TSX, NYSE – HBM 2023 No. 8 Hudbay Announces First Quarter 2023 Results
TSX, NYSE – HBM
2023 No. 8
Hudbay Announces First Quarter 2023 Results
Toronto, Ontario, May 8, 2023 – Hudbay Minerals Inc. (“Hudbay” or the “ company”) (TSX, NYSE:HBM) today
released its first quarter 2023 financial results. All amounts are in U.S. dollars, unless otherwise noted.
First Quarter Operating and Financial Results; Production and Cost Guidance Reaffirmed
• Consolidated production in the first quarter included 22,562 tonnes of copper and 47,240 ounces of gold.
Consolidated cash cost and sustaining cash cost per pound of copper produced, net of by -product creditsi,
were $0.85 and $1.83, respectively, representing a n improvement of 21% and 17%, respectively, compared
to the fourth quarter of 2022.
• Reaffirmed full year 2023 consolidated production guidance of 100,000 to 128,000 tonnes of copper at a cash
cost of $0.40 to $0. 80 per pound ii and sustaining cash cost of $1.35 to $2.05 per pound ii as first quarter
production was in line with quarterly cadence expectations.
• Peru operations successfully managed through a complex environment to maintain steady performance and
produce 20,517 tonnes of copper in the first quarter. The Peru team remained focused on maintaining strong
margins and achieved a cash cost per pound of copper produced, net of by -product creditsi, of $1.36, which
was overall in line with the strong cost performance in the fourth quarter of 2022 . Transportation and supply
chains in Peru have normalized since mid-February and Constancia's concentrate inventory is now at normal
levels, well ahead of schedule.
o Full mining activities resumed at 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 to commence
late in the second quarter of 2023, slightly ahead of schedule.
• Manitoba operations produced 36,034 ounces of gold at a cash cost per ounce of gold produced, net of by-
product credits i, of $938, which was affected by temporary challenges at the Lalor mine in the quarter that
were partly offset by strong throughput and gold recoveries at the New Britannia mill.
o Lalor ore production reached 4,800 tonnes per day late in the first quarter and throughout April after
implementing changes to improve stope fragmentation and load -haul-dump equipment availability,
together with many production optimization initiatives underway at the mine.
• First quarter net earnings and earnings per share were $5.5 million and $0.02, respectively. After adjusting for
a non-cash gain of $8.2 million related to a quarterly revaluation of the closed site environmental reclamation
provision and a $6.1 million re valuation loss related to the gold prepayment liability, among other items, first
quarter adjusted earnings per share were $0.00.
• Operating cash flow before change in non-cash working capital was $85.6 million and adjusted EBITDAi was
$101.9 million in the first quarter.
• Cash and cash equivalents increased during the first quarter to $255.6 million and were positively impacted
by the steady operation of the Constancia mill throughout the transportation and supply chain interruptions
earlier in the quarter and the successful conversion of concentrate inventory into cash during the quarter,
ahead of schedule.
TSX, NYSE – HBM
2023 No. 8
2
• Signed a new 10-year agreement for 100% renewable energy supply to Constancia, resulting in an expected
40% reduction in total Scope 1 and Scope 2 greenhouse gas emissions company-wide, in line with Hudbay’s
climate change target of a 50% reduction by 2030.
Executing on Growth Initiatives and Prudent Financial Planning
• On April 13, 2023, Hudbay announced a definitive agreement (the “Arrangement Agreement”) to acquire all
issued and outstanding common shares of Copper Mountain Mining Corporation ( “Copper Mountain "), to
create a 150,000 -tonnes-per-year copper producer with three long -life mines in tier -one jurisdictions and a
world-class pipeline of organic copper growth projects. The combined company will be the third largest
Canadian copper producer and its complementary asset base and technical expertise is expected to unlock
$30 million in annual operating efficiencies and corporate synergies over the course of three years.
• Three-year production guidance includes average annual copper production of 110,000 tonnes from
Constancia and average annual gold production of more than 190,000 ounces from Snow Lake, a 23% and
30% increase, respectively, from 2022 levels.
