TSX, NYSE – HBM 2025 No. 14 Hudbay Delivers Strong First Quarter 2025 Results Driven by Gold Production and Record Cost Performance
Toronto, Ontario, May 12, 2025 – Hudbay Minerals Inc. (“Hudbay” or the “Company”) (TSX, NYSE: HBM) today released its first quarter 2025 financial results. All amounts are in U.S. dollars, unless otherwise noted.
"Our strong results in the first quarter reflect stable copper production and complementary gold production from our enhanced operating platform, which continued to deliver significant free cash flows and industry-leading margins,” said Peter Kukielski, President and Chief Executive Officer. “We are well-positioned to deliver our full year 2025 consolidated production and cost guidance with the operations delivering in line copper production, better-than-expected gold production and effective cost control in the first quarter. We continue to benefit from steady mill throughput in Peru, higher grades and mill throughput in Manitoba and ongoing optimization efforts in British Columbia. This resulted in record adjusted EBITDA and record low cash cost performance in the quarter. We made significant progress in advancing our growth strategy as we consolidated ownership at Copper Mountain to increase our exposure to a highquality asset in a tier-1 jurisdiction. We are also now fully permitted at Copper World to increase our long-term copper production by more than 50%. We will continue to reinvest in our attractive portfolio of high-return brownfield and greenfield growth opportunities to further enhance our copper and gold exposure and unlock significant value for all our stakeholders.”
Achieved Record Adjusted EBITDA Driven by Strong Gold Production, Stable Copper Production and Industry- leading Margins; 2025 Production and Cost Guidance Reaffirmed
- Achieved revenue of $594.9 million and record quarterly adjusted EBITDAi of $287.2 million in the first quarter of 2025.
- Strong financial results were driven by record low consolidated cash cost performance as all three business units expanded operating cost margins and executed on planned strategies.
- Consolidated copper production of 30,958 tonnes in the first quarter was in line with quarterly cadence expectations. Consolidated gold production of 73,784 ounces was better than quarterly cadence expectations driven by outperformance in Manitoba.
- Industry-leading cost performance continues with record low consolidated cash costi and sustaining cash costi per pound of copper produced, net of by-product credits, of $(0.45) and $0.72, respectively, in the quarter.
- Reaffirmed full year 2025 consolidated production guidance of 117,000 to 149,000 tonnes of copper and 247,500 to 308,000 ounces of gold. Reaffirmed all 2025 cost guidance, including consolidated cash costi guidance of $0.80 to $1.00 per pound of copper and sustaining cash costi guidance of $2.25 to $2.65 per pound of copper.
- Peru operations continued to benefit from strong and consistent mill throughput, achieving an average of approximately 90,200 tonnes per day in the first quarter. Copper production of 20,293 tonnes and gold production of 7,869 ounces was in line with quarterly cadence expectations. Peru cash costi per pound of copper produced, net of by-product credits, of $1.11 was better than expected as the Peru operations demonstrated strong cost control and benefited from higher by-product prices.
- Manitoba operations produced 60,354 ounces of gold in the first quarter, exceeding quarterly cadence expectations as a result of better-than-expected gold grades and recoveries. Manitoba cash costi per ounce of gold produced, net of by-product credits, was $376 during the quarter, a significant decrease compared to prior quarters and continuing to achieve industry-leading cost performance.
- British Columbia operations produced 7,196 tonnes of copper at a cash costi per pound of copper produced, net of by-product credits, of $2.44 in the first quarter, in line with quarterly cadence expectations.
- First quarter net earnings attributable to owners and earnings per share attributable to owners were $100.4 million and $0.25, respectively, a significant increase compared to the first and fourth quarter of 2024, driven by high gross margins with strong revenue and unit cost control. After adjusting for various non-cash items, first quarter adjusted earningsi per share attributable to owners was $0.24.
- Cash and cash equivalents and short-term investments were $582.6 million and total liquidity was $1,008.5 million at the end of the first quarter of 2025.
- Net debt to adjusted EBITDA ratioi was 0.6x in the first quarter of 2025, in line with the fourth quarter of 2024 and significantly improved from 1.3x in the first quarter of 2024 because of successful deleveraging efforts throughout 2024.
Meaningful Gold Exposure and Steady Copper Performance Driving Continued Free Cash Flow Generation
- Hudbay's unique copper and gold diversification in Peru and Canada provides exposure to higher copper and gold prices and attractive free cash flowvii generation.
- While the majority of revenues continue to be derived from copper production, gold represented a higher portion of total revenues at 38% in the first quarter of 2025 compared to 35% in the fourth quarter of 2024, which was driven by high gold production in Manitoba and exposure to higher gold prices.
