TSX, NYSE – HBM 2024 No. 2 Hudbay Delivers Record Fourth Quarter and Full Year 2023 Results and Provides Annual Guidance
TSX, NYSE – HBM
2024 No. 2
Hudbay Delivers Record Fourth Quarter and Full Year 2023 Results and Provides
Annual Guidance
Toronto, Ontario, February 23, 2024 – Hudbay Minerals Inc. (“Hudbay” or the “ company”) (TSX, NYSE: HBM)
today released its fourth quarter and full year 2023 financial results, and announced 2024 annual production and cost
guidance. All amounts are in U.S. dollars, unless otherwise noted. All production and cost amounts reflect the Copper
Mountain mine on a 100% basis, with Hudbay owning a 75% interest in the mine.
Delivering Record Fourth Quarter and Full Year Operating and Financial Results
• Achieved record quarterly and annual revenue of $602.2 million and $1,690.0 million, respectively, with strong
consolidated copper production of 45,450 tonnes and record consolidated gold production of 112,776 ounces
in the fourth quarter from continued higher grades at the Pampacancha deposit in Peru and the Lalor mine in
Manitoba and the contributions of the newly acquired Copper Mountain mine in British Columbia.
• Delivered a significant increase in operating cash flow before change in non-cash working capital to $246.5
million in the fourth quarter , a 35% increase compared to $182.0 million in the third quarter , which was
meaningfully higher than prior quarters.
• Achieved 2023 consolidated production guidance for all metals. Full year 2023 copper production of 131,691
tonnes, gold production of 310,429 ounces and silver production of 3,575,234 ounces increased by 26%, 41%
and 13%, respectively, compared to 2022.
• Consolidated 2023 cash cost i and sustaining cash cost i were better than expected and significantly
outperformed the 2023 guidance range. Full year 2023 consolidated cash cost and sustaining cash cost per
pound of copper produced, net of by -product creditsi, were $0.80 and $1.72, respectively, increasing by 7%
and 17%, respectively, compared to 2022.
• Consolidated cash cost and sustaining cash cost per pound of copper produced, net of by-product creditsi, in
the fourth quarter, were $0.16 and $1.09, respectively, improving by 85% and 42%, respectively, compared
to the third quarter of 2023.
• Peru operations benefited from continued higher grades at the Pampacancha satellite pit, resulting in 33,207
tonnes of copper production and 49,418 ounces of gold production in the fourth quarter. Full year copper
production was within 2023 guidance ranges while gold production exceeded the top end of guidance. Peru
cash cost per pound of copper produced, net of by -product creditsi, in the fourth quarter improved to $0.54,
and full year cash costs significantly improved over 2022 levels and achieved the low end of the 2023 annual
cost guidance range.
• Manitoba operations produced 59,863 ounces of gold in the fourth quarter, a quarterly record as higher gold
and copper grade zones were mined at Lalor and the New Britannia mill processed significantly higher
amounts of gold ore. Full year gold production was well within the 2023 guidance range and exceeded recent
expectations of being positioned at the lower end of the range. Manitoba cash cost per ounce of gold produced,
net of by-product creditsi, was $434 during the fourth quarter and full year cash cos ts were within the 2023
annual guidance range.
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• British Columbia operations produced 8,508 tonnes of copper at a cash cost per pound of copper produced,
net of by -product credits i, of $2.67 in the fourth quarter . Full year production and cash costs were within
Hudbay's post-acquisition guidance ranges. Operational stabilization plans continue to be implemented at the
Copper Mountain mine with a focus on opening additional mining faces, optimizing ore feed to the plant and
improving plant reliability.
• Fourth quarter net earnings and earnings per share were $33.5 million and $0.10, respectively. After adjusting
for a non-cash loss of $34.0 million related to a quarterly revaluation of a closed site environmental reclamation
provision and a non-cash revaluation loss of $9.0 million related to the gold prepayment liability, among other
items, fourth quarter adjusted earningsi per share were $0.20.
