TMX, NYSE – HBM 2023 No. 3 Hudbay Provides Annual Reserve and Resource Update
TMX, NYSE – HBM
2023 No. 3
Hudbay Provides Annual Reserve and Resource Update
• Annual copper production from Constancia is expected to average 110,000i tonnes over the next
three years, a 23% increase from 2022 levels.
• Annual gold production from Snow Lake is expected to average more than 190,000i ounces over the
next three years, a 30% increase from 2022 levels.
• Peru concentrate inventory levels at site have reached normal levels ahead of schedule after full
resumption of transportation activities.
• Mining of the higher -grade ore at Pampacancha is now expected in the second quarter of 2023,
ahead of schedule.
• Copper mineral resource estimates increase year -over-year with the incorporation of the positive
Copper World PEA and initial mineral resource estimate at Llaguen.
• Exploration activities in Peru are focused on ground geophysics and drill permitting for highly
prospective satellite properties while evaluating the potential for reserve expansion at Constancia
and Pampacancha through future mining phases.
• Exploration activities in Snow Lake are prioritizing step -out drilling for new discoveries to support
future growth with preliminary results indicating the alteration zone hosting the mineralized system
at Lalor continues down dip for two kilometres.
• De-risking activities at Copper World are focused on completing a pre -feasibility study in mid-2023
and obtaining state level permits.
• Recent geophysical surveys , which identify the potential for high -grade skarn and large porphyry
targets on private land claims near Mason , will be used to finalize a drill program to test these
targets in late 2023.
Toronto, Ontario, March 30, 2023 – Hudbay Minerals Inc. (“Hudbay” or the “company ”) (TSX, NYSE: HBM)
today released its annual mineral reserve and resource update and issued new three -year production guidance . All
amounts are in U.S. dollars, unless otherwise noted.
“Our greenfield exploration efforts successfully increased our copper mineral resources last year with the release of
our Copper World PEA and the initial resource estimate at Llaguen ,” said Peter Kukielski, Hudbay’s President and
Chief Executive Officer. “ Our 2023 exploration program is focused on high -potential opportunities to expand
mineralization near our operations in Peru and Manitoba to position us for additional long -term reserves growth. We
already have long lives at our existing operations, and we expect to add to our robust production outlook by
leveraging our proven track record of delivering value through exploration and development as we advance our
quality pipeline of growth assets.”
TMX, NYSE – HBM
2023 No. 3
2
Constancia Operations
Current mineral reserve estimates total 492 million tonnes at 0.3 0% copper with approximately 1.5 million tonnes of
contained copper. Constancia’s expected mine life has been maintained and extends until 2038. The copper
contained in measured and indicated mineral resources has increased in 202 3 due to infill drilling success in
converting inferred mineral resources.
Hudbay released an updated mine plan for Constancia in 2021 that reflect ed an increase in copper and gold
production as the higher grades fro m the Pampacancha deposit were expected to enter the mine plan over the 2022
to 2024 period. The mine plan also incorporated higher-grade reserves from the Constancia Norte pit extension . In
late 2022 and early 2023, regional road blockades in Peru limited the ability to transport fuel and concentrate, but the
Constancia mill continued to steadily operate as the company implemented risk mitigation plans with strong support
from the local co mmunities. As a result of processing stockpiles to lower fuel consumption in early 2023,
Pampacancha’s mine life has now been extended into the first half of 2025. Annual production at the Constancia
operations is expected to average approximately 110,000i tonnes of copper and 87,000i ounces of gold over the next
three years, a respective 23% and 49% increase from 2022 levels.
In 2021, Hudbay also completed an internal scoping study which resulted in an inferred mineral resource estimate of
6.5 million tonnes at 1.2% copper in two high grade skarn lenses located below the open pit in the Constancia Norte
area. The study concluded these two lenses could be mined by underground methods starting in 2029 t o supplement
the open pit production.
Current mineral reserves and resources (exclusive of reserves) for Constancia and Pampacancha as of January 1,
2023 are summarized below.