- Delivered the seventh consecutive quarter of meaningful free cash flowvii generation as a result of continued strong copper and gold production and effective cost control across all business units.
- Achieved record adjusted EBITDAi of $287.2 million in the first quarter of 2025, representing a 12% increase from the fourth quarter of 2024 and a 34% increase from the first quarter 2024.
- Over the last twelve months, generated more than $350 million in free cash flowvii and $895.7 million in adjusted EBITDAi.
- Significant exposure to higher copper and gold prices with a $100 million increase to operating cash flow for every 10% increase in annual copper price and a $56 million increase in operating cash flow for every 10% increase in annual gold price, using the mid-point of 2025 guidance rangesii.
Reinvesting in High-return Growth Initiatives to Further Enhance Copper and Gold Exposure
- Advancing high-return brownfield mill initiatives and greenfield copper projects to drive near-term and longterm production growth with $25.5 million in growth capital expenditures during the first quarter of 2025.
- Consolidated copper production is expected to average 144,000iii tonnes per year over the next three years, maintaining stable production levels from 2024. Consolidated copper production of 161,000iii tonnes is expected in 2027, representing a 17% increase from 2024 and reflects the benefits from the completion of the optimization efforts at Copper Mountain.
- Strong complementary gold exposure with consolidated gold production expected to average 253,000iii ounces per year over the next three years, reflecting continued strong production in Manitoba.
- Following quarter-end, completed transaction with MMC to consolidate 100% ownership of the Copper Mountain mine in a highly accretive transaction to further increase Hudbay's exposure to a long-life, highquality copper asset in a tier-1 mining jurisdiction, resulting in a 200% increase in attributable copper production from Copper Mountain in 2027 compared to 2024.
- Advancing feasibility studies and minority joint venture partner process for Copper World. Copper World is the highest grade and lowest capital intensity fully permitted copper project in the Americas.
- Optimization efforts at Copper Mountain are focused on executing the planned accelerated stripping program and mill throughput improvement projects, including the planned conversion of the third ball mill to a second SAG mill in the second half of 2025.
- Drill permitting for highly prospective Maria Reyna and Caballito properties near Constancia continues to advance through the multi-step regulatory process.
- Achieved significant progress with the development of the drifts towards the 1901 deposit in Snow Lake where a recent exploration drill hole intersected zinc-rich massive sulphides 20 metres earlier than anticipated, and planned first ore remains on track for the second quarter of 2025. Exploration and definition drilling planned over the next two years.
- Large exploration program in Snow Lake continues to execute threefold strategy focused on near-mine exploration to increase near-term production and mineral reserves, testing regional satellite deposits for additional ore feed to utilize available capacity at the Stall mill, and exploring the large land package for a potential new anchor deposit to meaningfully extend mine life.
- Signed exploration agreement with the Mosakahiken Cree Nation related to the Talbot copper-zinc-gold deposit near Snow Lake, representing the second First Nations exploration agreement that Hudbay has entered into this year as the Company continues to build positive relationships and advance shared opportunities with local First Nations communities.
- Enhancing stakeholder engagement and advancing additional metallurgical studies at the Mason copper project in Nevada.
- Continuing to advance Flin Flon tailings reprocessing opportunities through metallurgical test work and economic evaluation to assess the possibility of producing critical minerals and precious metals in an environmentally friendly manner.
Summary of First Quarter Results
Consolidated copper production of 30,958 tonnes in the first quarter of 2025 was in line with quarterly production cadence expectations, while consolidated gold production of 73,784 ounces was better than quarterly production cadence expectations. Consolidated copper and gold production was lower than the fourth quarter of 2024 due to lower planned grades in Peru as Hudbay is completing the final stripping phase in the high-grade Pampacancha pit, partially offset by higher gold production in Manitoba from better-than-expected gold grades. Consolidated silver production of 919,775 ounces and zinc production of 6,265 tonnes in the first quarter of 2025 were lower than the fourth quarter of 2024 primarily due to lower grades in Peru as the Company completed planned stripping activities.
Cash generated from operating activities of $124.8 million decreased compared to the fourth quarter of 2024 as a result of higher cash taxes paid which are a function of higher profits in earlier quarters in Peru and Manitoba. Operating cash flow before change in non-cash working capital was $163.5 million during the first quarter of 2025, reflecting a decrease of $68 million compared to the fourth quarter of 2024. The decrease was primarily the result of lower gold and copper sales volumes in Peru as expected.
First quarter adjusted EBITDAi was $287.2 million, a 12% increase compared to $257.3 million in the fourth quarter of 2024 as exposure to higher copper and gold prices in the quarter offset the lower sales volume.
