2018,
primarily as a result of higher mining costs and lower copper
production. Manitoba sustaining cash cost per pound of copper
produced, net of by-product credits, for the full year 2019 was
$2.63, which was higher compared to the full year 2018 due to
higher sustaining capital expenditures, in addition to the same
factors that affected cash costs.
Annual Guidance
Hudbay’s annual production and operating cost
guidance, along with its annual capital and exploration expenditure
forecasts and three-year production outlook are discussed in detail
below.
Production Guidance
Contained Metal in Concentrate1 |
2020 Guidance |
Year Ended Dec. 31, 2019 |
2019 Guidance |
|
Manitoba |
|
|
|
|
|
Copper |
tonnes |
18,000 –
22,000 |
23,354 |
22,000 – 25,000 |
|
Zinc |
tonnes |
105,000 –
125,000 |
119,106 |
100,000 – 115,000 |
|
Precious metals2 |
oz |
110,000 –
135,000 |
110,406 |
105,000 – 125,000 |
|
|
|
|
|
|
|
Peru |
|
|
|
|
Copper |
tonnes |
80,000 –
95,000 |
113,825 |
100,000 – 125,000 |
|
Precious metals2 |
oz |
45,000 –
55,000 |
55,506 |
45,000 – 55,000 |
|
Molybdenum |
tonnes |
1,300 –
1,600 |
1,272 |
1,100 – 1,200 |
|
|
|
|
|
|
|
Total |
|
|
|
|
|
Copper |
tonnes |
98,000 –
117,000 |
137,179 |
122,000 – 150,000 |
|
Zinc |
tonnes |
105,000 –
125,000 |
119,106 |
100,000 – 115,000 |
|
Precious metals2 |
oz |
155,000 –
190,000 |
165,912 |
150,000 – 180,000 |
|
Molybdenum |
tonnes |
1,300 – 1,600 |
1,272 |
1,100 – 1,200 |
|
1 Metal reported in concentrate is prior to
refining losses or deductions associated with smelter terms. 2
Precious metals production includes gold and silver production on a
gold-equivalent basis. For 2019, silver was converted to gold at a
ratio of 70:1. For 2020 guidance, silver is converted to gold at a
ratio of 89:1. |
|
In 2020, consolidated production of copper
contained in concentrate is forecast to decrease by approximately
22%i compared to 2019 production, primarily due to planned lower
copper grades at Constancia in line with the mine plan. However,
with the addition of the higher-grade Pampacancha satellite deposit
in Peru, total copper production is expected to increase by 18%i
from 2020 to 2022.
Production of zinc contained in concentrate in
2020 is forecast to be strong with the 2020 guidance range slightly
higher than the range in 2019. That trend is expected to continue
into 2021 with Lalor maintaining steady production at 4,500 tonnes
per day and the company continuing to maximize the output from the
777 mine as it nears the end of its mine life in the second quarter
of 2022.
Consolidated production of precious metals
contained in concentrate in 2020 is forecast to increase by
approximately 4%i compared to 2019 production, primarily due to
higher precious metals production at Lalor from the planned mining
of approximately 90,000 tonnes from the gold zones in 2020 as part
of stope sequencing in preparation for the restart of the New
Britannia gold mill. By 2022, consolidated precious metals
production is expected to increase by 67%i following the restart of
the New Britannia gold mill in Manitoba and the addition of the
Pampacancha high-grade satellite deposit in Peru.