• Received positive permitting update at Copper World from the Army Corps of Engineers (“ACOE”) and the
required state level permits continue to be expected in 2023 . Pre-feasibility study for P hase I of the Copper
World project is well-advanced and on track for mid-2023.
• Peru exploration activities resumed with a focus on drill permitting for highly prospective satellite properties
while evaluating the potential for reserve expansion at Constanc ia and Pampacancha through future mining
phases.
• Snow Lake exploration activities are prioritizing step -out drilling for new discoveries to support future growth
in annual production and mine life extension.
• Lalor 2023 winter exploration program intersecte d numerous occurrences of disseminated copper sulfides
over two kilometres down plunge, indicating the potential close proximity of copper-gold feeder zones similar
to the deeper lenses at Lalor.
• The Stall recovery improvement program is on track for commi ssioning in May with ramp -up to higher metal
recoveries by mid-2023.
• Nevada drill program is planned for late 2023 to test high -grade skarn and large porphyry targets identified
through recent geophysical surveys on private land claims near Mason.
• To benefit from strong current gold prices, Hudbay deferred eight months of prepaid gold deliveries from 2023
into 2024, which is expected to increase the company’s cash position by approximately $53 million in 2023 at
prevailing gold prices.
• As an additional prudent measure to ensure free cash flow generation in 2023, Hudbay entered into a zero-
cost collar program in April for approximately 10% of copper production expected in the second half of 2023
at a floor price of $3.95 per pound while providing upside to copper price increases up to $4.28 per pound.
• On track to deliver the discretionary spending reduction targets for 2023 with lower growth capital and
exploration expenditures compared to 2022.
“We continue to be on track to achieve higher production and cash flows in 2023 as we successfully managed the
recent Peru logistical interruptions to ensure steady operations at Constancia and are executing initiatives to increase
the output from our Lalor mine in Snow Lake ,” said Peter Kukielski, Pr esident and Chief Executive Officer. “We took
several prudent measures this quarter to improve our free cash flow for 2023 and we remain focused on being
disciplined with capital allocation as we continue to de -risk Copper World. We are also pleased to be expanding our
copper production profile with the recently announced combination with Copper Mountain, which creates a larger, more
resilient and more diversified cash flow platform to prudently advance our leading organic copper growth pipeline.”
TSX, NYSE – HBM
2023 No. 8
3
Summary of First Quarter Results
Consolidated copper production in the first quarter of 202 3 was 22,562 tonnes, a decrease compared to the fourth
quarter of 2022 primarily due to lower copper grades in Peru and Manitoba, as planned. Consolidated gold production
was 47,240 ounces, a decrease compared to the fourth quarter primarily due lower gold grades in Peru, partially offset
by higher throughput in Snow Lake. Consolidated zinc production in the first quarter was 9,846 tonnes, higher than the
fourth quarter primarily due to higher zinc grades and throughput in Snow Lake. First quarter production was in line
with expectations and Hudbay has reaffirmed its 2023 production guidance for all metals.
Consolidated cash cost per pound of copper produced, net of by-product creditsi, in the first quarter of 2023 improved
to $0.85, compared to $ 1.08 in fourth quarter of 2022. This significant improvement was primarily a result of lower
mining, milling and freight costs and higher by -product credits, partially offset by higher general and administrative
costs and lower consolidated copper production. Consolidated sustaining cash cost per pound of copper produced, net
of by-product creditsi, was $1.83 in the first quarter compared to $2.21 in the fourth quarter. This decrease was primarily
due to the same reasons outlined above and lower sustaining capital expenditures and capitalized exploration. Both
measures are expected to further decline in future quarters with higher expected copper production and contributions
from precious metals by -product credits. The company is reaffirming its full year 2023 consolidated cash cost and
sustaining cash cost guidance. Consolidated all -in sustaining cash co st per pound of copper produced, net of by -
product creditsi, was $2.07 in the first quarter, 14% lower than $2.41 in the fourth quarter of 2022, primarily due to the
same reasons outlined above.