Net earnings attributable to owners in the first quarter of 2025 was $100.4 million, or $0.25 per share, compared to $21.2 million, or $0.05 per share, in the fourth quarter of 2024. The significant increase in earnings is the result of high gross margins from strong revenue growth on the back of higher realized copper and gold prices and strong unit cost control. In addition to higher mining and income tax expense experienced in the first quarter of 2025, the quarter was also impacted by various non-cash charges for revaluation loss of closed sites reclamation provisions, mark-to-market revaluation gain on various instruments, and foreign exchange gain, among other items.
Adjusted net earnings attributable to ownersi and adjusted net earnings per share attributable to ownersi in the first quarter of 2025 were $93.8 million and $0.24 per share, respectively, after adjusting for various non-cash items on a pre-tax basis such as a non-cash loss of $12.8 million related to quarterly revaluation of Hudbay's closed site environmental reclamation provision, a $10.5 million variable consideration adjustment gain associated with the stream revenue and accretion, a $3.1 million mark-to-market revaluation gain on various instruments such as unrealized strategic copper hedges, investments and share-based compensation, a non-cash $3.1 million foreign exchange gain, and a $1.9 million gain related to flow-through share expenditures, among other items. This compares to adjusted net earnings attributable to ownersi and net earnings per share attributable to ownersi of $70.3 million and $0.18 per share in the fourth quarter of 2024. The sharp increase in adjusted net earnings attributable to ownersi and adjusted net earnings per share attributable to ownersi is for the same reasons discussed above for net earnings.
In the first quarter of 2025, consolidated cash costi per pound of copper produced, net of by-product credits, achieved record low levels of $(0.45), compared to $0.45 in the fourth quarter of 2024. This improvement was a result of higher by-product credits and strong operating cost performance across all business units, partially offset by expected lower production levels in Peru during the quarter. Consolidated sustaining cash costi per pound of copper produced, net of by-product credits, was a record low at $0.72 in the first quarter of 2025, compared to $1.37 in the fourth quarter of 2024. The improvement was driven by the same factors impacting consolidated cash cost and slightly lower sustaining capital expenditures in the first quarter. Consolidated all-in sustaining cash costi per pound of copper produced, net of by-product credits, was $0.97 in the first quarter of 2025, lower than $1.53 in the fourth quarter of 2024 mainly due to the same reason outlined above.
As at March 31, 2025, total liquidity was $1,008.5 million, including $562.6 million in cash and cash equivalents, $20.0 million in short-term investments as well as undrawn availability of $425.9 million under the Company's revolving credit facilities. Net debti at the end of the first quarter was $526.1 million and remained consistent with the fourth quarter of 2024.
Consolidated Financial Condition Mar. 31, 2025 Dec. 31, 2024 Mar. 31, 2024 (in $ millions, except net debt to adjusted EBITDA ratio)
| Cash and cash equivalents and short-term investments | 582.6 | 581.8 | 284.4 |
| Total long-term debt | 1,108.7 | 1,107.5 | 1,278.6 |
| Net debt1 | 526.1 | 525.7 | 994.2 |
598.0 511.3
Working capital2 200.9
| Total assets | 5,507.0 | 5,487.6 | 5,231.3 |
| Equity attributable to owners of the Company | 2,653.2 | 2,553.2 | 2,107.5 |
| Net debt to adjusted EBITDA1,3 | 0.6 | 0.6 | 1.3 |
1 Net debt and net debit to adjusted EBITDA are non-GAAP financial performance measures with no standardized definition under IFRS. For further information, please see the "Non-GAAP 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 financial statements.
3 Net debt to adjusted EBITDA for the 12 month period.
Consolidated Financial Performance Three Months Ended Mar. 31, 2025 Dec. 31, 2024 Mar. 31, 2024 594.9
Revenue $000s 584.9 525.0
| Cost of sales | $000s | 363.6 | 400.5 | 373.0 |
| Earnings before tax | $000s | 171.3 | 103.7 | 67.8 |
| Net earnings | $000s | 19.3 | 18.5 |
99.2
Net earnings attributable to owners $000s 100.4 21.2 22.3 Basic and diluted attributable earnings per $/share 0.25 0.05 0.06 share1 Adjusted earnings attributable per share1 $/share 0.24 0.18 0.17 Operating cash flow before change in non- $ millions 163.5 231.5 147.5 cash working capital Adjusted EBITDA1 $ millions 287.2 257.3 215.0 1 Adjusted earnings per share - attributable to owners and adjusted EBITDA are non-GAAP financial performance measures with no standardized definition under IFRS. For further information and a detailed reconciliation, please see discussion under the “Non-GAAP Financial Performance Measures” section of this news release.