3-Year Production OutlookContained Metal
in Concentrate1 |
2020 Guidance |
2021 Guidance |
2022 Guidance |
|
Manitoba2 |
|
|
|
|
|
Copper |
tonnes |
18,000 –
22,000 |
19,000 –
23,000 |
13,000 – 15,000 |
|
Zinc |
tonnes |
105,000 –
125,000 |
115,000 –
140,000 |
75,000 – 90,000 |
|
Precious metals3 |
oz |
110,000 –
135,000 |
110,000 –
135,000 |
150,000 – 190,000 |
|
|
|
|
|
|
|
Peru |
|
|
|
|
Copper |
tonnes |
80,000 –
95,000 |
80,000 –
100,000 |
100,000 – 125,000 |
|
Precious metals3 |
oz |
45,000 –
55,000 |
85,000 –
100,000 |
105,000 – 130,000 |
|
Molybdenum |
tonnes |
1,300 –
1,600 |
1,000 –
1,200 |
1,500 – 1,800 |
|
|
|
|
|
|
|
Total |
|
|
|
|
|
Copper |
tonnes |
98,000 –
117,000 |
99,000 –
123,000 |
113,000 – 140,000 |
|
Zinc |
tonnes |
105,000 –
125,000 |
115,000 –
140,000 |
75,000 – 90,000 |
|
Precious metals3 |
oz |
155,000 –
190,000 |
195,000 –
235,000 |
255,000 – 320,000 |
|
Molybdenum |
tonnes |
1,300 – 1,600 |
1,000 – 1,200 |
1,500 – 1,800 |
|
1 Metal reported in
concentrate is prior to refining losses or deductions associated
with smelter terms. 2 Manitoba production guidance assumes the 777
mine is depleted in the second quarter of 2022, resulting in lower
copper and zinc production after its closure.3 Precious metals
production includes gold and silver production on a gold-equivalent
basis. Silver is converted to gold at a ratio of 89:1. |
|
Capital Expenditure Guidance
Capital Expenditures1(in $ millions) |
2020 Guidance |
Year Ended Dec. 31,
2019 |
2019 Guidance |
Sustaining capital |
|
|
|
Manitoba2 |
100.0 |
126.3 |
100.0 |
Peru3 |
100.0 |
84.9 |
95.0 |
Total sustaining capital |
200.0 |
211.2 |
195.0 |
Growth capital |
|
|
|
Manitoba |
80.0 |
14.1 |
10.0 |
Peru4 |
70.0 |
2.1 |
45.0 |
Arizona5 |
20.0 |
36.4 |
40.0 |
Total growth capital |
170.0 |
52.6 |
95.0 |
Capitalized exploration |
15.0 |
15.7 |
15.0 |
Total capital expenditures |
385.0 |
279.5 |
305.0 |
1 Excludes
capitalized costs not considered to be sustaining or growth capital
expenditures.2 Manitoba sustaining capital expenditures for the
year ended December 31, 2019 include a new capitalized lease
related to sustaining capital expenditures of $14.3 million not
included in 2019 annual guidance. Excluded from sustaining capital
is the anticipated $20 million expected to be spent on improvements
to the legacy Flin Flon tailings facilities, as described below. 3
Includes capitalized stripping costs. 4 Peru growth capital
expenditures of $45.0 million in 2019 related to expected
expenditures for developing the Pampacancha deposit and acquiring
surface rights, which has been deferred to 2020. 2020 expected
growth capital expenditures include costs associated with project
development and acquiring the surface rights. Some additional
capital costs remain outstanding in recognition of current uses of
land and the company intends to enter into agreements to address
these matters prior to commencing mining activities.5 Arizona
spending includes capitalized costs associated with the Rosemont
and Mason projects. Rosemont’s 2019 guidance was revised to include
$20 million of project costs and $20 million of non-project costs
as announced on November 11, 2019. |
Total planned sustaining capital expenditures in
2020 are expected to slightly decrease from 2019 levels due to
lower spending in Manitoba offset by higher planned spending in
Peru primarily related to higher capitalized stripping costs. In
Manitoba, Hudbay continues to implement improvements on the legacy
Flin Flon tailings impoundment area, in line with higher
industry-wide standards for tailings dam safety following the
failure of other tailings dams in recent years. This spending is
expected to be approximately $20 million per year from 2020 to
2022, but these expenditures will not impact sustaining capital
expenditures since they are associated with the updated
decommissioning and restoration liability, and therefore, will be
accounted for as a drawdown of the liability.
Manitoba growth capital spending of $80 million
relates to a significant portion of the New Britannia mill
refurbishment costs as construction activities are on track to
commence in the second quarter of 2020. The New Britannia mill
refurbishment costs are expected to total approximately $115
million over 2020 and 2021, higher than the original estimate of
approximately $95 million primarily due to the introduction of new
instruments expected to further improve mill efficiency, as well as
labour cost inflation and some cost escalation on equipment. The
capital investment in the New Britannia mill offers high returns
and a short payback period, based on current reserves at Lalor.
