TSX, NYSE – HBM 2018 No. 6 Hudbay Announces Updated Technical Report for Constancia and Provides Annual Reserve and Resource Update
TSX, NYSE – HBM
2018 No. 6
Hudbay Announces Updated Technical Report for Constancia and Provides
Annual Reserve and Resource Update
Toronto, Ontario, March 29, 2018 – Hudbay Minerals Inc. (“Hudbay ” or the “company”) (TSX, NYSE:HBM)
announced that it has filed an updated National Instrument 43-101 technical report in respect of its 100% owned
Constancia mine in Peru (the “2018 Technical Report”). The 2018 Technical Report includes updates to the mineral
reserves and resources and mine plan, including anticipated throughput, recoveries and capital and operating costs
for the remaining life of mine at Constancia. The company has also provided its annual mineral reserve and resource
update for its producing properties. All dollar amounts are in US dollars, unless otherwise noted.
Summary:
• Twin hole drilling in the Constancia pit has confirmed the existence of a sampling bias in the supergene
mineralization, which once corrected and combined with an update of the resource model of the deposit can
explain the persistent positive copper grade bias that has been experienced since the commencement of
mining at Constancia and the metallurgical recoveries achieved to date
• The mine plan contemplates average annual production of 105,000 tonnes of copper in concentrate over the
next five years (2019- 2023) at an average cash cost, net of by-product credits, of $1.09 per pound of
copper, and an average sustaining cash cost, net of by -product credits, of $1.38 per pound of copper
(including the impact of capitalized stripping and the precious metal stream agreement with Wheaton
Precious Metals)1
• Compared to the company’s previous technical report on Constancia, which was filed in 2016, anticipated
copper production will increase by 25% in years 2022 through 2025
• Forecast life-of-mine (“LOM”)2 average copper recoveries of 86 %, with approximately $35 million of capital
spending planned for 2019 to support enhancements in recoveries, alongside ongoing work to optimize
process recoveries
• Mining of Pampacancha is now scheduled to begin in 2019
• Permitting and community relations work is ongoing to support exploration work on the Caballito, Maria
Reyna and Kusiorcco properties near Constancia that Hudbay announced the acquisition of in January 2018
1 Cash cost and all-in sustaining cash cost, net of by-product credits per pound of copper are not recognized under IFRS. By-product
credits are calculated using reserve prices of $11.00 per pound molybdenum, $18.00 per ounce silver, $1,260 per ounce gold and
include the impact of the precious metals streams and capitalized stripping. Sustaining cash cost excludes Pampacancha project
capital. For a detailed description of each of these non- IFRS financial performance measures, please see the discussion under
"Non-IFRS Financial Performance Measures" on page 6 of this news release.
2 Life-of-mine average calculated from 2018-2036.
TSX, NYSE – HBM
2018 No. 5
Constancia Mine
A summary of the updated mine plan is shown below.
Units 2019E 2020E 2021E 2022E 2023E 5 Year
Average
LOM
Average1
Mine Plan Summary
Ore mined million tonnes 37.7 34.0 27.6 28.6 33.6
32.3 30.8
Waste mined million tonnes 32.5 32.0 38.1 39.5 35.4
35.5 33.7
Strip ratio waste:ore 0.9 0.9 1.4 1.4 1.1
1.1 1.1
Ore milled million tonnes 31.3 31.2 31.1 31.1 31.2
31.2 31.0
Copper grade milled % Cu 0.41% 0.39% 0.39% 0.39% 0.39%
0.40% 0.32%
Copper recovery % Cu 84.6% 85.9% 86.0% 86.1% 85.7%
85.7% 86.0%
Copper concentrate produced thousand dry metric
tonnes 433 408 390 393 401 405 338
Molybdenum concentrate
produced
thousand dry metric
tonnes 1.4 4.5 5.3 2.8 3.3 3.5 2.2
Copper production2 thousand tonnes 109 106 105 105 103
105 84
Molybdenum production2 thousand tonnes 0.7 2.2 2.7 1.4 1.6
1.7 1.1
Gold production2 thousand oz 39 78 84 91 57
70 34
Silver production2 thousand oz 2,492 2,074 2,483 2,500 2,663
2,442 2,102
Total on-site costs (excluding
impact of capitalized stripping)3 $/t milled $8.67 $8.82 $8.78 $8.68 $8.70
$8.73 $8.48
Total on-site costs (including
impact of capitalized stripping)3 $/t milled $8.41 $8.34 $8.11 $8.34 $7.98
$8.24 $7.96
Cash Cost4
Cash cost $/lb Cu $1.29 $1.05 $0.94 $1.06 $1.12
$1.09 $1.44
Sustaining cash cost $/lb Cu $1.66 $1.44 $1.11 $1.22 $1.45
$1.38 $1.75
Capital Expenditures
Sustaining capital $ million $80 $75 $15 $25 $52
$49 $41
Capitalized stripping $ million $8 $15 $21 $10 $22 $15 $16
Total sustaining capital
(including capitalized stripping) $ million $88 $90 $36 $35 $74
$65 $57
Pampacancha capital $ million $42 $1 $1 $0 $0
$9 -
Totals may not add up correctly due to rounding.
