TSX, NYSE – HBM 2021 No. 3 Hudbay Announces Fourth Quarter and Full Year 2020 Results and Provides Annual Guidance
TSX, NYSE – HBM
2021 No. 3
Hudbay Announces Fourth Quarter and Full Year 2020 Results and Provides
Annual Guidance
Toronto, Ontario, February 18, 2021 – Hudbay Minerals Inc. (“Hudbay” or the “ company”) (TSX, NYSE:HBM)
today released its fourth quarter and full year 2020 financial results and annual production and cost guidance . All
amounts are in U.S. dollars, unless otherwise noted.
Fourth Quarter and Full Year Operating and Financial Results
• Achieved 2020 production and unit cost guidance in Peru and Manitoba; Manitoba copper production
exceeded the top end of the guidance range and refined zinc metal production was higher than it has been
in over ten years.
• Capitalized on higher gold prices as Manitoba annual gold sales volumes increased by 24% in 2020
compared to the prior year.
• Full production resumed at 777 on November 25 following a skip hoist incident in early October; shaft repair
activities were completed well ahead of schedule and below expected costs.
• The Lalor mine and Stall concentrator both achieved record quarterly and annual production as 777
employees and equipment were redeployed to Lalor during the 777 shaft repair period.
• Constancia mine achieved excellent operational efficiencies during the quarter with a 1 0% increase in ore
mined compared to the third quarter of 2020.
• Fourth quarter net earnings were $7.4 million or $0.03 per share. Fourth quarter adjusted net loss i per share
was $0.06 and adjusted EBITDAi was $106.9 million.
• Operating cash flow before change in non -cash working capital increased to $86.1 million in the fourth
quarter of 2020, from $ 84.4 million in the third quarter, despite the temporary production interruption at 777
during the quarter.
2021 Annual Guidance and Outlook
• Consolidated copper production is forecast to increase by 7% ii in 2021, compared to 2020, with a further
increase expected in 2022 with higher grades at the Pampacancha deposit in Peru.
• Consolidated gold production is forecast to increase by 6 2%ii in 2021, compared to 2020, w ith a further
increase expected in 2022 due to the first full year of production at the New Britannia mill and
Pampacancha.
• 2021 u nit operating costs are expected to be modestly higher than 2020 with the inclusion of the New
Britannia mill in Manitoba and higher input costs in Peru . Introduced new 2021 consolidated cash cost
guidance of $0.65 to $0.80 and consolidated sustaining cash cost guidance of $2.05 to $2.30, in each case,
per pound of copper produced, net of by-product creditsi.
• Updated mine plans will be issued for each of the company’s Constancia and Snow Lake operations with the
annual mineral reserve and resource update at the end of March 2021, incorporating the results from
various optimization studies. The company will issue new t hree-year production guidance once the new
mine plans are published.
TSX, NYSE – HBM
2021 No. 3
2
• Total capital expenditures are expected to decline by 11%ii year-over-year as a majority of the Peru growth
spending was completed in 2020, while a portion of Manitoba growth spending was deferred from 2020 to
2021.
• Increased exploration spending in 2021 to drill promising targets in Arizona, Peru and Snow Lake.
Executing on Growth Initiatives
• Advanced the New Britannia gold mill refurbishment project to approximately 73% complet ion and the
project continues to track ahead of the original schedule. Total project capital is tracking approximately
$13.0 million over budget due to additions to the project scope and the impact of COVID -related costs.
Commissioning of the gold plant is expected in mid -2021, three months earlier than originally planned. The
new c opper flotation facility is on track for commissioning and ramp -up in the fourth quarter of 2021 .
Operational readiness activities are progressing as planned with underground development of Lalor’s gold-
rich lenses well-advanced in preparation for the start-up of New Britannia.
• Successfully completed the Consulta Previa consult ation process for Pampacancha and received the final
mining permit for the development and operation of the mine. Pre -development activities commenced in
early January and pre -stripping activities are expected to begin once the remaining individual land us er
agreement has been completed.
• Advanced the appeal of the unprecedented Rosemont court decision with oral arguments presented on
February 1 st and continued to evaluate next steps for the project and advance drilling activities on the
company’s land package.
“We achieved all of our production and operating cost targets in 2020, continuing our trend of strong operating and
financial performance while executing on our growth initiatives ,” said Peter Kukielski, President and Chief Executive
Officer. “Our Peru operations continued to perform well despite COVID -19 challenges and the team successfully
completed the Consulta Previa process for Pampacancha. Our Manitoba operations demonstrated strength and
resilience as they remedied the 777 shaft incident quickly and efficien tly, while confirming the opportunity to increase
the Lalor mine production rate in the long -term. The New Britannia project remains on track for first gold pour in the
third quarter of 2021 . While 2021 remains a year of investment for Hudbay, it is also t he year in which we expect to
start to see the benefits of these high -return investments as we grow our production through Pampacancha and New
Britannia, and create significant value for our stakeholders.”