Once the New Britannia gold mill is in operation by 2022, gold is
expected to account for over 60% of revenues at Lalor with annual
gold production expected to grow to approximately 140,000 ounces at
a sustaining cash cost of approximately $450 per ounce over the
first five years.
Peru growth capital of $70 million includes
initial expenditures for developing the Pampacancha deposit and
acquiring surface rights from the local community, but excludes the
costs associated with recognizing the current uses of the land by
certain community members, which are subject to pending agreements
with those individuals. Hudbay’s patient approach to community
negotiations has proven successful, demonstrating Hudbay’s strong
relationships with the neighbouring communities and positioning the
company well to unlock future value on its other regional growth
targets in Peru. Arizona spending of $20 million is intended to
support ongoing matters on the Rosemont project and advance
preliminary economic studies at the Mason project in Nevada.
Exploration Guidance
Exploration Expenditures(in $ millions) |
2020 Guidance |
Year Ended Dec. 31,
2019 |
2019 Guidance |
Peru |
15.0 |
17.1 |
20.0 |
Manitoba |
10.0 |
22.9 |
10.0 |
Generative and other |
0.0 |
6.5 |
10.0 |
Total exploration expenditures |
25.0 |
46.5 |
40.0 |
Capitalized spending |
(15.0) |
(15.7) |
(15.0) |
Total exploration expense |
10.0 |
30.8 |
25.0 |
|
Hudbay’s exploration portfolio of owned or
optioned mineral properties consists of approximately 850,000
hectares across Canada, Peru, the United States and Chile. Hudbay’s
2020 exploration budget of $25 million, which includes option
payments, will be focused on exploration near existing processing
infrastructure in Peru and Manitoba.
In Peru, Hudbay continues permitting, community
relations and technical activities required to access and conduct
drilling activities on properties near Constancia. In 2020,
drilling activities will be focused on the Llaguen greenfield
project located 56 kilometres northeast of the city of Trujillo, in
northern Peru, and on the Quehuincha North skarn target located
approximately 11 kilometres from the Constancia mill, where Hudbay
has recently obtained a drilling permit and has an exploration
agreement in place with the local community. At Lalor, the company
expects to conduct additional underground drilling, continuing
efforts to convert existing mineral resources to reserves and to
identify additional gold resources at underground targets. In
addition, surface drilling planned for 2020 in Manitoba will aim to
confirm an initial mineral resource estimate for the gold and
copper-gold mineralization intersected in 2019 at the 1901
Deposit.
Unit Operating Cost Guidance
Combined Mine/Mill Unit Operating Cost1,2 |
2020 Guidance |
Year Ended Dec. 31, 2019 |
2019 Guidance |
Manitoba |
C$/tonne |
130 – 140 |
134 |
115 – 135 |
Peru |
$/tonne |
8.30 – 10.25 |
9.50 |
7.90 – 9.70 |
1 Reflects combined mine, mill and G&A costs
per tonne of milled ore. Peru costs reflect the deduction of
expected capitalized stripping costs.2 Combined unit costs are
non-IFRS financial performance measures with no standardized
definition under IFRS. For further information, please see the
“Non-IFRS Financial Reporting Measures” section of this news
release. |
Combined unit costs for Manitoba in 2020 are
forecast to be similar to 2019 levels as Lalor’s costs have
normalized after the ramp up to 4,500 tonnes per day. Combined unit
costs for Peru in 2020 are also expected to be similar to 2019
levels as the plant continues to operate at full capacity.
Flin Flon Zinc Plant Guidance |
2020 Guidance |
Year EndedDec. 31, 2019 |
2019 Guidance |
Zinc metal produced |
tonnes |
100,000 – 112,000 |
103,340 |
95,000 - 105,000 |
Unit operating costs1 |
C$/lb |
0.45 – 0.52 |
0.49 |
0.47 - 0.55 |
1 Unit costs are non-IFRS financial performance measures with no
standardized definition under IFRS. For further information, please
see the “Non-IFRS Financial Reporting Measures” section of this
news release.
