TSX, NYSE – HBM 2024 No. 4 Hudbay Provides Annual Reserve and Resource Update and Production Outlook
TSX, NYSE – HBM
2024 No. 4
Hudbay Provides Annual Reserve and Resource Update and Production Outlook
• Consolidated copper production is expected to average 153,000i tonnes per year over the next three
years, representing a 16% increase from 2023 and demonstrating Hudbay’s strong and stable
operating portfolio with three long-life operations in tier-one mining jurisdictions in the Americas.
• Strong complementary gold exposure with consolidated gold production expected to average 272,500i
ounces per year over the next three years, reflecting strong production in Manitoba and a contribution
from Pampacancha high grade gold zones.
• Enhanced operating platform with the recent acquisition of Copper Mountain, positioning Hudbay as
the fourth largest copper producer and the fifth largest gold producer in Canada in 2023ii.
• Constancia’s expected mine life extended by three years to 2041 as a result of mineral reserve
conversion and the addition of a further mining phase at the Constancia pit.
• Snow Lake’s expected mine life maintained until 2038 with average annual gold production of 185,000i
ounces expected over the next three years.
• Exploration activities in Peru focused on advancing drill permitting for highly prospective satellite
properties near Constancia.
• Commenced largest annual exploration program in Snow Lake consisting of geophysical surveys and
drill campaigns testing the newly acquired Cook Lake claims, former Rockcliff properties and near -
mine exploration at Lalor.
• Developing access drift at the 1901 deposit in Snow Lake, located within 1,000 metres from the
underground ramp to the Lalor mine, with a focus on confirming the optimal mining method for the
base metal and gold lenses and converting inferred mineral resources in the gold lenses to mineral
reserves.
• Continuing to de -risk Copper World after enhanced pre-feasibility study published in 2023 and
remaining state level permits expected in 2024.
• Advancing Flin Flon tailings reprocessing opportunities through metallurgical test work and early
economic evaluation to potentially produce critical minerals and precious metals while reducing the
environmental footprint.
• Entered into an option agreement with Marubeni Corporation relating to three exploration projects
located near Hudbay’s Flin Flon processing facilities.
Toronto, Ontario, March 28, 2024 – 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 updated mineral reserve estimates and three -year production outlook demonstrate Hudbay’s high-quality
operating platform with annual production of more than 150,000 tonnes of copper and 2 70,000 ounces of gold from
three long-life mines located in tier -one mining friendly jurisdictions in the Americas ,” said Peter Kukielski, Hudbay’s
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President and Chief Executive Officer. “We saw strong reserve conversion in Peru after successful geotechnical work
confirmed the addition of another mining phase at Constancia, extending the mine life to 2041, and we continued to
progress drill permitting activities for the high- potential exploration satellites in Peru. Manitoba exploration efforts are
focused on advancing the largest geophysical and drilling program in our history in Snow Lake to test the newly acquired
land claims for another anchor depo sit and extend the mine life well beyond 2038. Our Copper Mountain mine has a
robust copper production profile over its 21-year mine life as reflected in the recent technical report. We already have
a resilient operating platform delivering stable copper production and complementary gold production, and we expect
to continue 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.”
Constancia Operations
Constancia is Hudbay’s 100% owned copper operation located in the province of Chumbivilcas in southern Peru and
consists of the Constancia and Pampacancha deposits. Current mineral reserve estimates total 548 million tonnes at
0.27% copper containing approximately 1.5 million tonnes of copper. Constancia’s expected mine life has been
extended by three years to 2041 as a result of the successful conversion of mineral resources to mineral reserves with
the addition of a further mining phase at the Constancia pit following positive geotechnical drilling and studies in 2023.
There remains potential for future mine life extensions based on the mineral resources that have not yet been converted
to mineral reserves.
Hudbay continues to mine the high-grade Pampacancha satellite deposit located approximately six kilometres from the
Constancia processing plant. Mining at the Pampacancha pit commenced in 2021 and is expected to extend until the
third quarter of 2025, resulting in continued higher copper and gold production over this period. Annual production at
the Constancia operations is expected to average approximately 101,000i tonnes of copper and 62,000i ounces of gold
over the next three years.