Summary of Fourth Quarter Results
Consolidated copper production in the fourth quarter of 2020 was 27,278 tonnes, a 7% increase from the third quarter
of 2020, primarily as a result of higher mill throughput and recoveries at Constancia and higher copper grades and
recoveries in Manitoba, despite the temporary production interruption at 777. Consolidated gold production increased
by 11% compared to the third quarter of 2020 due to higher grades at Lalor and higher recoveries at the Stall mill.
Consolidated zinc production in the fourth quarter was lower than the third quarter of 2020 due to the 777 shaft
incident resulting in the suspension of hoisting operations for six weeks . The production of refined zinc metal
increased quarter-over-quarter as the zinc plant continued to process available zinc concentrate inventories during
the 777 shaft repair period.
In the fourth quarter of 2020, consolidated cash cost per pound of coppe r produced, net of by -product creditsi, was
$0.43, a decrease compared to $0. 65 in the third quarter due to higher copper production and higher by-product
revenue, partially offset by higher operating costs . Incorporating cash sustaining capital, capitalized exploration,
royalties, selling, administrative and regional costs, consolidated all -in sustaining cash cost per pound of copper
produced, net of by-product creditsi, in the fourth quarter of 2020 was $2.24, which was relatively unchanged from the
third quarter.
TSX, NYSE – HBM
2021 No. 3
3
Cash generated from operating activities in the fourth quarter of 2020 increased to $121.1 million compared to $ 77.9
million in the third quarter of 2020. Operating cash flow before change in non -cash working capital was $86.1 million
during the fourth quarter of 2020, reflecting a slight increase from the third quarter . The increase in cash generated
from operating activities is primarily the result of higher realized copper and zinc prices and working capital changes
during the quarter.
Net earnings and earnings per share in the fourth quarter of 2020 were $7.4 million and $0.03, respectively,
compared to a net loss and loss per share of $24.0 million and $0.09, respectively, in the third quarter of 2020. Fourth
quarter earnings benefited from higher realized prices for base metals which was partially offset by lower sales
volumes of copper. In addition, a $28.0 million mark-to-market net gain on certain financial instruments was recorded,
including a $40.3 million non -cash gain on the revaluation of the embedded derivative on the senior notes due in
2025. Partially offsetting these gains was the accounting effect related to the 777 production interruption. This
resulted in fixed overhead production costs of $11.7 million, which would normally be capitalized to inventories, being
immediately expensed as part of cost of sales with no corresponding revenue benefit.
Adjusted net loss i and adjusted EBITD Ai in the fourth quarter of 2020 were $ 16.4 million, or $0.06 per share, and
$106.9 million, respectively , a fter adjusting for the 777 fixed overhead costs and the net mark -to-market gain on
financial instruments, among other items . This compares to an adjus ted net loss i and adjusted EBITD Ai of $ 25.4
million, or $0.10 per share, and $96.1 million, respectively, in the third quarter of 2020. The favourable movements in
adjusted EBITDAi and adjusted net loss, as compared to the third quarter of 2020, primarily included the same factors
that benefited net earnings.
Summary of Full Year Results
On a consolidated basis, Hudbay’s copper, zinc and precious metals production met 2020 guidance ranges.
Production of copper in Manitoba exceeded the top end of the guidance range, while copper production in Peru was
within the revised guidance range. When compared to 2019 production levels, 2020 copper production in Peru was
lower due to lower copper grades , as well as an eight -week suspension of Constancia operations due to a
government declared state of emergency at the onset of the COVID -19 pandemic (which caused the company to
update Peru’s guidance with the second quarter results). Combined unit costs in Peru and Manitoba were within 2020
guidance ranges. Total capital expenditures were above 2020 guidance in large part due to costs associated with
individual land user agreements that were not included in the company's initial growth capital guidance for Peru, as
previously disclosed, due to the ongoing nature of the negotiations.
Consolidated cash cost per pound of copper produced, net of by -product credits, was $0.60 in 2020, a decrease
compared to $0.83 in 2019 , mainly as a result of increased by -product credit revenues, partially offset by lower
copper production from lower grades at Constancia and reduced Constancia production from the eight -week
suspension of operations. Incorporating cash sustaining capital, capitalized exploration, royalties, sell ing,
administrative and regional costs, consolidated all -in sustaining cash cost per pound of copper produced, net of by -
product credits, in 2020 was $2.16, which increased from $1.86 in 2019, driven mainly by increased cash sustaining
capital expenditures and the same factors noted above affecting consolidated cash costs.