Metal production in any particular quarter may
vary from the implied annual guidance rate based on variations in
grades and recoveries due to the areas mined in that quarter, the
timing of planned maintenance, and other factors. Mining and
processing costs in any particular quarter can also vary from the
annual guidance rate above based on a variety of factors, including
the scheduling of maintenance events and seasonal heating
requirements, particularly in Manitoba. In Peru, the semi-annual
mill maintenance shutdowns at Constancia typically occur during the
second and fourth quarters each year. In Manitoba, the company
expects to perform maintenance on the Stall concentrator during the
second quarter of 2020 and on the Lalor mine hoist facilities in
the third quarter of 2020.
Leadership Announcements
After assisting with the Chair transition and
the CEO search, Alan Hibben is stepping down as a Director. Mr.
Hibben joined the Board in 2009 and served as Chair from 2017 to
2019. The Board thanks Mr. Hibben for his dedicated service as a
Director and former Chair of the company.
On January 22, 2020, Peter Kukielski was
appointed as Hudbay's President and CEO. Mr. Kukielski had been
serving as Interim President and CEO since July 2019. Mr. Kukielski
has more than 30 years of extensive global experience in the base
metals, precious metals and bulk materials sectors.
The company also announces that David Bryson,
Hudbay’s Senior Vice President and Chief Financial Officer, is
retiring from the company, effective March 31, 2020, to pursue
family and personal commitments. A search for a new CFO is
underway, and Eugene Lei, currently Hudbay’s Senior Vice President,
Corporate Development and Strategy, will act as Interim CFO until
the search process is concluded, after which he is expected to
return to focusing on his current responsibilities. As a member of
the executive committee, Mr. Lei has been working closely with Mr.
Bryson on financial matters over the last several years, and they
will continue to work closely together with Mr. Kukielski through
this period to provide continuity and support a seamless
transition. The Board and management team are grateful for Mr.
Bryson’s 11 years of service as Hudbay’s CFO and wish him well on
his future personal endeavors.
Execution of Pampacancha Surface Rights
Agreement
On February 18, 2020, Hudbay announced that the
community of Chilloroya formally approved a surface rights
agreement with the company for the Pampacancha satellite deposit
located near the Constancia mine in Peru. With the completion of
this agreement, the company expects to be mining ore from the
deposit in late 2020. The company expects growth capital
expenditures associated with project development and acquiring the
surface rights for Pampacancha to be approximately $70 million in
2020. In accordance with Peru’s Consulta Previa law, additional
consultation between the Peruvian government and the local
community is required before Hudbay can begin development
activities. Some additional capital costs remain outstanding in
recognition of current uses of the land by certain community
members and the company intends to enter into agreements to address
these matters prior to commencing mining activities. With the
community’s endorsement of the agreement, the company believes
these processes will be concluded in the first half of 2020.
Logistics Update
Hudbay is closely monitoring the development of
the Covid-19 coronavirus outbreak in China, but at this time there
has been no impact on the timing of copper concentrate sales to
customers in China or elsewhere. In Canada, recent protests
involving blockades of CN rail service have affected shipments of
zinc metal and copper concentrate from the Manitoba operations, and
may result in elevated inventories in the first quarter of
2020.
Towards Sustainable Mining Leadership
Award
Hudbay’s Manitoba operations received the Mining
Association of Canada’s Towards Sustainable Mining (“TSM”)
Leadership Award for meeting or exceeding a Level A ranking in
their results across all of the six areas of performance. The
performance areas are aboriginal and community outreach, crisis
management, safety and health, tailings management, biodiversity
conservation management, and energy use and greenhouse gas
emissions management. Hudbay is extremely proud of this achievement
as it further demonstrates the company’s commitment and successful
track record of strong environmental, social and governance
performance.
Rosemont Litigation Update
On July 31, 2019, the U.S. District Court for
the District of Arizona (“Court”) issued a ruling in two of the
lawsuits challenging the U.S. Forest Service’s issuance of the
Final Record of Decision (“FROD”) for the Rosemont project in
Arizona. The Court ruled to vacate and remand the FROD thereby
delaying the expected start of construction of Rosemont. In
December of 2019, Hudbay and the U.S. Department of Justice each
filed a notice of appeal in respect of the Court’s decision to the
U.S. Ninth Circuit Court of Appeals.