Consolidated Production and Cost Performance Three Months Ended Mar. 31, 2025 Dec. 31, 2024 Mar. 31, 2024 Contained metal in concentrate and doré produced1
Copper tonnes 30,958 43,262 34,749 Gold ounces 94,161 90,392
73,784
| Silver | ounces | 919,775 | 1,311,658 | 947,917 |
| Zinc | tonnes | 6,265 | 8,385 | 8,798 |
| Molybdenum | tonnes | 397 | 195 | 397 |
Payable metal sold
| Copper | tonnes | 31,768 | 37,927 | 33,608 |
| Gold2 | ounces | 75,092 | 92,734 | 108,081 |
| Silver2 | ounces | 1,006,968 | 1,150,518 | 1,068,848 |
| Zinc | tonnes | 4,857 | 5,261 | 6,119 |
| Molybdenum | tonnes | 448 | 182 | 415 |
Consolidated cash cost per pound of copper produced3
| Cash cost | $/lb | (0.45) | 0.45 | 0.16 |
| Sustaining cash cost | $/lb | 0.72 | 1.37 | 1.00 |
| All-in sustaining cash cost | $/lb | 1.53 | 1.29 |
0.97
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.
Peru Operations Review
Peru Operations Three Months Ended
Constancia ore mined1 8,628,279
tonnes 4,186,058 2,559,547
| Copper | % | 0.28 | 0.40 | 0.31 |
| Gold | g/tonne | 0.03 | 0.04 | 0.04 |
| Silver | g/tonne | 3.14 | 3.88 | 2.79 |
| Molybdenum | % | 0.02 | 0.02 | 0.01 |
| Pampacancha ore mined1 | tonnes | 389,189 | 4,037,264 | 2,214,354 |
| Copper | % | 0.44 | 0.63 | 0.56 |
| Gold | g/tonne | 0.26 | 0.38 | 0.32 |
| Silver | g/tonne | 3.68 | 6.43 | 4.64 |
| Molybdenum | % | 0.01 | 0.00 | 0.02 |
| Total ore mined | tonnes | 9,017,468 | 8,223,322 | 4,773,901 |
| Strip ratio4 | 1.02 | 1.22 | 1.95 | |
| Ore milled | tonnes | 8,114,024 | 7,999,453 | 8,077,962 |
| Copper | % | 0.30 | 0.48 | 0.36 |
| Gold | g/tonne | 0.05 | 0.20 | 0.15 |
| Silver | g/tonne | 3.22 | 5.28 | 3.48 |
| Molybdenum | % | 0.01 | 0.01 | 0.01 |
| Copper recovery | % | 87.8 | 84.9 |
84.6
| Gold recovery | % | 56.5 | 73.3 | 73.4 |
| Silver recovery | % | 66.0 | 71.4 | 70.7 |
| Molybdenum recovery | % | 35.7 | 37.1 | 43.2 |
Contained metal in concentrate
| Copper | tonnes | 20,293 | 33,988 | 24,576 |
| Gold | ounces | 7,869 | 38,079 | 29,144 |
| Silver | ounces | 554,692 | 969,502 | 639,718 |
| Molybdenum | tonnes | 397 | 195 | 397 |
Payable metal sold
| Copper | tonnes | 22,890 | 28,775 | 23,754 |
| Gold | ounces | 14,362 | 37,459 | 42,677 |
| Silver | ounces | 714,654 | 824,613 | 753,707 |
| Molybdenum | tonnes | 182 | 415 |
| Combined unit operating cost2,3 | $/tonne | 11.09 | 15.25 | 10.92 |
| Cash cost3 | $/lb | 1.11 | 1.00 | 0.43 |
| Sustaining cash cost3 | $/lb | 1.92 | 1.48 | 1.02 |
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 first quarter of 2025, the Peru operations produced 20,293 tonnes of copper, 7,869 ounces of gold, 554,692 ounces of silver and 397 tonnes of molybdenum, in line with mine plan quarterly cadence expectations. Production of copper, gold and silver in the first quarter of 2025 was lower than the fourth quarter of 2024 due to planned lower grades as a larger portion of lower grade Constancia ore was processed in the current quarter. Hudbay is on track to achieve its 2025 production guidance for all metals in Peru.
Copper production was in line with mine plan expectations as the final phase of planned stripping at the Pampacancha deposit was underway during the first quarter of 2025. This resulted in planned lower head grades to the mill as Constancia ore represented a majority of the ore feed during the first quarter of 2025. Peru operations continued to benefit from strong and consistent mill throughput in 2025, averaging approximately 90,200 tonnes processed per day in the first quarter of 2025, partially offsetting the planned lower head grades. The operations continued to deliver strong cost control, resulting in lower combined unit cost compared to the fourth quarter of 2024.