• Cash and cash equivalents increased by $4.6 million to $249.8 million during the fourth quarter due to strong
operating cash flows bolstered by higher copper and gold prices and sales volumes enabling a $94.5 million
reduction in net debti during the quarter.
Strong Operating Performance Driving Free Cash Flow Generation with Continued Financial Discipline
• Executed on planned higher production levels and achieved continued operating and capital cost efficiencies
to generate significant free cash flow in the fourth quarter.
• Achieved adjusted EBITDAi of $274.4 million in the fourth quarter, the highest quarterly level over the last five
years and a 44% increase from the previous recent high in the third quarter of 2023.
• Completed $90 million in debt repayments during the fourth quarter with a $30 million net reduction in the
company’s revolving credit facility balance and a $59.7 million redemption of the remaining Copper Mountain
bonds, well ahead of the 2026 maturity to increase financial flexibility and lower financing costs. Deleveraging
efforts continued into the first quarter of 2024 with an additional $10 million repayment o f the company’s
revolving credit facility balance in January 2024.
• Increased cash and total liquidity by $34.1 million to $573.7 million compared to the end of the third quarter.
Net debti reduced to approximately $1,038 million during the fourth quarter, which together with higher levels
of adjusted EBITDA, improved the net debt to adjusted EBITDA ratioi to 1.6x compared to 2.0x at the end of
2022.
• Delivered annual discretionary spending reduction targets for 2023 with lower growth capital and exploration
expenditures compared to 2022. As a result of a continued focus on discretionary spending reductions, total
capital expenditures for 2023 (excludin g Copper Mountain) of approximately $243 million were $ 57 million
lower than original guidance levels, a further decrease from the $30 million in reductions announced in the
third quarter.
Executing on Growth Initiatives
• Post-acquisition plans to stabilize the Copper Mountain operations are underway with a focus on mining fleet
ramp-up activities, accelerated stripping and increasing mill reliability. Achieved the targeted $10 million in
annualized corporate synergies as of January 2024.
• Released a NI 43-101 technical report for the Copper Mountain mine in December 2023, which contemplates
average annual copper production of 46,500 tonnes in the first five years, 45,000 tonnes in the first ten years
and 37,000 tonnes over the 21-year mine life. Average cash costs and sustaining cash costs over the mine
life are expected to be $1.84 and $2.53 per pound of copper i, respectively. Several opportunities to further
increase production, improve costs and extend mine life are being evaluated for future mine plans.
• Achieved record copper recoveries of 87.4% at the Constancia mill in the fourth quarter of 2023 as a result of
the successful completion of the recovery improvement program in the second quarter, on time and on budget.
• Achieved higher copper recoveries above 90% and gold recoveries above 65% at the Stall mill in the second
half of 2023 because of the successful ramp up of the Stall mill recovery improvement project in the second
quarter, on time and on budget.
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• The New Britannia mill achieved record throughput levels averaging 1,650 tonnes per day in 2023 and 1,800
tonnes per day in the fourth quarter, exceeding its original design capacity of 1,500 tonnes per day due to the
successful implementation of process improvement initiatives.
• Commenced largest annual exploration program in Snow Lake consist ing of geophysical surveys and drill
campaigns testing the newly acquired Cook Lake claims, former Rockcliff properties and near -mine
exploration at Lalor.
• Advancing a development and exploration drift at the 1901 deposit in Snow Lake, located within 1,000 metres
from the underground ramp access to the Lalor mine, with a focus on confirming the optimal mining method
for the base metal and gold lenses and converting the inferred mineral resources in the gold lenses to mineral
reserves.
• Continuing to evaluate the Flin Flon tailings reprocessing opportunity through advancing metallurgical test
work studies and analyzing metallurgical technologies.