1 Life-of-mine average calculated from 2018-2036.
2 Production refers to contained metal in concentrate.
3 On-site costs include mining, milling and G&A costs.
4 Cash cost and sustaining cash cost are reported net of by -product credits, are calculated at reserve prices ( $3.00 per pound
copper, $11.00 per pound molybdenum, $18.00 per ounce silver, $1,260 per ounce gold) and include the impact of the precious
metals stream and capitalized stripping. Cash cost includes on-site and off-site costs, and sustaining cash cost includes the addition
of royalties and sustaining capital, but excludes Pampacancha project capital.
A comparison of anticipated copper production between the 2018 Technical Report and the previous 2016 technical
report for years 2018 through 2025 and LOM average is below.
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2018 No. 5
Copper production1
(thousand tonnes)
2018E 2019E 2020E 2021E 2022E 2023E 2024E 2025E LOM
Average2
2016 Technical Report 104 118 107 113 74 81 77 73 81
2018 Technical Report 108 109 106 105 105 103 85 89 84
1 Production refers to contained metal in concentrate.
2 Life-of-mine average calculated from 2018-2035 for the 2016 technical report and from 2018-2036 for the 2018 Technical Report.
Hudbay completed a twin hole drill program in the fourth quarter of 2017 that confirmed the extent of the positive
grade bias that has existed since the commencement of production at Constancia. The company also constructed a
new resource model that formed the basis for a new mine plan and technical report for Constancia. The 2018
Technical Report includes an updated mine plan showing an increase to the total metal contained in the estimated
mineral reserves. The new mine plan also reflects updated throughput, recoveries and capital and operating cost
assumptions for the remaining life of mine at Constancia.
The 2018 Technical Report assumes that mining of the high -grade Pampacancha satellite deposit will commence in
2019, which is one year later than contemplated by the previous technical report. Although negotiations to secure
surface rights over the Pampacancha deposit continue to progress and Hudbay has been granted access to the land
to carry out early -works activities, the company anticipates a one year delay to mining at Pampacancha. In the
interim, the company will continue to mine higher-grade ore from the main Constancia pit.
Current mineral reserves and resources for Constancia as of January 1, 2018 are summarized below.
Constancia Mine
Mineral Reserve and Resource Estimates Tonnes Cu Grade
(%)
Mo Grade
(g/t)
Au Grade
(g/t)
Ag Grade
(g/t)
Constancia Reserves1
Proven
455,900,000 0.30 96 0.035 2.93
Probable
72,800,000 0.23 72 0.035 3.09
Total proven and probable - Constancia 528,700,000 0.29 93 0.035 2.95
Pampacancha Reserves1
Proven
32,400,000 0.59 178 0.368 4.48
Probable
7,500,000 0.62 173 0.325 5.75
Total proven and probable - Pampacancha
39,900,000 0.60 177 0.360 4.72
Total proven and probable 568,600,000 0.32 99 0.058 3.07
Constancia Resources2
Measured 175,000,000 0.20 51 0.028 2.19
Indicated 180,900,000 0.20 56 0.033 2.09
Inferred 54,100,000 0.24 43 0.018 1.71
Pampacancha Resources2
Measured 11,400,000 0.41 101 0.245 4.95
Indicated 6,000,000 0.35 84 0.285 5.16
Inferred 10,100,000 0.14 143 0.233 3.86
Total measured and indicated 373,300,000 0.21 56 0.041 2.28
Total inferred 64,100,000 0.22 59 0.052 2.05
Note: totals may not add up correctly due to rounding.
1 Mineral reserves calculated using metal prices of $3.00 per pound copper, $11.00 per pound molybdenum, $18.00 per ounce
silver, and $1,260 per ounce gold.