Cash generated from operating activities decreased to $239.5 million in 2020 from $310.9 million in 2019. Operating
cash flow before change in non ‑cash working capital decrea sed to $241.9 million from $307.3 million in 2019. The
decrease is the result of significantly lower copper sales volumes due to an eight -week suspension of Constancia
operations in Peru following a government declared state of emergency and a six -week production interruption at the
777 mine in Manitoba. The lower copper sales volumes were only partially offset by higher realized sales prices for
copper and precious metals.
TSX, NYSE – HBM
2021 No. 3
4
Net loss and loss per share for 2020 were $144.6 million and $0.55, respectively, compared to a net loss and loss per
share of $343.8 million and $1.32, respectively, in 2019. The 2019 loss was mainly caused by an after-tax impairment
charge of $242.1 million recorded in Hudbay’s investment in the Rosemont project. Gross margins declined in 2020 in
part due to multi -week operational suspensions at Constancia and 777 causing certain fixed overhead production
costs to be immediately expensed as part of cost of sales with no corresponding revenue benefit.
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 Reporting Measures” section of this news release.
Consolidated Financial Performance Three Months Ended
Dec 31, 2020 Sep. 30, 2020 Dec. 31, 2019
Revenue $000s 322,290 316,108 324,485
Cost of sales $000s 287,923 276,830 298,852
Earnings (loss) before tax $000s 911 (23,944) (42,352)
Earnings (loss) $000s 7,406 (23,955) (1,455)
Basic and diluted earnings (loss) per share $/share 0.03 (0.09) (0.01)
Adjusted earnings (loss) per share1 $/share (0.06) (0.10) (0.09)
Operating cash flow before change in non-
cash working capital
$ millions 86.1 84.4 69.1
Adjusted EBITDA1 $ millions 106.9 96.1 82.2
Year Ended
Dec 31, 2020 Dec. 31, 2019
Revenue $000s 1,092,418 1,237,439
Cost of sales $000s 1,053,418 1,085,897
Earnings (loss) before tax $000s (179,089) (452,763)
Earnings (loss) $000s (144,584) (343,810)
Basic and diluted earnings (loss) per share $/share (0.55) (1.32)
Adjusted earnings (loss) per share1 $/share (0.46) (0.18)
Operating cash flow before change in non-
cash working capital
$ millions 241.9 307.3
Adjusted EBITDA1 $ millions 306.7 358.5
1 Adjusted 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 Reporting Measures” section of this news release.
Financial Condition ($000s) Dec. 31, 2020 Dec. 31, 2019
Cash and cash equivalents 439,135 396,146
Total long-term debt 1,135,675 985,255
Net debt1 696,540 589,109
Working capital 306,888 271,284
Total assets 4,666,645 4,461,057
Equity 1,699,806 1,848,123
TSX, NYSE – HBM
2021 No. 3
5
Consolidated Operational Performance Three Months Ended
Dec. 31, 2020 Sep. 30, 2020 Dec. 31, 2019
Contained metal in concentrate produced1
Copper tonnes 27,278 25,395 32,422
Gold ounces 32,376 29,277 32,712
Silver ounces 730,679 671,685 930,137
Zinc tonnes 25,843 30,570 30,592
Molybdenum tonnes 333 392 372
Precious metals2 ounces 40,586 36,824 46,000
Payable metal in concentrate sold
Copper tonnes 22,963 25,903 33,715
Gold ounces 35,179 30,605 30,344
Silver ounces 762,384 705,495 909,423
Zinc3 tonnes 28,431 26,520 28,001
Molybdenum tonnes 457 313 199
Precious metals2 ounces 43,745 38,532 43,336
Cash cost4 $/lb 0.43 0.65 0.90
Sustaining cash cost4 $/lb 1.97 2.02 2.11
All-in sustaining cash cost4 $/lb 2.24 2.25 2.22
Year Ended
Dec. 31, 2020 Dec. 31, 2019
Contained metal in concentrate produced1
Copper tonnes 95,333 137,179
Gold ounces 124,622 114,692
Silver ounces 2,750,873 3,585,330
Zinc tonnes 118,130 119,106
Molybdenum tonnes 1,204 1,272
Precious metals2 ounces 155,531 165,911
Payable metal in concentrate sold
Copper tonnes 88,888 128,519
Gold ounces 122,949 108,999
Silver ounces 2,585,586 3,452,926
Zinc3 tonnes 109,347 104,319
Molybdenum tonnes 1,321 1,186
Precious metals2 ounces 152,001 158,327
Cash cost4 $/lb 0.60 0.83
Sustaining cash cost4 $/lb 1.93 1.72
All-in sustaining cash cost4 $/lb 2.16 1.86
1 Metal reported in concentrate is prior to deductions associated with smelter contract terms.
2 Precious metals production includes gold and silver production on a gold-equivalent basis. For 2019, silver is converted to gold at a
ratio of 70:1. For 2020, silver is converted to gold at a ratio of 89:1.