TMX, NYSE – HBM
2023 No. 3
3
Constancia Operations
Mineral Reserve and Resource Estimates1,2,3,4 Tonnes Cu Grade
(%)
Mo Grade
(g/t)
Au Grade
(g/t)
Ag Grade
(g/t)
Constancia Reserves
Proven 411,200,000 0.28 79 0.041 2.85
Probable 46,500,000 0.23 79 0.038 2.84
Total Proven and Probable - Constancia 457,700,000 0.28 79 0.040 2.85
Pampacancha Reserves
Proven 34,100,000 0.59 153 0.320 4.98
Probable 300,000 0.17 306 0.119 2.29
Total Proven and Probable - Pampacancha 34,400,000 0.59 155 0.319 4.96
Total Proven and Probable 492,100,000 0.30 85 0.060 2.99
Constancia Resources
Measured 118,400,000 0.20 62 0.036 1.86
Indicated 140,700,000 0.23 73 0.040 2.20
Inferred – Open Pit 56,700,000 0.27 82 0.044 1.86
Inferred – Underground 6,500,000 1.20 69 0.137 8.62
Pampacancha Resources
Measured 9,100,000 0.35 103 0.230 6.01
Indicated 300,000 0.16 173 0.173 2.62
Inferred 900,000 0.15 118 0.103 2.86
Total Measured and Indicated 268,500,000 0.22 69 0.045 2.18
Total Inferred 64,100,000 0.36 81 0.054 2.56
Note: totals may not add up correctly due to rounding.
1 Mineral resources are exclusive of mineral reserves and do not have demonstrated economic viability.
2 Mineral resources are based on resource pit design and do not include factors for mining recovery or dilution.
3 The open pit mineral reserves and resources are estimated using a minimum NSR cut-off of $6.40 per tonne and assuming
metallurgical recoveries (applied by ore type) of 86% for copper on average for the life of mine, while the underground inferred
resources at Constancia Norte are based on a 0.65% copper cut-off grade.
4 Long-term metal prices of $3.60 per pound copper, $12.00 per pound molybdenum, $1,650 per ounce gold, and $22.00 per ounce
silver were used to estimate mineral reserves and resources.
Constancia and Pampacancha In-Mine Exploration
A drill program is underway at the Pampacancha deposit to test the potential to add an incremental phase to the
reserve pit at depth. The company is also planning a limited drill program and technical evaluations at the Constancia
deposit to confirm the economic viability of adding an additional mining phase to the current mine plan that would
convert a portion of the mineral resources to mineral reserve s. The results from these drill programs and technical
and economic evaluations are expected to be incorporated in the next annual mineral reserve and resource update.
TMX, NYSE – HBM
2023 No. 3
4
Maria Reyna and Caballito Exploration
Hudbay controls a large, contiguous block of mineral rights with the potential to host mineral deposits within trucking
distance of the Constancia processing facility, including the past producing Caballito property and the highly
prospective Maria Reyna property. The company commenced early exploration activities and ground geophysical
surveys at Maria Reyna and Caballito after completing a surface rights exploration agreement with the community of
Uchucarcco in August 2022. S urface investigation activities toge ther with baseline environmental and archaeological
activities necessary to support drill permit applications have been completed. Drill permit applications are expected to
be submitted in May. Ground activities and geophysical surveys are underway and field evidence confirms that both
Caballito and Maria Reyna host sulfide and oxide rich copper mineralization in skarns, hydrothermal breccias and
large porphyry intrusive bodies.
Peru Logistics and Mining Activities Normalized
Social unrest and road blockades in Peru, following a change in the country’s political leadership in December 2022 ,
have continued to abate since mid-February 2023. Transportation of Constancia’s concentrate and critical supplies
has now returned to normal. As a result, Hudbay has significantly decreased the level of concentrate inventories at
site to less than 7,000 wet metric tonnes as of the end of March from a peak of 47,000 wet metric tonnes in mid -
February. Hudbay has been able to complete several port shipments in March a nd expects to reach normal
concentrate inventory levels at the port in April, ahead of schedule.
In addition, full mining activities resumed in the Pampacancha pit in February and the period of higher stripping from
March to June is progressing well with mining of higher-grade ore now expected in the second quarter of 2023 ,
slightly ahead of schedule.