Current mineral reserves and resources (exclusive of reserves) for Constancia and Pampacancha as of January 1,
2024 are summarized below.
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Constancia Operations
Mineral Reserve and Resource
Estimates1,2,3,4,5
Tonnes
Cu Grade
(%)
Mo Grade
(g/t)
Au Grade
(g/t)
Ag Grade
(g/t)
Constancia Reserves
Proven 465,600,000 0.260 78 0.038 2.63
Probable 61,600,000 0.212 64 0.034 2.24
Total Proven and Probable - Constancia 527,200,000 0.254 76 0.037 2.59
Pampacancha Reserves
Proven 20,000,000 0.542 128 0.330 5.44
Probable 500,000 0.157 295 0.111 1.98
Total Proven and Probable - Pampacancha 20,500,000 0.533 132 0.324 5.36
Total Proven and Probable 547,700,000 0.265 78 0.048 2.69
Constancia Resources
Measured 78,400,000 0.213 74 0.039 2.20
Indicated 93,100,000 0.224 90 0.040 1.98
Inferred – Open Pit 29,700,000 0.233 68 0.056 2.58
Inferred – Underground 6,500,000 1.200 69 0.140 8.62
Pampacancha Resources
Inferred 700,000 0.149 65 0.098 2.71
Total Measured and Indicated 171,500,000 0.219 83 0.039 2.08
Total Inferred 36,900,000 0.402 68 0.072 3.65
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 resource estimates are based on resource pit design and do not include factors for mining recovery or dilution.
3 The open pit mineral 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 Mineral reserves are estimated using a minimum NSR cut-off of $6.40 per tonne at Pampacancha, $7.30 per tonne at Constancia
and assuming metallurgical recoveries (applied by ore type) of 86% for copper on average for the life of mine.
5 Long-term metal prices of $4.00 per pound copper, $12.00 per pound molybdenum, $1,700 per ounce gold and $23.00 per ounce
silver were used to confirm the economic viability of the mineral reserve estimates and to estimate mineral resources.
Maria Reyna and Caballito Exploration
Hudbay controls a large, contiguous block of mineral rights with the potential to host satellite mineral deposits in close
proximity to the Constancia processing facility, including the past producing Caballito property and the highly
prospective Maria Reyna property. The company commenced early exploration activities at Maria Reyna and Caballito
after completing a surface rights exploration agreement with the community of Uchucarcco in August 2022. A drill permit
application was submitted for the Maria Rey na property in November 2023, and a similar application for the Caballito
property is planned for the first half of 2024. In parallel, Hudbay continues to advance community engagement activities.
Surface mapping and geochemical sampling confirm that both Caballito and Maria Reyna host sulfide and oxide rich
copper mineralization in skarns, hydrothermal breccias and large porphyry intrusive bodies, as shown in Figure 1.
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Snow Lake Operations
Hudbay’s 100% owned Snow Lake operations in Manitoba include the Lalor gold, copper and zinc mine, the New
Britannia gold mill, the Stall base metals concentrator and several satellite deposits. Current mineral reserve estimates
in Snow Lake total 17 million tonnes with approximately 2 million ounces in contained gold, and the expected mine life
of the Snow Lake operations continues to extend until 2038. The Snow Lake operations continue to achieve higher
gold production levels due to the New Britannia mill operating at 10% above design capacity in 2023, the recent
completion of the Stall mill recovery improvement project and the implementation of several optimization initiatives at
the Lalor mine to improve the quality of ore production and minimize waste dilution. The company also increased its
land package in Snow Lake by 250% in 2023, as shown in Figure 2, and has since launched the largest Snow Lake
exploration program in the company’s history to explore the highly prospective land package for new discoveries to
maximize and extend the life of the Snow Lake operations beyond 2038.