On February 10, 2020, the Court issued a ruling
in the third lawsuit challenging the U.S. Forest Service's issuance
of the FROD for the Rosemont mine. In this lawsuit, the plaintiffs
challenged the Biological Opinion that was issued by the U.S. Fish
and Wildlife Service and relied on by the U.S. Forest Service as
part of the permitting process. The Court ruled to remand certain
aspects of the U.S. Fish and Wildlife Service's analysis and
findings related to the Biological Opinion back to the agencies for
further review. While this ruling did not come as a surprise to
Hudbay in light of the Court’s previous ruling on the FROD for
Rosemont, the company believes remanding these issues is
unnecessary as the federal agencies’ research and studies concluded
that the potential impacts to endangered species would comply with
the regulations. Hudbay is reviewing the decision and will continue
following the direction of the government agencies through the
permitting process.
Other Key Strategic
Initiatives
New Britannia mill refurbishment activities are
progressing in line with the development schedule laid out in the
February 2019 mine plan. Detailed engineering is on track to be
completed in the first quarter of 2020 and environmental permits
are expected in the second quarter of 2020. Construction activities
are expected to commence mid-2020 and continue until the third
quarter of 2021, with plant commissioning and ramp-up during the
fourth quarter of 2021. Once the New Britannia mill is
commissioned, average annual gold production from Snow Lake is
expected to be approximately 140,000 ounces during the first five
years at a sustaining cash cost, net of by-product credits, of
approximately $450 per ounce of gold.
Exploration activities in the Snow Lake region
continue to progress, including exploration and engineering studies
at the Lalor in-mine exploration targets and other 100%-owned
deposits in the region, with results expected to be incorporated in
the annual mineral reserve and resource estimate in March 2020. The
company is also continuing drilling activities on the recently
discovered 1901 Deposit, which contains an initial inferred
resource of 2.1 million tonnes at 9.67% zinc, as announced in
August 2019. Drilling on the 1901 Deposit continues to test the
size of the deposit and to confirm the presence of gold and
copper-gold mineralization, with the intention to publish an
initial inferred resource estimate on the gold mineralization and
upgrade the zinc mineral resource estimate to a higher confidence
category in 2020.
In the fourth quarter of 2019, the company
acquired a prospective package of patented and unpatented mining
claims contiguous to its Mason project near Yerington, Nevada. The
land package, known as the Mason Valley properties, is an
exploration stage project that includes past producing mines and
has the potential to provide additional mineral resources to
Hudbay’s Mason project.
Hudbay has also entered into an option agreement
to acquire an 80% interest in the Gray Hills unpatented mining
claims in Lyon County, Nevada, located approximately 25 kilometres
southeast of the Mason project, as part of its land consolidation
in the Yerington district.
Dividend Declared
A semi-annual dividend of C$0.01 per share was
declared on February 20, 2020. The dividend will be paid out
on March 27, 2020 to shareholders of record as of March 10,
2020.
Non-IFRS Financial Performance
Measures
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. Combined unit operating cost and zinc plant unit
cost are shown because the measures are used by the company as a
key performance indicator to assess the performance of its mining
and processing operations. 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 profit or cash flow from operations as determined
under IFRS. Other companies may calculate these measures
differently. For further details on these measures, including
reconciliations to the most comparable IFRS measures, please refer
to page 42 of Hudbay’s management’s discussion and analysis
for the three and twelve months ended December 31, 2019 available
on SEDAR at www.sedar.com.
Website Links
Hudbay:
www.hudbay.com
Management’s Discussion and Analysis:
http://www.hudbayminerals.com/files/doc_financials/2019/Q4/MDA194.pdf
Financial Statements:
http://www.hudbayminerals.com/files/doc_financials/2019/Q4/FS194.pdf
Conference Call and Webcast
Date: |
Friday, February 21, 2020 |
Time: |
9:00 a.m. ET |
Webcast: |
http://services.choruscall.ca/links/hudbay20200221.html |
Dial in: |
1-416-915-3239 or
1-800-319-4610 |
Qualified Person
The technical and scientific information in this
news release related to the Constancia mine and Rosemont project
has been approved by Cashel Meagher, P. Geo, Hudbay’s Senior Vice
President and Chief Operating Officer. The technical and scientific
information related to the company’s other material mineral
projects contained in this news release has been approved by
Olivier Tavchandjian, P. Geo, Hudbay’s Vice-President Exploration
and Geology. Messrs. Meagher and Tavchandjian are qualified persons
pursuant to NI 43‑101. For a description of the key assumptions,
parameters and methods used to estimate mineral reserves and
resources at Hudbay’s material 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.sedar.com.