Snow Lake Operations
Current mineral reserve estimates in Snow Lake total 18 million tonnes with approximately 2.1 million ounces in
contained gold, and the expected mine life of the Snow Lake operations has been maintained and extends until 2038.
With the Snow Lake operations achieving higher production levels after the full ramp -up of the New Britannia mill in
2022 and the transit ion of the Flin Flon workforce and equipment to the Lalor mine , exploration activities are now
prioritizing step-out drilling to identify opportunities for meaningful additions to the mineral resource base to support
future growth.
Exploration efforts in 2022 focused on increasing inferred gold resources at the 1901 deposit , which offset converted
inferred mineral resources at Lalor. As a result, total gold contained in inferred resources was unchanged at 1.7
million ounces. This ind icates a potential to maintain strong production level s beyond 2030 and further extend the
mine life in Snow Lake.
Hudbay has been executing a multi -phased gold strategy in Snow Lake since 2019, which has resulted in increased
annual gold production from optimization initiatives, including higher processing capacity and gold recoveries since
the start-up of the New Britannia mill in late 2021. As a result, annual gold production from Snow Lake increased to
146,233 ounces in 2022, New Britannia’s first full year of production, representing a 110% increase from 69,657
ounces in 2020. The New Britannia mill consistently achieved its nameplate capacity of 1,500 tonnes per day
throughout 2022 and is expected to operate at 1,650 tonnes per day in 2023 with the opportunity to further exceed
targeted levels in the future . Annual gold product ion from Snow Lake is expected to average more than 190,000i
ounces over the next three years, which represents a further increase of 30% from 2022 levels.
TMX, NYSE – HBM
2023 No. 3
5
There are several opportunities to enhance the Snow Lake operations through exploration upside and mill processing
projects. The Stall mill recovery improvement program is currently well -advanced and is expected to result in higher
gold and copper recoveries starting in the second quarter of 2023 . Hudbay has also completed an internal pre -
feasibility study on a second phase of the Stall mill recovery improvement program which demonstrates the potential
for a further increase in gold recoveries at Stall starting in 2025 by producing a lead concentra te through gravity
separation.
The Lalor mine continues to advance several key initiatives to increase efficiency and support higher production
levels beyond the current 4,650 tonnes per day, including building long -hole inventory, improving stope muck
fragmentation and optimizing the development drift size. The company is also focused on maximizing production from
the shaft to enable more ore to be hoisted to surface while reducing inefficient trucking of ore via the ramp , which is
expected to lower operating costs and greenhouse gas emissions.
TMX, NYSE – HBM
2023 No. 3
6
Current mineral reserves and resources (exclusive of reserves) for Lalor , 1901 and other Snow Lake satellite
deposits as of January 1, 2023 are summarized below.
Lalor Mine and 1901 Deposit
Mineral Reserve and Resource
Estimates1,2,3,4,5,6,7
Tonnes
Au Grade
(g/t)
Zn Grade
(%)
Cu Grade
(%)
Ag Grade
(g/t)
Base Metal Zone Reserves
Proven – Lalor 5,977,000 2.5 5.17 0.42 28.7
Proven – 1901 1,278,000 2.2 8.14 0.30 27.4
Probable – Lalor 522,000 2.6 4.59 0.36 30.3
Probable – 1901 245,000 0.8 10.7 0.30 25.2
Total Proven and Probable - Base Metal 8,022,000 2.5 5.77 0.39 28.5
Gold Zone Reserves
Proven – Lalor 3,345,000 5.1 0.77 0.54 29.2
Proven – 1901 101,000 2.9 1.32 1.00 19.2
Probable – Lalor 3,779,000 5.5 0.41 1.12 25.6
Probable – 1901 54,000 1.7 0.45 1.82 5.6
Total Proven and Probable - Gold 7,279,000 5.3 0.59 0.86 27.0
Total Proven and Probable (Base Metal and
Gold) 15,303,000 3.8 3.31 0.61 27.8
Base Metal Zone Resources
Inferred – Lalor 1,947,000 1.7 5.56 0.34 32.0
Inferred – 1901 312,000 1.5 5.86 0.19 32.0
Total Inferred - Base Metal 2,259,000 1.7 5.60 0.32 32.0
Gold Zone Resources
Inferred – Lalor 3,764,000 5.0 0.27 1.68 26.4
Inferred – 1901 1,599,000 5.5 0.30 0.85 16.5
Total Inferred - Gold 5,363,000 5.1 0.28 1.43 23.5
Total Inferred (Base Metal and Gold) 7,622,000 4.1 1.86 1.10 26.0
Note: totals may not add up correctly due to rounding.