Infill drilling at Lalor in 202 3 resulted in the successful conversion of high value gold material from inferred resources
to mineral reserves. There remains another 1.4 million ounces of gold contained in inferred resources in Snow Lake
that have the potential to maintain strong annual gold production levels beyond 2030 and further extend the mine life
in Snow Lake. The company is advancing an access drift at the nearby 1901 deposit to enable infill drilling aimed at
converting the inferred mineral resources in the gold lenses to mineral reserves.
The Snow Lake mineral reserve and mineral resource estimates include the copper-gold WIM deposit, the gold-rich 3
Zone and the zinc-rich Watts, Pen II and Talbot deposits, which have the potential to provide feed for the Stall and New
Britannia processing facilities and further extend the life of the Snow Lake operations. Hudbay is also conducting
geophysical and drilling programs on the newly acquired land in Snow Lake, including the Cook Lake claims and the
former Rockcliff claims, as discussed further below.
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 from
69,657 ounces in 2020 to 146,233 ounces in 2022, New Britannia’s first full year of production. The New Britannia mill
achieved record throughput levels averaging 1,650 tonnes per day in 2023, exceeding its design capacity of 1,500
tonnes per day, which contributed to record annual gold production of 187,363 ounces in 2023. Annual gold production
from Snow Lake is expected to average 185,000i ounces over the next three years, in line with 2023 levels.
Current mineral reserves and resources (exclusive of reserves) for Lalor, 1901 and other Snow Lake satellite deposits
as of January 1, 2024 are summarized below.
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Lalor Mine and 1901 Deposit
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)
Gold Zone Reserves
Proven – Lalor 3,263,000 5.5 0.73 0.59 29.6
Proven – 1901 102,000 2.8 1.33 1.00 19.2
Probable – Lalor 3,678,000 4.5 0.37 1.22 22.1
Probable – 1901 52,000 1.7 0.44 1.88 5.4
Total Proven and Probable - Gold 7,096,000 4.9 0.55 0.93 25.3
Base Metal Zone Reserves
Proven – Lalor 4,406,000 2.8 5.17 0.41 30.2
Proven – 1901 1,154,000 2.3 8.31 0.31 25.4
Probable – Lalor 649,000 1.9 4.63 0.35 35.1
Probable – 1901 264,000 0.8 11.45 0.31 28.1
Total Proven and Probable – Base Metal 6,474,000 2.5 5.93 0.38 29.8
Total Gold and Base Metal Zone Reserves
Proven and Probable – Lalor 11,997,000 4.0 2.46 0.70 27.8
Proven and Probable – 1901 1,573,000 2.1 8.12 0.40 24.8
Total Proven and Probable (Gold and Base Metal) 13,570,000 3.8 3.12 0.67 27.4
Gold Zone Resources
Inferred – Lalor 2,979,000 4.3 0.24 1.68 25.7
Inferred – 1901 1,605,000 5.4 0.30 0.84 16.5
Total Inferred - Gold 4,584,000 4.7 0.26 1.39 22.5
Base Metal Zone Resources
Inferred – Lalor 710,000 1.7 5.34 0.38 31.6
Inferred – 1901 334,000 1.6 5.58 0.22 30.9
Total Inferred – Base Metal 1,044,000 1.7 5.42 0.33 31.4
Total Gold and Base Metal Zone Resources
Inferred – Lalor 3,689,000 3.6 6.28 1.69 21.8
Inferred – 1901 1,939,000 4.8 1.21 0.74 19.0
Total Inferred (Gold and Base Metal) 5,628,000 4.0 4.53 1.36 20.8
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 $1,700 per ounce gold, $1.25 per pound zinc, $4.00 per pound copper and $23.00 per ounce silver with
an exchange rate of 1.33 C$/US$ were used to confirm the economic viability of the mineral reserve estimates.
5 Long-term metal prices of $1,900 per ounce gold, $1.25 per pound zinc, $4.00 per pound copper and $23.00 per ounce silver with
an exchange rate of 1.33 C$/US$ were used to estimate mineral resources.