"We had a strong end to the year with increased copper production, record gold production and record financial
performance in the fourth quarter, resulting in the successful achievement of our annual guidance metrics,” said Peter
Kukielski, President and Chief Executive Officer. “2023 was a year of execution and delivery as we realized the higher
grades in Peru, achieved record gold production in Manitoba and enhanced our operating base with the addition of the
Copper Mountain mine. We continue d to demonstrate financial discipline in 2023 through reduced discretionary
spending to drive free cash flow generation and debt reduction. These 2023 achievements are a testament to our
outstanding team, which continues to deliver the plan while always operating safely and efficiently. Our commitment to
continued financial discipline, together with our resilient operating platform, will allow us to prudently advance and
unlock value from our leading organic pipeline of brownfield expansion and greenfield exploration and development
opportunities.”
2024 Annual Guidance and Outlook
• Consolidated copper production is forecast to increase by 19% to 156,500 tonnesii in 2024, compared to 2023,
with continued higher grades in Peru and a full year of British Columbia production.
• Consolidated gold production is forecast to decrease slightly to 291,000 ouncesii in 2024, compared to 2023,
due to higher than planned gold grades being mined in Peru in the fourth quarter of 2023 and a deferral of
high grade gold zones in Peru to 2025. Total gold production in Peru over the 2023 to 2025 period is expected
to be higher than previous guidance levelsii.
• Consolidated cash cost, net of by-product creditsi, in 2024 is expected to be within a range of $1.05 and $1.25
per pound of copper, higher than 2023 as a result of lower gold by -product credits and a full year of
contributions from British Columbia.
• Total capital expenditures are expected to be $335 million in 2024, reflecting lower expenditures in Peru,
Manitoba and Arizona, offset by higher expenditures in British Columbia associated with accelerated stripping
to access higher grades and a reclassification of costs from operating to capitalized stripping versus the recent
technical report.
• Exploration expenditures are expected to increase in 2024 as the company executes its largest -ever
exploration program in the Snow Lake region, which is being partially funded by a critical minerals premium
flow-through financing that was completed in the fourth quarter.
• Continued focus on reducing discretionary spending in 2024 with total growth capital expenditures 23% lower
than 2023.
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Summary of Fourth Quarter Results
Consolidated copper production in the fourth quarter of 2023 was 45,450 tonnes, an 8% increase from the third quarter
of 2023, while consolidated gold production was 112,776 ounces, an 11% increase, and consolidated silver production
was 1,197,082 ounces, a 13% increase. The increases in production were primarily due to continued high recoveries
in Peru and Manitoba, mining of the high copper and gold grade zones at the Pampacancha deposit and higher gold
and copper grade zones at Lalor , record throughput at the New Britannia gold mill, and incremental production from
the Copper Mountain mine. Consolidated zinc production in the fourth quarter of 2023 decreased compared to the prior
quarter primarily due to lower base metals throughput and lower zinc grades at Lalor, as planned.
Cash generated from operating activities in the fourth quarter of 2023 increased by 50% to $228.5 million compared to
$151.9 million in the third quarter of 2023. Operating cash flow before change in non-cash working capital was a record
$246.5 million, reflecting an increase of $64.5 million compared to the third quarter. The increase in operating cash flow
before change in non-cash working capital was primarily the result of higher copper and gold sales volumes from mining
the high copper and gold grade zones of the Pampacancha deposit and higher gold and copper grade zones at Lalor
and higher copper and gold metal prices.
Net earnings and earnings per share in the fourth quarter of 2023 were $33.5 million and $0.10, respectively, compared
to net earnings and earnings per share of $ 45.5 million and $0.13, respectively in the third quarter . The results were
positively impacted by higher copper, gold and silver sales volumes as well as higher copper, gold and silver realized
prices. This was partially offset by a non-cash loss of $34.0 million related to the quarterly revaluation of the
environmental reclamation provision at closed sites and a non-cash revaluation loss of $9.0 million related to the gold
prepayment liability.
Adjusted net earningsi and adjusted net earnings per sharei in the fourth quarter of 2023 were $71.3 million and $0.20
per share, respectively, after adjusting for the non-cash loss related to the revaluation of the company’s environmental
provision and the revaluation loss on the gold prepayment liability, among other items. This compares to adjusted net
earnings and adjusted net earnings per share of $24.4 million, and $0.07 in the prior quarter. Fourth quarter adjusted
EBITDAi was $274.4 million, an increase of 44% compared to $190.7 million in the third quarter of 2023.