1 Mineral resources are exclusive of mineral reserves and do not have demonstrated economic viability.
2 Mineral resources do not include factors for mining recovery or dilution.
3 Base metal mineral resources are estimated based on the assumption that they would be processed at the Stall concentrator while
gold mineral resources are estimated based on the assumption that they would be processed at the New Britannia concentrator.
4 Long-term metal prices of $1.20 per pound zinc, $1,650 per ounce gold, $3.60 per pound copper, and $22.00 per ounce silver with
an exchange rate of 1.33 C$/US$ were used to estimate mineral reserves and resources.
5 Lalor mineral reserves and resources are estimated using NSR cut-off ranging from C$137 to C$168 per tonne assuming a long
hole mining method and depending on the mill destination.
6 Individual stope gold grades at Lalor were capped at 10 grams per tonne as a prudent estimate until reserves-to-mill reconciliations
can be developed to support the recovery of higher-grade gold. This capping method resulted in an approximate 3% reduction in the
overall gold reserve grade at Lalor.
7 1901 mineral reserves and resources are estimated using a minimum NSR cut-off of C$166 per tonne assuming the material is
mined via post pillar cut-and-fill methods and is processed at the Stall mill.
TMX, NYSE – HBM
2023 No. 3
7
Snow Lake Regional Deposits - Gold
Mineral Reserve and Resource
Estimates1,2,3,4,5,6,7,8
Tonnes
Au Grade
(g/t)
Zn Grade
(%)
Cu Grade
(%)
Ag Grade
(g/t)
Probable Reserves
WIM 2,450,000 1.6 0.25 1.63 6.3
3 Zone 660,000 4.2 - - -
Total Probable (Gold) 3,110,000 2.2 0.20 1.28 5.0
Inferred Resources
New Britannia 2,750,000 4.5 - - -
Birch 570,000 4.4 - - -
Total Inferred (Gold) 3,320,000 4.5 - - -
Note: totals may not add up correctly due to rounding.
1 Mineral resources are exclusive of mineral reserves and do not have demonstrated economic viability.
2 Mineral resources do not include factors for mining recovery or dilution.
3 Gold mineral resources are estimated based on the assumption that they would be processed at the New Britannia concentrator.
4 Long-term metal prices of $1.15 per pound zinc, $1,500 per ounce gold, $3.45 per pound copper, and $20.00 per ounce silver with
an exchange rate of 1.30 C$/US$ were used to confirm the economic viability of the mineral reserve estimates.
5 WIM mineral reserves are estimated using a minimum NSR cut-off of C$150 per tonne, assuming processing recoveries of 98% for
copper, 88% for gold and 70% for silver based on processing through New Britannia mill's flotation and tails leach circuits.
6 3 Zone mineral reserves are estimated using a minimum NSR cut-off of C$150 per tonne, assuming processing recoveries of 85%
for gold based on processing through New Britannia mill's leach circuit.
7 New Britannia mineral resource estimates have been reported at a minimum true width of 1.5 metres and with a cut-off grade
varying from 2 grams per tonne (at the lower part of New Britannia) to 3.5 grams per tonne (at the upper part of New Britannia).
8 Mineral reserves and resources were initially estimated using metal price assumptions that vary marginally over the assumptions
used to estimate mineral reserves at Lalor. In the Qualified Person’s opinion, the combined impact of these small variations does not
have any impact on the mineral reserve and resource estimates.