6 Lalor mineral reserves and resources are estimated using NSR cut-off ranging from C$146 to C$173 per tonne assuming a long
hole mining method and depending on the mill destination.
7 Individual stope gold grades at Lalor were capped at 10 grams per tonne. This capping method resulted in an approximate 3%
reduction in the overall gold reserve grade at Lalor.
8 1901 mineral reserves and resources are estimated using a minimum NSR cut-off of C$166 per tonne.
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Snow Lake Regional Deposits - Gold
Mineral Reserve and Resource
Estimates1,2,3,4,5,6,7
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 $1,700 per ounce gold, $1.25 per pound zinc, $4.00 per pound copper and $23.00 per ounce silver with
an exchange rate of 1.33 C$/US$ were used to confirm the economic viability of the mineral reserve estimates.
5 WIM mineral reserves assume processing recoveries of 98% for copper, 88% for gold, and 70% for silver based on processing
through New Britannia's flotation and tails leach circuits.
6 3 Zone mineral reserves assume processing recoveries of 85% for gold based on processing through New Britannia'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).
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 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.
5 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.
6 Pen II mineral resources are estimated using a minimum NSR cut-off of C$75 per tonne.
7 The above resource estimates table includes 100% of the Talbot mineral resources reported by Rockcliff Metals Corp. in its 2020
NI 43-101 technical report published on SEDAR+.
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2024 Snow Lake Exploration Program
The planned 2024 exploration program is Hudbay’s largest Snow Lake program in the company’s history and consists
of modern geophysical programs and multi-phased drilling campaigns:
• Modern geophysics program – A majority of the newly acquired Cook Lake and former Rockcliff claims have
been untested by modern deep geophysics, which was the discovery method for the Lalor deposit. A large
geophysics program is currently underway consisting of surface electromagnetic surveys using cutting-edge
techniques that enable the team to detect targets at depths of almost 1,000 metres below surface.
• Multi-phased drilling program – The winter 2024 surface drill program is underway with eight drill rigs that
are currently focused on testing the deep extensions of the gold and copper zones at Lalor and complet ing
follow up drilling at the Lalor Northwest target, as shown in Figure 3. The drill rigs will be relocated to the Cook
Lake and Rockcliff claims later in the 2024 season to test additional geophysical targets.
The goal of the 2024 exploration program is to test mineralized extensions of the Lalor deposit and to find a new anchor
deposit within trucking distance of the Snow Lake processing infrastructure, which has the potential to extend the life
of the Snow Lake operations beyond 2038.
Advancing Access to the 1901 Deposit
The 1901 deposit was discovered by Hudbay in 2019 and is located within 1,000 metres of the existing underground
haulage ramp to Lalor. The deposit consists of a series of zinc and gold-rich lenses that were defined by surface drilling
and pre-feasibility studies conduc ted between 2019 and 2021. In early 2024, the company commenced the
development of an access drift from the existing Lalor ramp, which is expected to enable underground drill platforms
for diamond drilling to further confirm the optimal mining method to extract the base metal and gold lenses and to
convert the inferred mineral resources in the gold lenses to mineral reserves. The 1901 development and exploration
drift program is expected to take place over 2024 and 2025. For further information, please see Figure 4.
Copper Mountain Mine
Current mineral reserve estimates at the Copper Mountain mine total 367 million tonnes at 0.25% copper and 0.12
grams per tonne gold with approximately 900 thousand tonnes of contained copper and 1.4 million ounces of contained
gold. Hudbay acquired Copper Mountain as part of its acquisition of Copper Mountain Mining Corporation in June 2023
and holds a 75% interest in the mine with Mitsubishi Materials Corp. holding the remaining 25% interest . The current
mineral reserve estimates support a 21-year mine life, as previously disclosed on December 5, 2023 in the company’s
first NI 43-101 technical report in respect of the Copper Mountain mine.
As detailed in the technical report, the mine plan 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. The updated mine
plan represents an approximate 90% increase in average annual copper production and an approximate 50% decrease
in cash costs over the first 10 years compared to 2022 levels.