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2018 No. 5
2 Mineral resources are exclusive of mineral reserves. Mineral resources calculated using metal prices of $3.00 per pound copper,
$11.00 per pound molybdenum, $18.00 per ounce silver, and $1,260 per ounce gold.
In January 2018, Hudbay announced the entering into of the following agreements to acquire mining properties in
southern Peru near its Constancia mine: (i) an option agreement with a private Peruvian consortium to earn a 100%
interest in the Caballito (formerly Katanga) and Maria Reyna mining properties; and (ii) an agreement to acquire from
Panoro Minerals Ltd. 100% of the Kusiorcco mining properties.
The Caballito property, located approximately three kilometers northwest of Constancia, is a 120-hectare (297-acre)
concession block and is the site of the former Katanga mine, which was operated by Mitsu i Mining & Smelting Co.,
Ltd. and Minera Katanga at different times between the late 1970s and early 1990s. The deposit at Caballito consists
of narrow skarn bodies developed in the contact between limestone and monzonite porphyries with copper, silver and
gold mineralization in hypogene sulfides. Reliable available data over this area is limited to aeromagnetic and
radiometric maps.
The Maria Reyna property, located within ten kilometers of Constancia, is a 5,850-hectare (14,456-acre) concession
block. In 2010, diamond drilling by a previous optionee of the Maria R eyna property, intersected copper skarn,
breccias and porphyry mineralization. Geophysical surveys and geological mapping have also been conducted on the
property and Hudbay believes that the area remains very prospective for additional discoveries.
A summary of the historic drill results from Maria Reyna is contained in the table below, however a qualified person
has not independently verified this historical data or the quality assurance and quality control program that was
applied during the execut ion of this drill program for Hudbay and, as such, Hudbay cautions that this information
should not be relied upon by investors.
Vale Drill Intersections at 0.2% CuEq1 Cut-off
Hole ID From (m) To (m) Ag (ppm) Cu (%) Mo (ppm) CuEq % Interval
(m)
DH-001 206 256 1.5 0.20 113 0.27 50
DH-002 0 136 4.1 0.52 78 0.61 136
DH-003 226 256 1.7 0.24 122 0.31 30
460 480 0.3 0.19 62 0.22 20
DH-004 10 240 3.0 0.26 124 0.35 230
336 486 1.5 0.18 147 0.27 150
502 522 0.8 0.19 87 0.24 20
DH-005 10 76 4.8 0.63 122 0.74 66
DH-006 0 114 4.0 0.32 112 0.41 114
DH-007 0 106 2.5 0.39 267 0.55 106
176 216 1.7 0.25 280 0.41 40
232 310 1.0 0.17 272 0.31 78
DH-008 256 394 1.4 0.28 130 0.36 138
432 519.85 1.7 0.23 209 0.36 87.85
DH-009 18 90 1.7 0.28 335 0.47 72
110 172 0.7 0.14 184 0.24 62
196 256 0.9 0.18 106 0.24 60
DH-010 262 314 1.7 0.30 204 0.42 52
344 406 2.1 0.34 641 0.68 62
DH-011 18 178 2.9 0.50 998 1.03 160
374 406 1.1 0.14 175 0.24 32
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Note: The intersections represent core length and are not representative of the width of the possible mineralised zone.
Note: For additional information, including drill hole locations and the data verification and quality assurance / quality control carried
out by the prior owner, please refer to Management’s Discussion and Analysis for Indico Resources Ltd. (“Indico”) for the year
ended May 31, 2014, as filed by Indico on SEDAR on September 29, 2014.
1 Intervals were calculated with maximum of 10m of 0.1% CuEq internal dilution, 0.2% CuEq edge grade, minimum length of 15m.
For CuEq calculations the following variables were used: $3.00/lb Cu, $15.00/lb Mo, $21.00/oz Ag; no allowances for metallurgical
recoveries were made.
The Kusiorcco property, located within seven kilometers of Constancia, is a 3,962-hectare (9,790- acre) concession
block nearby the Caballito and Maria Reyna properties.
Permitting and community relations work is ongoing to support exploration work on the Caballito, Maria Reyna and
Kusiorcco properties.
Lalor Mine
A decline to access the copper-gold zone at Lalor commenced in January 2018 and additional detailed technical work
is underway to optimize the mine plan. Test mining of the gold zone began in February 2018, which will enable a
better understanding of the gold zone characteristics and better inform the ev aluation of options for processing Lalor
gold in the future. The gold ore is currently being shipped to Flin Flon for processing.