Cash generated from operating activities in the first quarter of 202 3 decreased to $71.3 million compared to $ 86.4
million in the fourth quarter of 202 2. Protests and civil unrest in the southern Peru mining corridor impacted the
company’s Peru operations early in the first quarter; however, these disruption s have abated since mid -February.
Transportation of Constancia’s concentrate and critical supplies has since returned to normal. Operating cash flow
before change in non-cash working capital was $85.6 million during the first quarter of 2023, compared to $109.1 million
in the fourth quarter of 2022. This decrease was primarily the result of lower copper and zinc sales volumes, partially
offset by higher realized prices of all metals.
Net earnings and earnings per share in the first quarter of 2023 were $5.5 million and $0.02, respectively, compared to
a net loss and loss per share of $ 17.4 million and $0. 07, respectively, in the fourth quarter of 2022. The 2023 first
quarter results were positively impacted by a non -cash gain of $8.2 million related to the quarterly revaluation of the
company’s closed site environmental reclamation provision and a $5.0 million variable consideration adjustment with
respect to stream revenue and accretion. These items were offset by a $6.1 million revaluation loss related to the gold
prepayment liability.
Adjusted net earningsi and adjusted net earnings per sharei in the first quarter of 2023 were $0.1 million and $0.00 per
share, respectively, after adjusting for the non -cash revaluation gain of the environmental reclamation provision and
the revaluation loss on the gold prepayment liability, among other items. Th is compares to adjusted net earnings and
adjusted net earnings per share of $2.6 million, and $0.01 in the fourth quarter of 2022. First quarter adjusted EBITDAi
was $101.9 million, compared to $1 24.7 million in the fourth quarter of 2022 because of the same factors affecting
operating cash flow noted above.
As at March 31, 2023, the company’s liquidity includes $255.6 million in cash as well as undrawn availability of $355.4
million under its revolving credit facilities.
TSX, NYSE – HBM
2023 No. 8
4
1 Net debt is a non-IFRS financial performance measure with no standardized definition under IFRS. For further information, please
see the “Non-IFRS Financial Performance Measures” section of this news release.
2 Working capital is determined as total current assets less total current liabilities as defined under IFRS and disclosed on the interim
consolidated financial statements.
Consolidated Financial Performance Three Months Ended
Mar. 31, 2023 Dec. 31, 2022 Mar. 31, 2022
Revenue $000s 295,219 321,196 378,619
Cost of sales $000s 228,706 251,520 293,351
Earnings (loss) before tax $000s 17,430 (14,287) 88,861
Earnings (loss) $000s 5,457 (17,441) 63,815
Basic and diluted earnings (loss) per share $/share 0.02 (0.07) 0.24
Adjusted earnings per share1 $/share 0.00 0.01 0.02
Operating cash flow before change in non-
cash working capital
$ millions 85.6 109.1 77.6
Adjusted EBITDA1 $ millions 101.9 124.7 110.2
1 Adjusted earnings (loss) per share and adjusted EBITDA are non-IFRS financial performance measures with no standardized
definition under IFRS. For further information, please see the “Non-IFRS Financial Performance Measures” section of this news
release.
Consolidated Production and Cost Performance Three Months Ended
Mar. 31, 2023 Dec. 31, 2022 Mar. 31, 2022
Contained metal in concentrate and doré produced1
Copper tonnes 22,562 29,305 24,702
Gold ounces 47,240 53,920 53,956
Silver ounces 702,809 795,015 784,357
Zinc tonnes 9,846 6,326 22,252
Molybdenum tonnes 289 344 207
Payable metal sold
Copper tonnes 18,541 25,415 20,609
Gold2 ounces 49,720 47,256 48,343
Silver2 ounces 541,884 559,306 864,591
Zinc3 tonnes 5,628 8,230 17,306
Molybdenum tonnes 254 421 213
Consolidated cash cost per pound of copper4
produced4
Cash cost $/lb 0.85 1.08 1.11
Sustaining cash cost $/lb 1.83 2.21 2.29
All-in sustaining cash cost $/lb 2.07 2.41 2.54
1 Metal reported in concentrate is prior to deductions associated with smelter contract terms.
2 Includes total payable gold and silver in concentrate and doré sold.
3 For the three months ended March 31, 2023 and December 31, 2022 this metric includes payable zinc in concentrate sold. For the
three months ended March 31, 2022, this metric also includes payable refined zinc metal sold.