Total ore mined in the first quarter of 2025 increased by 10% compared to the fourth quarter of 2024. Ore mined from Pampacancha during the first quarter of 2025 decreased to 0.4 million tonnes, as Hudbay is performing the final stripping phase in the Pampacancha pit prior to depletion in late 2025. Ore mined from Constancia significantly increased during the first quarter of 2025 compared to recent quarters, in line with mine plan expectations.
Milled copper and gold grades decreased by 38% and 75%, respectively, in the first quarter of 2025 compared to the fourth quarter of 2024, in line with the mine plan due to planned lower ore feed from Pampacancha. The Constancia mill achieved copper recoveries of 85% in the first quarter of 2025, lower than the fourth quarter of 2024 due to planned lower grades. Recoveries of gold and silver during the first quarter of 2025 were 57% and 66%, respectively, remaining in line with Hudbay's metallurgical models for the ore types that were being processed.
Combined mine, mill and G&A unit operating costi in the first quarter of 2025 was $11.09 per tonne, 27% lower than the fourth quarter of 2024 due to a planned semi-annual mill maintenance shutdown in the fourth quarter and lower overall onsite costs.
Cash costi per pound of copper produced, net of by-product credits, in the first quarter of 2025 was $1.11, outperforming quarterly cadence expectations as a result of strong operating cost performances and higher by-product prices. Cash costi per pound of copper produced, net of by-product credits was higher than the fourth quarter of 2024 due to planned lower copper production and gold by-product credits, partially offset by lower treatment, refining and freight charges. Cash costi for the quarter outperformed the low-end of the 2025 guidance range, and Hudbay is well positioned to achieve the full year 2025 cash cost guidance range in Peru.
Sustaining cash costi per pound of copper produced, net of by-product credits, was $1.92 in the first quarter of 2025, an increase compared to the fourth quarter of 2024 primarily due to the same factors described above for the cash cost variance.
The Company continues to evaluate opportunities to further increase mill throughput after the Peruvian Ministry of Energy and Mines approved a regulatory change in 2024 to allow mining companies in Peru to increase throughput by up to 10% above permitted levels. Hudbay is advancing engineering studies for the construction of a pebble crusher at Constancia commencing in late 2025, which is expected to further increase throughput levels starting in the second half of 2026.
Manitoba Operations Review
Manitoba Operations Three Months Ended
Lalor
| Ore mined | tonnes | 384,234 | 422,454 | 407,708 |
| Gold | g/tonne | 5.46 | 4.61 | 4.84 |
| Copper | % | 0.95 | 0.95 | 0.84 |
| Zinc | % | 2.95 | 2.92 |
2.42
Silver g/tonne 31.23 31.91 23.44
New Britannia
Ore milled tonnes 189,124 185,592 170,409
7.37
Gold g/tonne 5.99 7.03
| Copper | % | 1.18 | 1.17 | 1.13 |
| Zinc | % | 1.00 | 1.08 | 0.82 |
| Silver | g/tonne | 33.35 | 33.97 | 21.60 |
| Gold recovery1 | % | 90.3 | 90.2 | 88.6 |
| Copper recovery | % | 91.3 |
90.3 96.2 Silver recovery1 % 81.6 79.6 82.0
Stall Concentrator
Ore milled tonnes 215,286 222,004 219,358
3.86
Gold g/tonne 3.36 3.07
| Copper | % | 0.76 | 0.73 | 0.64 |
| Zinc | % | 3.44 | 4.62 | 4.54 |
| Silver | g/tonne | 29.53 | 29.90 | 24.46 |
| Gold recovery | % | 70.1 | 69.6 | 68.0 |
| Copper recovery | % | 84.4 | 91.7 |
88.3
Zinc recovery % 84.7 81.7 88.4 Silver recovery % 58.7 55.1 59.8
Total contained metal in concentrate and doré2 60,354
Gold ounces 51,438 56,831
| Copper | tonnes | 3,469 | 3,347 | 3,149 |
| Zinc | tonnes | 6,265 | 8,385 | 8,798 |
| Silver | ounces | 285,603 | 283,223 | 219,823 |
Total payable metal sold
| Gold | ounces | 55,765 | 50,239 | 62,003 |
| Copper | tonnes | 2,725 | 3,321 | 2,921 |
| Zinc | tonnes | 4,857 | 5,261 | 6,119 |
| Silver | ounces | 232,255 | 282,158 | 231,841 |
| Combined unit operating cost3,4 | C$/tonne | 214 | 233 | 235 |
| Gold cash cost3 | $/oz | 376 | 607 | 736 |
| Gold sustaining cash cost3 | $/oz | 626 | 908 | 950 |
1 Gold and silver recovery includes total recovery from concentrate and doré.
2 Metal reported in concentrate is prior to deductions associated with smelter terms.
3 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-GAAP financial performance measures with no standardized definition under IFRS. For further information, please see the “Non-GAAP Financial Performance Measures” section of this news release.