In the fourth quarter of 2023, consolidated cash cost per pound of copper produced, net of by -product creditsi, was
$0.16, compared to $1.10 in the third quarter. Consolidated sustaining cash cost per pound of copper produced, net of
by-product creditsi, was $1.09 in the fourth quarter of 2023 compared to $1 .89 in the third quarter. The significant
decrease in both was the result of higher copper production and higher by-product credits, partially offset by higher
mining, milling and G&A costs from incorporating Copper Mountain.
Consolidated all-in sustaining cash cost per pound of copper produced, net of by -product creditsi, was $1. 31 in the
fourth quarter of 2023, lower than $2.04 in the third quarter, due to the same reasons outlined above as well as lower
corporate selling and administrative expenses.
As at December 31, 2023, total liquidity increased to $573.7 million, including $249.8 million in cash and cash
equivalents as well as undrawn availability of $323.9 million under the company’s revolving credit facilities. N et debt
declined by $94.5 million to $1,037.7 million as at December 31, 2023. During the quarter, Hudbay redeemed, in full,
the remaining $59.7 million of outstanding Copper Mountain bonds and reduced the net balance drawn under the
revolving credit facilities by $30 million. Based on continued free cash flow generation in the fourth quarter of 2023, the
company continues to make progress on the deleveraging targets set out in the “3-P” plan for sanctioning Copper
World. Current liquidity combined with cash flow from operations is expected to be sufficient to meet liquidity needs for
the foreseeable future.
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Summary of Full Year Results
Hudbay achieved its 2023 consolidated production guidance for all metals. On a business unit stand-alone basis, Peru
exceeded the top end of the gold production guidance range, Manitoba exceeded the top end of the copper production
guidance range and Copper Mountain exceeded the top end of the silver production guidance range for the portion of
2023 since acquisition. Consolidated copper, gold and silver production for the full year 2023 increased by 26%, 41%
and 13%, respectively, compared to 2022 with the acquisition of Copper Mountain as well as higher throughput and
recoveries in Peru and Manitoba and higher overall copper, gold and silver grades.
Consolidated cash cost per pound of copper produced, net of by -product creditsi, in 2023 was $0.80, compared to
$0.86 in 2022, and achieved the low end of the 2023 annual cost guidance range. This decrease was mainly the result
of higher copper production and higher by -product credits, partially offset by higher mining and milling costs from
incorporating Copper Mountain. Consolidated sustaining cash cost per p ound of copper produced, net of by -product
creditsi, was $1.72 in 2023, compared to $2.07 in 2022, outperforming 2023 guidance expectations. This decrease was
driven by the above reasons as well as the lower cash sustaining capital expenditures. Consolidated all-in sustaining
cash cost per pound of copper produced, net of by-product creditsi, was $1.92 in 2023, lower than $2.26 in 2022, due
to the same reasons outlined above partially offset by higher corporate selling and administrative expenses.
Cash generated from operating activities decreased to $476.9 million in 2023 from $487.8 million in 2022 primarily due
to a $189. 2 million decrease in non-cash working capital caused by timing and changes in provisionally priced
receivables and an increase in inventory. Operating cash flow before change in non-cash working capital increased to
$570.0 million from $391.7 million in 202 2. The increase in operating cash flow before change in non- cash working
capital was primarily the result of higher copper and gold sales volumes and higher gold prices, partially offset by lower
zinc sales volumes, lower copper and zinc metal prices and higher treatment and refining charges. Zinc sales volumes
were lower than the prior year due to the planned closure of the 777 mine in June 2022.