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, production, cost and capital and exploration
expenditure guidance, anticipated production at the company’s mines
and processing facilities, expectations regarding the timing of
mining activities at the Pampacancha deposit, the anticipated
timing, cost and benefits of developing the Rosemont project and
the outcome of litigation challenging Rosemont's permits,
expectations regarding the appointment of a permanent CFO,
expectations regarding the impact of the Covid-19 coronavirus
outbreak and CN rail blockades on the company’s operations and
financial performance, expectations regarding the Lalor gold
strategy, including the refurbishment of the New Britannia mill,
and the possibility of optimizing the value of the gold resources
in Manitoba, the future potential of the 1901 deposit, including
the possibility of identifying additional gold resources, the
possibility of converting inferred mineral resource estimates to
higher confidence categories, the potential and the company’s
anticipated plans for advancing its mining properties surrounding
Constancia and the Mason project, anticipated mine plans,
anticipated metals prices and the anticipated sensitivity of the
company’s financial performance to metals prices, events that may
affect the 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
identified and were applied by the company in drawing conclusions
or making forecasts or projections set out in the forward-looking
information include, but are not limited to:
- the timing of development and production activities on the
Pampacancha deposit;
- the timing of the Consulta Previa and permitting process for
mining the Pampacancha deposit;
- the timing for reaching additional agreements with individual
community members and no significant unanticipated delays to the
development of Pampacancha;
- the successful completion of the New Britannia project on
budget and on schedule;
- the successful outcome of the Rosemont litigation;
- 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;
- 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 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 exploration, development
and operational projects and ongoing employee relations;
- maintaining good relations with the communities in which the
company operates, including the neighbouring Indigenous
communities;
- 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 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 generally associated
with the mining industry, such as economic factors (including
future commodity prices, currency fluctuations, energy prices and
general cost escalation), uncertainties related to the development
and operation of the company’s projects (including risks associated
with the litigation affecting the Rosemont project), risks related
to the U.S. district court's recent decisions to set aside the U.S.
Forest Service's FROD and the Biological Opinion for Rosemont and
related appeals and other legal challenges, risks related to the
new Lalor mine plan, including the schedule and cost for the
refurbishment of the New Britannia mill and the ability to convert
inferred mineral resource estimates to higher confidence
categories, risks related to the schedule for mining the
Pampacancha deposit (including risks associated with the Consulta
Previa process, risks associated with reaching additional
agreements with individual community members and risks associated
with the rainy season in Peru, and the impact of any schedule
delays), dependence on key personnel and employee and union
relations, risks related to political or social unrest or change,
risks in respect of Indigenous and community relations, rights and
title claims, 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, 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 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.
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. The company 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 diversified mining
company primarily producing copper concentrate (containing copper,
gold and silver) and zinc metal. Directly and through its
subsidiaries, Hudbay owns three polymetallic mines, four ore
concentrators and a zinc production facility in northern Manitoba
and Saskatchewan (Canada) and Cusco (Peru), and copper projects in
Arizona and Nevada (United States). The company’s growth strategy
is focused on the exploration, development, operation and
optimization of properties it already controls, as well as other
mineral assets it may acquire that fit its strategic criteria.
Hudbay’s vision is to be a responsible, top-tier operator of
long-life, low-cost mines in the Americas. Hudbay’s mission is to
create sustainable value through the acquisition, development and
operation of high-quality, long-life deposits with exploration
potential in jurisdictions that support responsible mining, and to
see the regions and communities in which the company operates
benefit from its presence. The company is governed by the Canada
Business Corporations Act and its shares are listed under the
symbol "HBM" on the Toronto Stock Exchange, New York Stock Exchange
and Bolsa de Valores de Lima. Further information about Hudbay can
be found on www.hudbay.com.
For further information, please contact:
Candace BrûléDirector, Investor Relations(416)
814-4387candace.brule@hudbay.com
______________________
i Assuming the mid-point of the respective guidance range.
ii Cash cost, sustaining 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 Reporting Measures” section of this news release.
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