4 Reflects combined mine, mill and G&A costs per tonne of ore milled.
The Manitoba operations achieved impressive metal production and cost performance in the first quarter of 2025, significantly exceeding budgeted targets. The operations produced 60,354 ounces of gold, 3,469 tonnes of copper, 6,265 tonnes of zinc and 285,603 ounces of silver during the first quarter of 2025. Compared to the fourth quarter of 2024, production of gold meaningfully increased by 17% due to higher grades. Hudbay is on track to achieve its 2025 production guidance for all metals in Manitoba.
The Lalor mine achieved strong production results in the first quarter, averaging 4,300 tonnes per day, demonstrating resilience despite one-off ore handling challenges in March. The mine maintained focus on ore quality, implementing stope modifications and improving mucking productivity rates. A significant focus is on capital development, aimed at securing high-grade copper-gold mineralization from Zone 27 and preparing for the next copper-gold mining front in Zone 17. The first quarter of 2025 saw significant improvements in ore quality, aligned with improvements in mining techniques, most notably in longhole muck fragmentation, and anticipated higher grade precious metal sequences.
Total ore mined in Manitoba in the first quarter of 2025 was 6% lower than the fourth quarter of 2024 primarily due to temporary ore handling challenges at Lalor in March that were promptly resolved. Gold grades were better than expected, resulting in an 18% increase from the fourth quarter of 2024. Copper, zinc and silver grades were in line with mine plan expectations.
The New Britannia mill continued its exceptional performance from recent quarters, achieving throughput of approximately 2,100 tonnes per day in the first quarter of 2025, slightly higher than the fourth quarter of 2024. New elongated cyclones were installed at New Britannia during the first quarter, mirroring successful upgrades at the Stall mill, and supporting Hudbay's strategy of low-capital projects to boost throughput and maintain gold recoveries. Gold recovery in the first quarter of 2025 was 90%, in line with the fourth quarter of 2024.
At the Stall mill, a slight quarter-over-quarter reduction in throughput occurred as more ore was diverted to New Britannia in the first quarter. The Stall mill achieved gold recoveries of 70% in the first quarter of 2025, benefitting from recent recovery improvement programs continuing to be realized, with gold recoveries exceeding prior year figures. Efforts continue to optimize recovery, particularly by reducing grind size.
The Manitoba operations continued to drive operating efficiencies, resulting in improved cost performance on both a unit operating basis and on a cash cost basis. Combined mine, mill and G&A unit operating costsi in the first quarter of 2025 were C$214 per tonne, representing an 8% decrease from the fourth quarter of 2024, primarily due to lower mine and mill costs.
Cash costi per ounce of gold produced, net of by-product credits, in the first quarter of 2025 was $376, a significant 38% decrease compared to the fourth quarter of 2024 primarily due to higher gold production and lower mining and milling costs as a result of continued operating efficiencies and favorable exchange rates. With first quarter cash costs outperforming the low end of the cash cost guidance range, Hudbay is well positioned to achieve the 2025 cash cost guidance range in Manitoba.
Sustaining cash costi per ounce of gold produced, net of by-product credits, in the first quarter of 2025 was $626, a 31% decrease compared to the fourth quarter of 2024, primarily due to the same factors affecting cash cost, partially offset by higher sustaining capital costs during the quarter.
The exploration and haulage drifts at 1901 maintained solid development progress towards the deposit in the first quarter of 2025. A recent drill hole from the exploration drift intersected zinc-rich massive sulphides 20 metres earlier than anticipated, confirming planned first ore in the second quarter of 2025. The next two years will focus on exploration, definition drilling, orebody access, and establishing critical infrastructure for full production in 2027.