4 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 Reporting Measures” section of this news release.
Consolidated Financial Condition ($000s) Mar. 31, 2023 Dec. 31, 2022 Mar. 31, 2022
Cash 255,563 225,665 213,359
Total long-term debt 1,225,023 1,184,162 1,181,119
Net debt1 969,460 958,497 967,760
Working capital2 100,987 76,534 161,846
Total assets 4,367,982 4,325,943 4,538,214
Equity 1,574,521 1,571,809 1,561,978
TSX, NYSE – HBM
2023 No. 8
5
Peru Operations Review
Peru Operations Three Months Ended
Mar. 31, 2023 Dec. 31, 2022 Mar. 31, 2022
Constancia ore mined1 tonnes 3,403,181 5,614,918 6,908,151
Copper % 0.34 0.40 0.32
Gold g/tonne 0.04 0.04 0.04
Silver g/tonne 2.52 3.48 3.22
Molybdenum % 0.01 0.01 0.01
Pampacancha ore mined tonnes 897,295 3,771,629 847,306
Copper % 0.49 0.37 0.27
Gold g/tonne 0.52 0.29 0.43
Silver g/tonne 5.12 3.84 4.06
Molybdenum % 0.01 0.01 0.01
Total ore mined tonnes 4,300,476 9,386,547 7,755,457
Strip ratio2 1.84 0.97 1.10
Ore milled tonnes 7,663,728 7,795,735 7,213,833
Copper % 0.33 0.41 0.31
Gold g/tonne 0.08 0.12 0.08
Silver g/tonne 3.69 3.93 3.26
Molybdenum % 0.01 0.01 0.01
Copper recovery % 81.7 85.1 85.3
Gold recovery % 56.8 69.6 59.8
Silver recovery % 60.7 66.5 66.9
Molybdenum recovery % 34.8 37.7 21.1
Contained metal in concentrate
Copper tonnes 20,517 27,047 19,166
Gold ounces 11,206 20,860 10,789
Silver ounces 552,167 655,257 505,568
Molybdenum tonnes 289 344 207
Payable metal sold
Copper tonnes 16,316 23,789 16,825
Gold ounces 11,781 15,116 14,452
Silver ounces 392,207 411,129 636,133
Molybdenum tonnes 254 421 213
Combined unit operating cost3,4,5 $/tonne 11.47 13.64 12.37
Cash cost5 $/lb 1.36 1.34 1.54
Sustaining cash cost5 $/lb 2.12 2.09 2.27
1 Reported tonnes and grade for ore mined are estimates based on mine plan assumptions and may not reconcile fully to ore milled.
2 Strip ratio is calculated as waste mined divided by ore mined.
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 Excludes approximately $0.7 million, or $0.09 per tonne, of COVID-related costs during the three months ended December 31,
2022 and $2.3 million, or $0.32 per tonne, during the three months ended March 31, 2022.
5 Combined unit operating cost, cash cost and sustaining cash cost per pound of copper produced, net of by-product credits, are
non-IFRS financial performance measures with no standardized definition under IFRS. For further information, please see the “Non-
IFRS Financial Performance Measures” section of this news release.
TSX, NYSE – HBM
2023 No. 8
6
During the first quarter of 2023, the Constancia operations produced 20,517 tonnes of copper, 11,206 ounces of gold,
552,167 ounces of silver and 289 tonnes of molybdenum. Production levels were lower than the fourth quarter of 2022
due to lower grades from the processing of stockpiles, as discussed below. Due to this and higher stripping activities
planned in the Pampacancha pit in the second quarter of 2023, Hudbay continues to expect 2023 Peru production to
be higher in the second half of 2023 and the company is on track to achieve full year 2023 Peru production guidance.