3 Includes 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.
TSX, NYSE – HBM
2021 No. 3
6
Peru Operations Review
Peru Operations Three Months Ended Year Ended
Dec. 31,
2020
Sep. 30,
2020
Dec. 31,
2019
Dec. 31,
2020
Dec. 31,
2019
Ore mined1 tonnes 9,313,784 8,455,668 8,049,063 27,529,950 33,308,369
Copper % 0.31 0.31 0.41 0.32 0.43
Gold g/tonne 0.03 0.03 0.04 0.03 0.04
Silver g/tonne 2.61 2.55 3.87 2.75 3.76
Molybdenum 0.01 0.02 0.02 0.02 0.02
Ore milled tonnes 7,741,714 7,480,655 7,474,136 26,297,318 31,387,281
Copper % 0.33 0.33 0.42 0.34 0.42
Gold g/tonne 0.03 0.03 0.04 0.03 0.04
Silver g/tonne 2.74 2.68 3.86 2.87 3.64
Molybdenum 0.02 0.02 0.02 0.02 0.02
Copper recovery % 85.3 83.3 85.6 83.0 85.7
Gold recovery % 52.7 51.6 50.0 49.8 48.1
Silver recovery % 70.1 66.7 68.2 66.9 68.2
Molybdenum recovery 28.4 30.4 30.8 29.4 26.5
Contained metal in concentrate
Copper tonnes 21,554 20,803 26,659 73,150 113,825
Gold ounces 3,689 3,333 5,007 12,395 19,723
Silver ounces 477,775 430,208 631,774 1,622,972 2,504,769
Molybdenum tonnes 333 392 372 1,204 1,272
Precious metals2 ounces 9,058 8,167 14,033 30,630 55,506
Payable metal sold
Copper tonnes 18,583 21,654 28,430 68,506 106,184
Gold ounces 3,297 3,753 4,824 10,986 18,956
Silver ounces 480,843 433,595 666,839 1,518,548 2,452,496
Molybdenum tonnes 457 313 199 1,321 1,186
Combined unit
operating cost3,4
$/tonne 10.17 9.85 10.20 9.46 9.50
Cash cost4 $/lb 1.47 1.54 1.36 1.45 1.16
Sustaining cash cost4 $/lb 2.58 2.29 2.17 2.20 1.65
1 Reported tonnes and grade for ore mined are estimates based on mine plan assumptions and may not reconcile fully to ore milled.
2 Precious metals production includes gold and silver production on a gold-equivalent basis. For 2019, silver is converted to gold at a
ratio of 70:1. For 2020, silver is converted to gold at a ratio of 89:1.
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 Combined unit cost, cash cost and sustaining cash cost are non-IFRS financial performance measure s with no standardized
definition under IFRS. For further information, please see the “Non -IFRS Financial Reporting Measures” section of this news
release.
The Constancia team continues to deliver strong operating performance despite the environment of strict ongoing
COVID-19 measures and controls. Hudbay continues to work collaboratively with the local health authorities to
ensure the company’s workforce and partners adhere to COVID -19 protocols while continuing to operate safely and
efficiently. Full year production of all metals and unit operating costs at Constancia achieved the revised guidance
ranges for 2020.
TSX, NYSE – HBM
2021 No. 3
7
During the quarter, the Constancia mine produced 21,554 tonnes of copper, 9,058 ounces of precious metals and
333 tonnes of molybdenum. Production was higher than the third quarter of 20 20 as a result of the ramp-up to full
production after the temporary suspension of operations . Full year 2020 production of copper, gold and silver were
36%, 37%, and 35% lower, respectively, compared to 2019 due to lower grades, in line with mine plan , and the
temporary suspension of operations in the second quarter of 2020.
The Constancia mine achieved excellent operational efficiencies during the quarter with a 10% increase in ore mined
compared to the third quarter of 2020. Ore milled during the fourth quarter of 2020 was 3% higher compared to the
third quarter due to the deferral of a fourth quarter plant maintenance shutdown to January 2021. Milled grades for all
metals in the fourth quarter were relatively consistent with third quarter levels. Recoveries of copper, gold and silver
were all higher than the third qua rter due to ongoing recovery optimization efforts and actively managing the
characteristics of the ore feed.