British Columbia Operations Review
British Columbia Operations1 Three Months Ended
| Mar. 31, 2025 | Dec. 31, 2024 | Mar. 31, 2024 | |
|---|---|---|---|
| Ore mined2 | tonnes 2,648,094 | 2,374,044 | 3,722,496 |
| Strip ratio3 | 7.36 | 4.10 |
6.73
Ore milled tonnes 2,760,986 2,880,927 3,180,149 Copper % 0.26 0.27
0.33
| Gold | g/tonne | 0.10 | 0.09 | 0.07 |
| Silver | g/tonne | 1.28 | 0.92 | 1.19 |
| Copper recovery | % | 78.3 | 79.5 | 83.4 |
| Gold recovery | % | 63.4 | 55.8 | 61.8 |
| Silver recovery | % | 69.8 | 69.0 | 72.4 |
Total contained metal in concentrate
| Copper | tonnes | 7,196 | 5,927 | 7,024 |
| Gold | ounces | 5,561 | 4,644 | 4,417 |
| Silver | ounces | 79,480 | 58,933 | 88,376 |
Total payable metal sold
| Copper | tonnes | 6,153 | 5,831 | 6,933 |
| Gold | ounces | 4,965 | 5,036 | 3,401 |
| Silver | ounces | 43,747 | 83,300 |
60,059
| Combined unit operating cost4,5 | C$/tonne | 25.98 | 23.22 | 23.67 |
| Cash cost5 | $/lb | 2.44 | 3.00 | 3.49 |
| Sustaining cash cost5 | $/lb | 5.76 | 4.85 |
4.24
1 Copper Mountain mine results are stated at 100%. As at March 31, 2025, Hudbay owned 75% of the Copper Mountain mine. Subsequent to quarter end, Hudbay completed the acquisition of the remaining 25% interest, and as of the date of this news release, Hudbay owns 100% of the 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 general and administrative ("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-GAAP financial performance measures with no standardized definition under IFRS. For further information, please see the “Non-GAAP Financial Performance Measures” section of this news release.
Hudbay continues its focus on advancing optimization plans at the Copper Mountain mine, including opening up and optimizing the mine ore feed to the plant and implementing plant improvement initiatives that mirror Hudbay's successful processes at Constancia. These optimization initiatives have successfully increased the total tonnes moved and improved mill reliability. The British Columbia operations produced 7,196 tonnes of copper, 5,561 ounces of gold and 79,480 ounces of silver in the first quarter of 2025. Production of copper, gold and silver increased by 21%, 20% and 35%, respectively, compared to the fourth quarter of 2024, largely due to higher grades. Hudbay is on track to achieve its 2025 production guidance for all metals in British Columbia and continues to expect higher production in the second half of the year as the mill improvement projects take effect.
Mining activities are focused on continuing to execute the three-year accelerated stripping program intended to bring higher grade ore into the mine plan. In January, Hudbay completed feasibility engineering 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. This is expected to be achieved through the conversion of the third ball mill to a second SAG mill, which remains on track for completion in the second half of 2025.
Total ore mined at Copper Mountain in the first quarter of 2025 was 2.6 million tonnes, a 12% increase compared to the fourth quarter of 2024. Total material moved continued to ramp up in the quarter 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 first quarter of 2025 was on mining efficiencies and operator recruitment to effectively utilize the available haul truck fleet. As a result, total material moved is expected to increase quarter-over-quarter in 2025 as per the mine plan.
The mill processed 2.8 million tonnes of ore during the first quarter of 2025. Ore processed in the first quarter of 2025 was lower than the fourth quarter of 2024, limited by both planned and unplanned maintenance and elevated clay material last quarter which impacted the secondary crushing circuit. In the first quarter of 2025, a number of initiatives were advanced to address these issues and other identified constraints to improve throughput. Several mill initiatives have been implemented in 2025, including crushing circuit chute modifications, recovery improvements, reprogramming the mill expert system, installation of advanced semi-autogenous grinding control instrumentation, redesigned SAG liner package and updated operational procedures intended to remove magnetite from the pebble stream. Progressive improvements are expected to continue through 2025.
Milled copper grades during the first quarter of 2025 were 27% higher than in the fourth quarter of 2024. The accelerated stripping efforts unlocked a higher-grade mining sequence during the first quarter of 2025, which reduced the amount of ore processed from stockpiles and resulted in higher grades this quarter compared to 2024. Copper recoveries of 78% in the quarter were 2% lower than the preceding quarter. Milled gold grades were higher in the first quarter of 2025 compared to the fourth quarter of 2024, resulting in higher gold recoveries of 63% in the first quarter of 2025.
Combined mine, mill and G&A unit operating costsi in the first quarter of 2025 were C$25.98 per tonne milled, higher than the fourth quarter of 2024. The increase was due to higher mining and G&A costs and lower ore milled, partially offset by lower milling costs.
Cash costi and sustaining cash costi per pound of copper produced, net of by-product credits, in the first quarter of 2025 were $2.44 and $4.24, respectively. Cash costs were 19% lower than the fourth quarter of 2024, largely due to higher by-product credits and the benefit from the continued focus on optimization efforts. With first quarter cash cost at the low-end of the 2025 guidance range, Hudbay is well positioned to achieve the full year 2025 cash cost guidance range in British Columbia.
Sustaining cash costsi were 26% lower than in the fourth quarter of 2024 due to the same factors affecting cash costs as well as lower sustaining capital expenditures.