Snow Lake Regional Deposits – Base Metal
Mineral Reserve and Resource
Estimates1,2,3,4,5,6,7
Tonnes
Au Grade
(g/t)
Zn Grade
(%)
Cu Grade
(%)
Ag Grade
(g/t)
Indicated Resources
Pen II 470,000 0.3 8.89 0.49 6.8
Talbot 2,190,000 2.1 1.79 2.33 36.0
Total Indicated (Base Metals) 2,660,000 1.8 3.04 2.01 30.9
Inferred Resources
Watts 3,150,000 1.0 2.58 2.34 31.0
Pen II 130,000 0.3 9.81 0.37 6.8
Talbot 2,450,000 1.9 1.74 1.13 25.8
Total Inferred (Base Metals) 5,730,000 1.3 2.39 1.78 28.3
Note: totals may not add up correctly due to rounding.
1 Mineral resources are exclusive of mineral reserves and do not have demonstrated economic viability.
2 Mineral resources do not include factors for mining recovery or dilution.
3 Base metal mineral resources are estimated based on the assumption that they would be processed at the Stall concentrator.
4 Watts mineral resources are estimated using a minimum NSR cut-off of C$150 per tonne, assuming processing recoveries of 90%
for copper, 80% for zinc, 70% for gold and 70% for silver.
5 Pen II mineral resources are estimated using a minimum NSR cut-off of C$75 per tonne.
6 Watts and Pen II mineral resources were initially estimated using metal price assumptions that vary marginally over the
assumptions used to estimate mineral resources at Lalor. In the Qualified Person’s opinion, the combined impact of these small
variations does not have any impact on the mineral resource estimates.
7 Includes 100% of the Talbot mineral resources reported by Rockcliff Metals Corp. in its 2020 NI 43-101 technical report published
on SEDAR. Hudbay currently owns a 51% interest in the Talbot project.
TMX, NYSE – HBM
2023 No. 3
8
Lalor Near-Mine Exploration
Hudbay commenced a winter drill program in January 2023 with four drill rigs testing the down -dip gold and copper
extensions of the Lalor deposit, in the first step-out drilling in the deeper zones at Lalor since the initial discovery of
the gold and copper-gold zones in 2009 and 2010. A total of eight widely spaced drill holes have been planned to test
the down dip extension of Lalor over a two kilometre by one kilometre area during the 2023 winter drilling season , as
shown in Figure 1 . Four of these holes have been completed to-date and all holes have intersected the alteration
zone that hosts the Lalor mineralization, with two holes intersecting copper bearing sulfides identified from core
logging. These results confirm that the alteration zone hosting the mineralization mined at Lalor continues down dip
for two kilometres from its existing known extent . Once the 2023 d rilling program is completed, all holes will be
assayed and probed to guide the next campaign of exploration.
One additional drill rig is testing a geophysical anomaly located within 400 metres of existing Lalor underground
infrastructure. Four drill holes have been completed during the winter drill program and assay results from base metal
and copper-gold mineralized intercepts identified from core logging are pending.
3-Year Production Outlook
The consolidate d copper and gold production guidance demonstrates the continued growth from the company’s
brownfield investments in Peru and Manitoba. Consolidated copper production over the next three years is expected
to increase to 114,000i tonnes, 130,500i tonnes and 116,000i tonnes, respectively, which represents an increase of
9%, 25% and 11%, respectively, from 202 2 levels. Consolidated gold production over the next three years is
expected to increase to 285,500i ounces, 296,500i ounces and 258,500i ounces, respectively, which represents an
increase of 30%, 35% and 18%, respectively, from 2022 levels.
Peru’s three-year production guidance reflects higher copper and gold grades from Pampacancha into the first half of
2025. The mine plan has been re -sequenced to reflect the impacts in early 2023, as noted previously , resulting in
higher copper and gold production from Pampacancha continuing into 2025. This is expected to lead to a n 18%i and
109%i increase in copper and gold production, respectively, in 2025 compared to the mine plan issued in 2021.
Manitoba’s three -year production guidance reflects higher throughput at the Lalor mine and the New Britannia mill
starting in 2023 , as well as positive impact s from the first phase of the Stall mill recovery improvement program
beginning in the second quarter of 2023 . Gold production in 2025 also reflects preliminary expected impacts from the
second phase of the Stall mill recovery improvement program.