Ore mined from Pampacancha in the first quarter of 2023 was 897,295 tonnes at record high grades of 0.49% copper
and 0.52 grams per tonne gold. Despite this achievement, total ore mined in the first quarter of 2023 was lower than
the fourth quarter of 2022 mainly due to the processing of stockpiles in order to conserve fuel during protests and civil
unrest in Peru that occurred in early 2023. Since mid-February, transportation of Constancia’s concentrate and critical
supplies has returned to normal.
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 to resume late in the second quarter of 2023,
slightly ahead of the original schedule.
The logistical risk mitigation plans implemented during the first quarter, together with strong continued support from the
local communities, enab led Hudbay’s plant to continue to operate uninterrupted at full capacity supplemented with
approximately 3.9 million tonnes of stockpiled ore. Ore milled during the first quarter of 2023 was relatively unchanged
from the fourth quarter of 2022. Milled grades decreased in the first quarter compared to the fourth quarter due to the
processing of lower-grade stockpiles as discussed above. Recoveries of all metals during the first quarter were lower
than the fourth quarter due to higher levels of impurities in stockpile ore. Hudbay expects to continue to process a
significant amount of stockpiles during the second quarter of 2023 while the company completes the planned three-
month stripping period in the Pampacancha pit, in line with the mine plan.
Combined mine, mill and G&A unit operating costs i in the first quarter of 2023 were 16% lower than the fourth quarter
of 2022 primarily due to lower mining costs.
Peru’s cash cost per pound of copper produced, net of by-product creditsi, in the first quarter of 2023 was $1.36 and
relatively unchanged from the fourth quarter of 2022. This cost measure remains slightly above the upper end of the
2023 guidance range. However, cash cost per pound of copper produced, net of by -product credits, is expected to
decline and full year cash costs are expected to remain within the 2023 guidance range with higher expected copper
production and contributions from precious metal by-product credits later this year.
Peru’s sustaining cash cost per pound of copper produced, net of by -product creditsi, in the first quarter of 2023 was
$2.12 and relatively in line with the fourth quarter of 2022 as lower mining costs and capitalized exploration were offset
by lower copper production.
TSX, NYSE – HBM
2023 No. 8
7
Manitoba Operations Review
Manitoba Operations Three Months Ended
Mar. 31, 2023 Dec. 31, 2022 Mar. 31, 20221
Lalor ore mined tonnes 373,599 369,453 386,752
Gold g/tonne 3.96 4.00 3.76
Copper % 0.57 0.73 0.80
Zinc % 3.32 2.17 4.06
Silver g/tonne 18.24 19.37 22.94
New Britannia Mill:
Ore milled tonnes 143,042 141,142 124,176
Gold g/tonne 6.05 6.11 5.63
Copper % 0.61 0.91 0.86
Zinc % 0.76 0.67 0.85
Silver g/tonne 22.39 22.09 22.03
Copper recovery - concentrate % 91.7 89.3 89.0
Gold recovery - concentrate % 62.0 56.6 61.4
Silver recovery - concentrate % 61.9 55.4 63.4
Stall Concentrator:
Ore milled tonnes 242,619 204,350 273,125
Gold g/tonne 2.78 2.50 3.07
Copper % 0.59 0.61 0.81
Zinc % 4.81 3.43 5.78
Silver g/tonne 17.14 19.24 23.68
Copper recovery % 87.0 89.0 86.7
Zinc recovery % 84.4 90.1 85.7
Gold recovery % 61.9 62.4 55.8
Silver recovery % 56.3 56.6 58.6
Total contained metal in concentrate and doré2
Gold ounces 36,034 33,060 43,167
Copper tonnes 2,045 2,258 5,536
Zinc tonnes 9,846 6,326 22,252
Silver ounces 150,642 139,758 278,789
Total payable metal sold
Gold3 ounces 37,939 32,140 33,891
Copper tonnes 2,225 1,626 3,784
Zinc tonnes 5,628 8,230 17,306
Silver3 ounces 149,677 148,177 228,458
Combined unit operating cost4,5 C$/tonne 216 241 176
Gold cash cost5 $/oz 938 922 416
Gold sustaining cash cost5 $/oz 1,336 1,795 1,187
1 The 777 mine and Flin Flon concentrator information for March 31, 2022 is not disclosed in the table above. The operations were
closed in June 2022. The relevant comparative information can be found in the Summary of Results section in the Management’s
Discussion and Analysis for the third quarter of 2022. Total contained metal in concentrate and doré, total payable metal sold, unit
cost and cash costs for March 31, 2022 include the impact of the Flin Flon operations.