Net earnings and earnings per share for 2023 were $69. 5 million and $0.22, respectively, compared to 2022 net
earnings and earnings per share of $70.4 million and $0.27, respectively. Full year 2023 net earnings were impacted
by $21.4 million in non-cash mark-to -market losses arising from the revaluation of the gold prepayment liability,
investments and share-based compensation, partially offset by a non-cash gain of $11.4 million related to the
revaluation of the Flin Flon environmental reclamation provision. The prior period results benefited from a non-cash
$133.5 million revaluation gain for the Flin Flon environmental reclamation provision, partially offset by a $95.0 million
pre-tax impairment loss related to the previous stand-alone development plan for the Rosemont deposit. Full year 2023
adjusted EBITDAi was $647.8 million, an increase of 36% compared to $475.9 million in 2022.
1 Net debt and net debit to 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.
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 Equity attributable to owners of the company.
4 Net debt to adjusted EBITDA for the 12 month period.
Consolidated Financial Condition ($000s) Dec. 31, 2023 Sep. 30, 2023 Dec. 31, 2022
Cash and cash equivalents 249,794 245,217 225,665
Total long-term debt 1,287,536 1,377,443 1,184,162
Net debt1 1,037,742 1,132,226 958,497
Working capital2 135,913 128,463 76,534
Total assets 5,312,634 5,250,596 4,325,943
Equity3 2,096,811 2,044,684 1,571,809
Net debt to adjusted EBITDA1,4 1.6 2.3 2.0
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Consolidated Financial Performance Three Months Ended
Dec. 31, 2023 Sep. 30, 2023 Dec. 31, 2022
Revenue $000s 602,189 480,456 321,196
Cost of sales $000s 405,433 374,057 251,520
Earnings (loss) before tax $000s 80,982 84,149 (14,287)
Earnings (loss) $000s 33,528 45,490 (17,441)
Basic and diluted earnings (loss) per share $/share 0.10 0.13 (0.07)
Adjusted earnings per share1 $/share 0.20 0.07 0.01
Operating cash flow before change in non-
cash working capital
$ millions 246.5 182.0 109.1
Adjusted EBITDA1 $ millions 274.4 190.7 124.7
Year Ended
Dec. 31, 2023 Dec. 31, 2022
Revenue $000s 1,690,030 1,461,440
Cost of sales $000s 1,297,469 1,184,552
Earnings before tax $000s 151,830 95,815
Earnings $000s 69,543 70,382
Basic and diluted earnings per share $/share 0.22 0.27
Adjusted earnings per share1 $/share 0.23 0.10
Operating cash flow before change in non-
cash working capital
$ millions 570.0 391.7
Adjusted EBITDA1 $ millions 647.8 475.9
1 Adjusted (loss) earnings 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.
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Consolidated Production and Cost Performance5 Three Months Ended
Dec. 31, 2023 Sep. 30, 2023 Dec. 31, 2022
Contained metal in concentrate and doré produced1
Copper tonnes 45,450 41,964 29,305
Gold ounces 112,776 101,417 53,920
Silver ounces 1,197,082 1,063,032 795,015
Zinc tonnes 5,747 10,291 6,326
Molybdenum tonnes 397 466 344
Payable metal sold
Copper tonnes 44,006 39,371 25,415
Gold2 ounces 104,840 74,799 47,256
Silver2 ounces 1,048,877 748,955 559,306
Zinc3 tonnes 7,385 7,125 8,230
Molybdenum tonnes 468 426 421
Consolidated cash cost per pound of copper produced4
Cash cost $/lb 0.16 1.10 1.08
Sustaining cash cost $/lb 1.09 1.89 2.21
All-in sustaining cash cost $/lb 1.31 2.04 2.41
Year Ended
Dec. 31, 2023 Dec. 31, 2022
Contained metal in concentrate and doré produced1
Copper tonnes 131,691 104,173
Gold ounces 310,429 219,700
Silver ounces 3,575,234 3,161,294
Zinc tonnes 34,642 55,381
Molybdenum tonnes 1,566 1,377
Payable metal sold
Copper tonnes 124,996 94,473
Gold2 ounces 276,893 213,415
Silver2 ounces 3,145,166 2,978,485
Zinc3 tonnes 28,779 59,043
Molybdenum tonnes 1,462 1,352
Consolidated cash cost per pound of copper produced4
Cash cost $/lb 0.80 0.86
Sustaining cash cost $/lb 1.72 2.07
All-in sustaining cash cost $/lb 1.92 2.26
1 Includes production results from the Copper Mountain mine following the June 20, 2023 acquisition completion date. Production
results from the Copper Mountain mine represents the period from June 20, 2023 acquisition completion date through to the end of
the fourth quarter of 2023. Includes 100% of Copper Mountain mine production. Hudbay owns 75% of the Copper Mountain mine.