Current mineral reserves and resources , exclusive of reserves, for Lalor as of January 1, 2018 are summarized
below.
Lalor Mine
Mineral Reserve and Resource Estimates Tonnes Cu Grade
(%)
Zn Grade
(%)
Au Grade
(g/t)
Ag Grade
(g/t)
Lalor Reserves1
Proven
3,511,000 0.73 6.21 2.37 27.18
Probable
9,484,000 0.65 4.31 2.72 26.03
Total proven and probable 12,995,000 0.67 4.83 2.62 26.33
Lalor Resources – Base Metal Zone2
Indicated 2,100,000 0.49 5.34 1.69 28.10
Inferred 545,000 0.32 8.15 1.45 22.28
Lalor Resources – Gold Zone2
Indicated 1,750,000 0.34 0.40 5.18 30.61
Inferred 4,121,000 0.90 0.31 5.02 27.61
Note: totals may not add up correctly due to rounding.
1 Mineral reserves calculated using metal prices of $1.07 per pound zinc (includes premium), $1,260 per ounce gold, $3.00 per
pound copper and $18.00 per ounce of silver, and using a CAD/USD exchange rate of 1.10.
2 Mineral resources calculated using metal prices of $1.19 per pound zinc (includes premium), $1,300 per ounce gold, $18.00 per
ounce of silver and $2.67 per pound copper.
777 and Reed Mines
Current mineral reserves and resources for 777 and mineral reserves for Reed as of January 1, 2018 are
summarized below.
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2018 No. 5
777 Mine
Mineral Reserve and Resource Estimates1 Tonnes Cu Grade
(%)
Zn Grade
(%)
Au Grade
(g/t)
Ag Grade
(g/t)
Mineral Reserves
Proven
2,625,000 1.78 4.20 1.70 25.97
Probable
1,251,000 1.11 4.33 1.82 25.41
Total proven and probable
3,876,000 1.56 4.24 1.73 25.79
Mineral Resources2
Indicated 736,000 0.99 3.53 1.82 26.24
Inferred
673,000 1.01 4.26 1.72 30.95
Note: totals may not add up correctly due to rounding.
1 Mineral reserves and resources calculated using metal prices of $2.67 per pound copper, $1.24 per pound zinc (includes
premium), $1,300 per ounce gold, and $18.00 per ounce silver, and using a CAD/USD exchange rate of 1.25.
2 Mineral resources are exclusive of mineral reserves.
Reed Mine
Mineral Reserve Estimates1 Tonnes Cu Grade
(%)
Zn Grade
(%)
Au Grade
(g/t)
Ag Grade
(g/t)
Mineral Reserves
Proven
67,000 2.91 1.16 0.47 7.78
Probable
209,000 3.31 0.40 0.74 6.72
Total proven and probable
276,000 3.21 0.58 0.67 6.98
Note: totals may not add up correctly due to rounding.
1 Mineral reserves calculated using metal prices of $2.50 per pound copper, $1.22 per pound zinc (includes premium), $1,300 per
ounce gold, and $18.00 per ounce silver, and using a CAD/USD exchange rate of 1.28.
The closure of the Reed mine is expected in the third quarter of 2018. The focus for the 777 mine is maximizing value
as the mine approaches the end of its life.
For additional detail on the Constancia mine , refer to the 2018 Technical Report, which is available under Hudbay’s
profile on SEDAR at www.sedar.com and will be filed on EDGAR at www.sec.gov. Additional detail on the Lalor ,
Rosemont, 777 and Reed properties, including a year -over-year reconciliation of reserves and resources for all
properties, is included in Hudbay's Annual Information Form for the year ended December 31, 2017, which is
available on SEDAR at www.sedar.com and will be filed on EDGAR at www.sec.gov.
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 ant icipated performance of its operations, including the
margin generated by the operations and the company. 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 3 9 of Hudbay’s management’s discussion and analysis for the
three months and year ended December 31, 2017 available on SEDAR at www.sedar.com and EDGAR at
www.sec.gov.
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2018 No. 5
Qualified Person
The scientific and technical information contained in this news release related to the Constancia mine and
surrounding exploration properties has been approved by Cashel Meagher, P.Geo., our Senior Vice President and
Chief Operating Officer. The scientific and technical information related to all other sites and projects contained in this
news release has been approved by Robert Carter, P.Eng., our General Manager Mining Operations, Manitoba
Business Unit. Messrs. Meagher and Carter 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, 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 refer to the 2018 Technical Report as filed by Hudbay on SEDAR at www.sedar.com.