Hudbay’s mine plan for Copper Mountain is based on a revised resource model that was constructed using the same
methods applied at the Constancia, Copper World and Mason deposits. There exists significant upside potential for
reserve conversion and extending mine life beyond 21 years through an additional 140 million tonnes of measured and
indicated resources at 0.21% copper and 0.10 grams per tonne gold and 370 million tonnes of inferred resources at
0.25% copper and 0.13 grams per tonne gold, in each case, exclusive of mineral reserves.
Since completing the acquisition of Copper Mountain in June 2023, Hudbay has been focused on advancing its plans
to stabilize the Copper Mountain mine over the next few years to improve reliability and drive sustainable long- term
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value. This includes increasing mining activities by remobilizing the idle mining fleet from 14 trucks to 28 trucks,
accelerating stripping to access higher grades, and improving mill throughput and recoveries with a more consistent
ore feed grade and several planned mill enhancement projects. The new technical report filed in December 2023
reflects Hudbay's base case stabilization plan.
Current mineral reserves and resources (exclusive of reserves) for Copper Mountain as of January 1, 2024 are
summarized below.
Copper Mountain Mine
Mineral Reserve and Resource
Estimates1,2,3,4,5,6
Tonnes Cu Grade
(%)
Au Grade
(g/t)
Ag Grade
(g/t)
Reserves
Proven 195,000,000 0.27 0.12 0.8
Probable 172,000,000 0.22 0.11 0.6
Total proven and probable 367,000,000 0.25 0.12 0.7
Resources
Measured 41,000,000 0.21 0.09 0.7
Indicated 97,000,000 0.21 0.11 0.7
Total measured and indicated 138,000,000 0.21 0.10 0.7
Inferred 371,000,000 0.25 0.13 0.6
Note: totals may not add up correctly due to rounding.
1 Mineral resource estimates are exclusive of mineral reserves. Mineral resources are not mineral reserves as they do not have
demonstrated economic viability.
2 Mineral reserves are reported using an NSR cut-off value of $5.67 per tonne that meets a minimum 0.10% copper grade.
3 Long term metal prices of $4.00 per pound copper, $1,700 per ounce gold and $23.00 per ounce silver were used to confirm the
economic viability of the mineral reserve estimates.
4. Long term metal prices of $4.00 per pound copper, $1,650 per ounce gold and $22.00 per ounce silver were used to estimate
mineral resources.
5 Mineral resource estimate tonnes and grades constrained to a Lerch Grossman revenue factor 1 pit shell.
6 Mineral reserve and resource estimates presented on a 100% basis. Hudbay holds a 75% interest in the Copper Mountain mine.
3-Year Production Outlook
The consolidated copper and gold production guidance demonstrates the continued strong growth from the successful
completion of brownfield investments in Peru and Manitoba and the enhanced operating platform with the acquisition
of Copper Mountain. Consolidated copper production over the next three years is expected to average 153,000i tonnes,
representing an increase of 16% from 2023 levels. Consolidated gold production over the next three years is expected
to average 272,500i ounces, reflecting continued high annual gold production levels in Manitoba and a smoothing of
Pampacancha high grade gold zones in Peru over the 2023 to 2025 period, as further described below.
Peru’s three-year production guidance reflects continued higher copper and gold grades from Pampacancha into the
third quarter of 2025. Mill ore feed throughout 2024 and 2025 is expected to revert to the typical one- third from
Pampacancha and two-thirds from Constancia until the depletion of Pampacancha, unlike 2023 when a majority of the
ore feed was from Pampacancha in the second half of the year. Gold production reflects a smoothing of Pampacancha
high grade gold zones over the 2023 to 2025 period as additional high grade areas were mined in 2023 ahead of
schedule, resulting in gold production exceeding 2023 guidance levels, and other hi gh grade areas being deferred to
2025. Total expected gold production in Peru over the 2023 to 2025 period is higher than previous expectations with
2025 gold production now expected to total 80,000i, compared to 58,500i ounces in the company’s previous guidance.