2 Doré includes slag and carbon fines in the first quarter of 2023.
3 Includes total payable precious metals in concentrate and doré sold.
4 Reflects combined mine, mill and G&A costs per tonne of ore milled.
5 Combined unit operating cost, cash cost and sustaining cash cost per ounce of gold produced, net of by-product credits, are non-
IFRS financial performance measures with no standardized definition under IFRS. For further information, please see the “Non-IFRS
Financial Performance Measures” section of this news release.
TSX, NYSE – HBM
2023 No. 8
8
During the first quarter of 2023, the Manitoba operations produced 36,034 ounces of gold, 9,846 tonnes of zinc, 2,045
tonnes of copper and 150,642 ounces of silver. Production of gold, zinc and silver were higher than the fourth quarter
of 2022 primarily due to higher throughput and higher grades. Copper production was lower than the fourth quarter due
to lower head grades. With the completion of a number of key initiatives aimed to support higher production levels at
Lalor, improved metal recoveries at the mills and a prioritization of mining higher gold grade zones at Lalor throughout
the year, as planned, full year Manitoba production of all metals remains on track to achieve guidance ranges for 2023.
The Manitoba team continues to advance a number of key initiatives to support higher production levels and improved
metal recoveries at Hudbay’s Snow Lake operations and have made significant progress in building longhole inventory,
optimizing the development drift size and focusing on shaft availability improvements to enable more ore to be hoisted
to surface while minimizing inefficient trucking of ore via the ramp. The first phase of the Stall mill recovery project,
consisting of new cyclone packs, state -of-the-art Jameson Cells on the copper and zinc circuits and process control
improvements, is on track for commissioning in May with ramp-up to higher metal recoveries expected by mid-2023.
Ore mined at Lalor was slightly higher than the fourth quarter of 2 022 despite being impacted by stope muck
fragmentation issues that created delays at the rock breakers and low load-haul-dump equipment availability in March.
The company implemented changes to improve stope fragmentation and load-haul-dump equipment availability, which
together with the many production optimization initiatives underway at Lalor, resulted in Lalor achieving higher
production levels of 4,800 tonnes per day late in the first quarter and throughout April.
The Stall mill processed 19% more ore in the first quarter compared to the fourth quarter of 2022, in line with the base
metal ore production from Lalor. Stall recoveries were consistent with the metallurgical model for the head grades
delivered. The New Britannia mill continued to achieve consistent production above its nameplate capacity in the first
quarter of 2023, averaging approximately 1,590 tonnes per day. Hudbay continues to advance improvement initiatives
at New Britannia with a focus on reducing reagent and grinding media consumption. These initiatives entail minimal
capital outlays while further improving overall metal recoveries and copper concentrate grades.
Combined mine, mill and G&A unit operating costsi in the first quarter decreased by 10% compared to the fourth quarter
of 2022, reflecting higher throughput as a result of the production efficiency initiatives underway.
Cash cost per ounce of gold produced, net of by-product creditsi, in the first quarter was $938, slightly higher than the
fourth quarter of 2022 primarily due to lower by -product credits and higher G&A, partially offset by higher gold
production. Full year cash costs are expected to decline to be within the 2023 guidance range with increasing gold
production throughout the year fro m higher grades and throughput at Lalor and the completion of the Stall recovery
project in the second quarter, as planned.
Sustaining cash cost per ounce of gold produced, net of by-product creditsi, in the first quarter was $1,336, lower than
the fourth quarter of 2022 primarily due to lower sustaining capital expenditures.