Consolidated 100% Ownership in Copper Mountain
On March 27, 2025, Hudbay announced an agreement with Mitsubishi Materials Corporation ("MMC") to acquire MMC’s 25% minority interest in Copper Mountain for an upfront cash payment of $4.5 million and up to $39.75 million in deferred and contingent cash payments. The transaction closed on April 30, 2025 and Hudbay now holds a 100% interest in the Copper Mountain mine. In connection with the transaction, Hudbay is solely responsible to settle any of Copper Mountain's outstanding obligations, including an intercompany loan owing to Hudbay, of which 25% represents approximately $104 million. The transaction is highly accretive to Hudbay’s net asset value per share and increases Hudbay's exposure to a long-life, high-quality copper asset in a tier-1 mining jurisdiction. The additional attributable production from the Copper Mountain mine reinforces Hudbay’s position as the second largest copper producer in Canada and further strengthens its position as a North American copper champion. Hudbay has initiated a review of its Canadian corporate structure which is anticipated to generate tax synergies through the sharing of tax pools between its various Canadian entities.
Continued Free Cash Flow Generation from Steady Operating Performance and Strong Copper and Gold Exposure
Hudbay has delivered seven consecutive quarters of meaningful free cash flowvii generation as a result of brownfield investments, continuous operational improvement efforts and steady cost control across the business. Over the last twelve months, the Company has generated more than $350 million in free cash flowvii and $895.7 million in adjusted EBITDAi.
While a majority of revenues continue to be derived from copper production, gold continues to represent more than 35% of total revenues. The unique copper and gold diversification is derived from copper and gold production in Peru, gold production from Manitoba and copper production contribution from British Columbia. The diversified and stable operating platform provides significant exposure to higher copper and gold prices. Using the mid-point of Hudbay's 2025 guidance ranges, a 10% increase in annual copper and gold prices would increase operating cash flow by $100 million and $56 million, respectively, as disclosed with Hudbay's 2025 guidance announcement in Februaryii.
During the first quarter of 2025, the Company invested $25.5 million in growth capital expenditures relating to advancing high-return brownfield mill initiatives and greenfield copper projects to drive near-term and long-term production growth. Hudbay's balance sheet is well positioned to continue to advance its several growth initiatives. Net debti of $526.1 million in the first quarter of 2025 remained consistent with the fourth quarter of 2024 and reflects the deleveraging efforts completed in 2024. Hudbay's net debt to adjusted EBITDA ratioi was 0.6x in the first quarter of 2025, in line with the fourth quarter of 2024 and significantly improved from 1.3x in the first quarter of 2024 because of successful deleveraging efforts throughout 2024.
Annual Reserve and Resource Update and Three-Year Production Guidance
Hudbay provided its annual mineral reserve and resource update and issued new three-year production guidance on March 27, 2025.
In Peru, current mineral reserve estimates total 517 million tonnes at 0.25% copper containing approximately 1.3 million tonnes of copper. In 2024, the Company increased mineral reserve estimates at Constancia to include the addition of a tenth mining phase in the Constancia pit after conducting positive geotechnical drilling and studies in 2023. This extended the expected mine life at Constancia by three years to 2041. Mining at the high-grade Pampacancha satellite pit commenced in 2021 and is expected to extend until early December 2025. The mine plan has smoothed Pampacancha production throughout 2025, resulting in total mill ore feed for 2025 from Pampacancha to be ~25%, lower than the typical one-third in prior years. Annual production at the Constancia operations is expected to average approximately 88,000iii tonnes of copper and 31,000iii ounces of gold over the next three years. This reflects steady copper production levels as higher mill throughput is expected to offset lower grades starting in 2026 after the depletion of Pampacancha in late 2025.
In Snow Lake, the current mineral reserve estimates a total of approximately 16 million tonnes with approximately 1.7 million ounces in contained gold and an expected mine life to 2037. Snow Lake’s life-of-mine production schedule has been optimized for higher mill throughput rates at New Britannia, maximizing gold production and cash flows. In 2024, record annual gold production of 214,225 ounces was achieved in Snow Lake through a combination of higher metallurgical recoveries at the New Britannia and Stall mills, despite processing lower gold grades year-over-year, and the strategic allocation of more gold ore feed to the New Britannia mill. Annual gold production from Snow Lake is expected to average more than 193,000iii ounces over the next three years. The impressive operating performance has resulted in 2025 gold production guidance being 8% higher than the previous 2025 guidance of 185,000iii ounces, and 2026 gold production guidance being 3% higher than the previous 2026 guidance of 185,000iii ounces. Similarly, the midpoint of the 2027 gold production guidance is 17% higher than the anticipated 2027 production in the most recent