As Copper Mountain was acquired on June 20, 2023, there were no comparative 2022 figures.
2 Includes total payable gold and silver in concentrate and in doré sold.
3 Metal reported in concentrate is prior to deductions associated with smelter contract terms.
4 For the three months ended December 31, 2023 and September 30, 2023, this metric includes payable zinc in concentrate sold.
For the three months ended December 31, 2022, this metric also included refined zinc metal and payable zinc in concentrate sold.
For the year ended December 31, 2023, this metric includes payable zinc in concentrate sold. For the year ended December 31,
2022, this metric also included payable refined zinc metal sold.
5 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.
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Peru Operations Review
Peru Operations Three Months Ended Year Ended
Dec. 31,
2023
Sep. 30,
2023
Dec. 31,
2022
Dec. 31,
2023
Dec. 31,
2022
Constancia ore mined1 tonnes 973,176 1,242,198 5,614,918 9,265,954 25,840,435
Copper % 0.30 0.30 0.40 0.32 0.35
Gold g/tonne 0.04 0.04 0.04 0.04 0.04
Silver g/tonne 2.26 2.91 3.48 2.53 3.40
Molybdenum % 0.01 0.01 0.01 0.01 0.01
Pampacancha ore mined tonnes 5,556,613 5,894,013 3,771,629 14,756,416 8,319,250
Copper % 0.56 0.53 0.37 0.51 0.33
Gold g/tonne 0.32 0.30 0.29 0.33 0.29
Silver g/tonne 4.84 4.22 3.84 4.28 4.06
Molybdenum % 0.01 0.02 0.01 0.01 0.01
Total ore mined tonnes 6,529,789 7,136,211 9,386,547 24,022,370 34,159,685
Strip ratio2 1.26 1.36 0.97 1.51 1.13
Ore milled tonnes 7,939,044 7,895,109 7,795,735 30,720,929 30,522,294
Copper % 0.48 0.43 0.41 0.39 0.34
Gold g/tonne 0.25 0.21 0.12 0.16 0.09
Silver g/tonne 4.20 3.75 3.93 3.62 3.58
Molybdenum % 0.01 0.02 0.01 0.01 0.01
Copper recovery % 87.4 85.2 85.1 84.2 85.0
Gold recovery % 77.6 74.8 69.6 71.8 63.6
Silver recovery % 78.0 73.2 66.5 70.0 65.7
Molybdenum recovery % 33.6 37.2 37.7 35.8 34.8
Contained metal in concentrate
Copper tonnes 33,207 29,081 27,047 100,487 89,395
Gold ounces 49,418 40,596 20,860 114,218 58,229
Silver ounces 836,208 697,211 655,257 2,505,229 2,309,352
Molybdenum tonnes 397 466 344 1,566 1,377
Payable metal sold
Copper tonnes 31,200 27,490 23,789 96,213 79,805
Gold ounces 38,114 32,757 15,116 97,176 49,968
Silver ounces 703,679 460,001 411,129 2,227,419 2,045,678
Molybdenum tonnes 468 426 421 1,462 1,352
Combined unit operating
cost3,4,5
$/tonne 12.24 12.20 13.64 12.47 12.78
Cash cost5 $/lb 0.54 0.83 1.34 1.07 1.58
Sustaining cash cost5 $/lb 1.21 1.51 2.09 1.81 2.35
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 $5.2 million or $0.17 per tonne, during the twelve months ended December 31, 2022.
5 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.