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.
Information concerning the Constancia mine has been prepared in accordance with the requirements of Canadian
securities laws, which differ in material respects from the require ments of the Securities and Exchange Commission
(the “SEC”) set forth in Industry Guide 7. Under the SEC’s Industry Guide 7, mineralization may not be classified as a
“reserve” unless the determination has been made that the mineralization could be economi cally and legally
produced or extracted at the time of the reserve determination, and the SEC does not recognize the reporting of
mineral deposits which do not meet the SEC Industry Guide 7 definition of “Reserve”.
In accordance with National Instrument 43- 101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) of the
Canadian Securities Administrators, the terms “mineral reserve”, “proven mineral reserve”, “probable mineral
reserve”, “mineral resource”, “measured mineral resource”, “indicated mi neral resource” and “inferred mineral
resource” are defined in the Canadian Institute of Mining, Metallurgy and Petroleum (the “CIM”) Definition Standards
for Mineral Resources and Mineral Reserves adopted by the CIM Council on May 10, 2014. While the term s “mineral
resource”, “measured mineral resource”, “indicated mineral resource” and “inferred mineral resource” are recognized
and required by NI 43-101, the SEC does not recognize them. You are cautioned that, except for that portion of
mineral resources classified as mineral reserves, mineral resources do not have demonstrated economic value.
Inferred mineral resources have a high degree of uncertainty as to their existence and as to whether they can be
economically or legally mined. It cannot be assumed that all or any part of an inferred mineral resource will ever be
upgraded to a higher category. Therefore, you are cautioned not to assume that all or any part of an inferred mineral
resource exists, that it can be economically or legally mined, or that i t will ever be upgraded to a higher category.
Likewise, you are cautioned not to assume that all or any part of measured or indicated mineral resources will ever be
upgraded into mineral reserves.
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.
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Forward-looking information includes, but is not limited to, production, cost and capital expenditure forecasts, the
timing, cost and schedule for the acquisition of Pampacancha surface rights and the development of the
Pampacancha deposit, reserve and resource estimates and the other information included in the table entitled “Mine
Plan Summary ”, prospective information with respect to the newly acquired exploration properties surrounding
Constancia, anticipated production and recoveries from the gold zones at Lalor and potential processing solutions, as
well as statements related to, among other things, Hudbay’s objectives, s trategies, and intentions and its future
financial and operating performance. 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, es timates and
analyses that, while considered reasonable by us 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 Hudbay in drawing conclusions or making
forecasts or projections set out in the forward-looking information include, but are not limited to, the execution of
Hudbay’s business and growth strategies, including the success of its strategic investments and initiatives; the
availability and performance of Hudbay’s processing facilities; the acquisition of the surface rights required to start
mining the Pampacancha deposit; the timing and costs of the closure of the Reed mine; the availability of additional
financing, if needed; the ability to complete project targets on time and on budget and other events that may affect
Hudbay’s ability to develop its projects; and no significant and continuing adverse changes in general economic or
social or political conditions or conditions in the financial markets.
The risks, uncertainties, contingencies an d 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), risks related to the schedule for mining at the Pampacancha deposit (including
the timing and cost of acquiring the required surface rights), risks related to accessing and carrying out exploration
work on the newly acquired exploration properties surrounding Constancia, risks related to political or social unrest or
change, risks in respect of aboriginal and community relations, rights and titl e claims, operational risks and hazards,
including unanticipated environmental, industrial and geological events and developments and the inability to insure
against all risks, failure of plant, equipment, processes, transportation and other infrastructure to operate as
anticipated, compliance with government and environmental regulations, including permitting requirements and anti -
bribery legislation, depletion of Hudbay’s reserves, volatile financial markets that may affect Hudbay’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 pot ential for variations in grade and recovery rates, uncertain costs of reclamation activities,
Hudbay’s ability to comply with its pension and other post -retirement obligations, Hudbay’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 Hudbay’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, the reader should not place undue reliance on forward-looking information. Hudbay does not assu me
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.
About Hudbay
Hudbay (TSX, NYSE: HBM) is an integrated mining company primarily producing copper concentrate (containing
copper, gold and silver) , zinc concentrate and zinc metal. With assets in North and South America, the company is
focused on the discovery , production and marketing of base and precious metals. Directly and t hrough its
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