Combined mine, mill and G&A unit operating costs in the fourth quarter of 2020 were $10.17/lb, and higher than the
third quarter of 2020, primarily due to higher mining costs during the quarter. Full year combined unit operating costs
were in line with 2019 as lower production, caused by an eight -week suspension of operations, was offset by a
corresponding decrease in mine, mill and general and administrative costs.
Peru’s cash cost per pound of copper produced, net of by -product credits, in the fourth quarter of 2020 was $1.47,
lower than the previous quarter primarily due to higher by -product credits and higher copper production . Peru’s
sustaining cash cost per pound of copper produced, net of by -product credits, for the fourth quarter 2020 increased
compared to the prior quarter due to capitalized exploration related to option payments for properties surrounding
Constancia and elevated sustaining capital spending in the fourth quarter.
Peru cash cost per pound of copper produced, net of by -product credits, for the full year 2020 was $1.45, and 25%
higher than the full year 2019 primarily due to an eight-week suspension of Constancia operations during the second
quarter and lower grades as the company progresses through the mine plan . Peru sustaining cash cost per pound of
copper produced, net of by -product credits, was $ 2.20 for the full year 2020. This represents a 33% increase from
2019 primarily due to the same factors affecting cash costs.
TSX, NYSE – HBM
2021 No. 3
8
Manitoba Operations Review
Manitoba Operations Three Months Ended Year Ended
Dec. 31,
2020
Sep. 30,
2020
Dec. 31,
2019
Dec. 31,
2020
Dec. 31,
2019
Lalor ore mined tonnes 468,101 357,213 390,140 1,654,240 1,536,780
Copper % 0.80 0.66 0.80 0.74 0.75
Zinc % 5.54 5.98 6.20 5.73 6.36
Gold g/tonne 2.79 2.28 2.63 2.51 2.16
Silver g/tonne 24.96 21.23 28.38 25.31 25.51
777 ore mined tonnes 164,856 264,905 269,342 991,576 1,109,782
Copper % 1.89 0.98 1.17 1.40 1.37
Zinc % 2.98 3.95 3.33 3.88 3.22
Gold g/tonne 1.85 2.01 1.52 1.90 1.61
Silver g/tonne 21.64 24.25 18.52 24.13 18.67
Stall Concentrator:
Ore milled tonnes 372,624 335,739 310,622 1,412,751 1,290,300
Copper % 0.79 0.68 0.80 0.73 0.73
Zinc % 5.47 6.11 6.24 5.76 6.39
Gold g/tonne 2.88 2.35 2.60 2.55 2.13
Silver g/tonne 24.43 22.08 28.12 25.37 25.48
Copper recovery % 87.1 84.0 85.9 86.2 85.9
Zinc recovery % 90.9 92.7 90.7 91.9 91.1
Gold recovery % 59.5 57.4 61.1 60.0 56.8
Silver recovery % 60.3 57.5 62.9 60.4 60.4
Flin Flon Concentrator:
Ore milled tonnes 225,663 322,156 374,529 1,205,314 1,362,006
Copper % 1.59 0.99 1.11 1.28 1.27
Zinc % 3.87 4.07 4.05 4.21 3.78
Gold g/tonne 1.99 1.99 1.75 1.96 1.72
Silver g/tonne 22.65 24.01 20.56 24.26 19.84
Copper recovery % 88.1 83.9 86.9 86.0 88.0
Zinc recovery % 83.9 87.9 85.8 85.5 85.5
Gold recovery % 56.6 55.3 56.1 56.0 59.4
Silver recovery % 46.5 42.0 49.2 45.9 50.8
Total contained metal in concentrate
Copper tonnes 5,724 4,592 5,763 22,183 23,354
Zinc tonnes 25,843 30,570 30,592 118,130 119,106
Gold ounces 28,687 25,994 27,705 112,227 94,969
Silver ounces 252,904 241,477 298,363 1,127,901 1,080,561
Precious metals1 ounces 31,529 28,657 31,967 124,900 110,406
Total payable metal sold
Copper tonnes 4,380 4,249 5,285 20,382 22,335
Zinc2 tonnes 28,431 26,520 28,001 109,347 104,319
Gold ounces 31,882 26,852 25,520 111,963 90,043
Silver ounces 281,541 271,900 242,584 1,067,038 1,000,430
Combined unit
operating cost3,4
C$/tonne 140 126 128 132 134
Cash cost4 $/lb (3.48) (3.41) (1.26) (2.20) (0.75)