TSX, NYSE – HBM 2024 No. 13 Hudbay Announces Second Quarter 2024 Results; Production Guidance Reaffirmed and Cash Cost Guidance Improved
TSX, NYSE – HBM
2024 No. 13
Hudbay Announces Second Quarter 2024 Results; Production Guidance
Reaffirmed and Cash Cost Guidance Improved
Toronto, Ontario, August 13, 2024 – Hudbay Minerals Inc. (“Hudbay” or the “ company”) (TSX, NYSE: HBM)
today released its second quarter 2024 financial results. 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.
“The continued execution of our operational plans in the second quarter has positioned us well to achieve our 2024
production guidance, and our exposure to gold by-products and strong cost control have allowed us to improve our
2024 cash cost guidance,” said Peter Kukielski, President and Chief Executive Officer. “ Our strong and diversified
operating base continues to generate free cash flow driven in part by efficient milling performance in Peru and Manitoba.
We are also continuing to execute our British Columbia stabilization plans and planned stripping programs in Peru and
British Columbia to unlock higher copper and gold grades in the near-term. This has led to robust EBITDA generation
over the past 12 months, which together with our recent successful equity offering, has allowed us to significantly
accelerate our deleveraging efforts and transform our balance sheet. We are now even better positioned to continue to
advance our many growth initiatives to unlock significant upside potential in our pipeline and further enhance our copper
and gold exposure.”
Delivered In-line Second Quarter Operating and Financial Results; Production Guidance Reaffirmed and Cash
Cost Guidance Improved
• Achieved consolidated copper production of 28,578 tonnes and gold production of 58,614 ounces in the
second quarter of 2024, in line with quarterly production cadence expectations for 2024.
• Enhanced operating platform delivered a 32% increase in copper production and a 20% increase in gold
production over the second quarter of 2023 ii, reflecting the benefits of a larger diversified operating platform
with the addition of Copper Mountain and the continued execution of operational efficiencies across the
business.
• Strong cost control with consolidated cash costi and sustaining cash costi per pound of copper produced, net
of by-product creditsi, in the second quarter of 2024 of $1.14 and $2.65, respectively, in alignment with the
cadence of costs expected in 2024.
• Reaffirmed full year 2024 consolidated production guidance for all metals including 137,000 to 176,000 tonnes
of copper and 263,000 to 319,000 ounces of gold as the company expects stronger production in the second
half of 2024 in accordance with the mine production profile.
• Improved 2024 annual operating cost guidance with decreased consolidated cash cost i guidance range of
$0.90 to $1.10 per pound , a result of meaningful exposure to gold by -product credits and continued strong
cost control.
• Peru operations continued to benefit from strong mill throughput, averaging approximately 85,000 tonnes per
day in the second quarter despite a planned semi -annual mill maintenance shutdown. The Pampacancha
stripping program to advance to high er grades later this year is well underway. The reduced mining from
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Pampacancha resulted in 19,217 tonnes of copper and 10,672 ounces of gold produced in the second quarter
of 2024, in line with quarterly cadence expectations. Peru cash cost per pound of copper produced, net of by-
product creditsi, in the second quarter was $1.78, an expected increase from the first quarter given lower
planned production levels, and a 17% decrease compared to the second quarter of 2023.
• Manitoba operations produced 43,488 ounces of gold in the second quarter of 2024 as New Britannia
continues to operate well above nameplate capacity and budgeted throughput levels. Manitoba cash cost per
ounce of gold produced, net of by-product creditsi, was $771 during the second quarter of 2024, similar to the
first quarter, and a decrease of 30% compared to the same quarter last year.
• British Columbia operations produced 6,719 tonnes of copper at a cash cost per pound of copper produced,
net of by-product creditsi, of $2.67 in the second quarter. Cash cost improved by 23% over the first quarter,
reflecting ongoing operational stabilization efforts as mine stripping activities are accelerated and mill
improvement initiatives are underway at Copper Mountain.
• Achieved revenue of $425.5 million and operating cash flow before change in non-cash working capital of
$122.0 million in the second quarter of 2024.
• Second quarter net loss attributable to owners and loss per share attributable to owners were $16.6 million
and $0.05, respectively. After adjusting for items on a pre-tax basis such as a non -cash gain of $2.7 million
related to a quarterly revaluation of the company’s closed site environmental reclamation provision, a $10.7
million revaluation loss related to the gold prepayment liability, unrealized strategic gold and copper hedges
and investments and a $2.1 million write-down of PP&E, among other items, second quarter adjusted earningsi
per share attributable to owners was nil.
• Net loss attributable to owners of $16.6 million in the second quarter was meaningfully impacted by tax
expense of $20.8 million despite having earnings before tax of only $0.4 million. The elevated t ax expense
was due to mining taxes that are calculated based on taxable mining profits in each operating jurisdiction, the
limited deductibility of certain expenses and foreign exchange fluctuations on deferred tax balances.
• Adjusted EBITDAi was $145.0 million during the second quarter of 2024.
• Cash and cash equivalents and short -term investments increased by $274.0 million to $523.8 million during
the first half of 2024 due to a successful equity offering and strong operating cash flows bolstered by higher
copper and gold prices, enabling a $405.9 million reduction in net debti during the first half of 2024.
Accelerated Deleveraging and Transformed Balance Sheet
• Hudbay’s unique copper and gold diversification in Peru and North America provides exposure to higher
copper and gold prices and attractive free cash flow generation.
• Achieved trailing 12 month adjusted EBITDAi of $824.3 million, a substantial increase from $407.1 million for
the 12 months ending June 30, 2023.
• Completed successful equity offering on May 24, 2024 for gross proceeds of $402.5 million and net proceeds
of $386.2 million, net of transaction costs, to accelerate growth and deleveraging.
• Significantly accelerated deleveraging efforts. Repaid all $90.0 million of advances outstanding on the senior
secured credit facilities during the second quarter of 2024 and made open market purchases of approximately
$34.1 million of the company’s senior unsecured notes in June 2024, at a discount . Long-term debt reduced
to $1,155.6 million at June 30, 2024 from $1,278.6 million at March 31, 2024.
• Reduced net debti to $631.8 million in the second quarter of 2024, reflecting a reduction of $405.9 million over
the first half of 2024.
• The increase in cash and reduction in long-term debt significantly reduced net debt to adjusted EBITDA i to
0.8x at June 30, 2024 compared to 1.6x at the end of 2023. Achieved the targeted 1.2x net debt to adjusted
EBITDAi ratio outlined in the three prerequisites plan (the “3-P plan”) for advancing Copper World well ahead
of schedule.
• Deleveraging efforts continued into the third quarter of 2024 with an additional $48.5 million of open market
purchases of the company’s senior unsecured notes in July and August.
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• Scheduled to complete the final payment under the gold prepay liability in August 2024, which was the
financing instrument used to fund the refurbishment of the New Britannia gold mill. The elimination of the gold
prepay will further increase the company’s exposure to higher gold production in Snow Lake.
• Total liquidity substantially increased by 65% to $948.5 million at June 30, 2024 from $573.7 million at the end
of 2023.
Continued Execution of Growth Initiatives to Further Enhance Copper and Gold Exposure
• Successfully ratified multi-year agreements with the unions representing members of Hudbay’s workforce in
Peru and Manitoba, with no disruption to operations, demonstrating the company’s focus on working closely
with its employees and community stakeholders to ensure aligned economic and social benefits.
• Stripping program for the next mining phase at Pampacancha is underway and is expected to lead to
significantly higher copper and gold grades in the fourth quarter of 2024, which together with maintaining
strong operating performance at Constancia is expected to continue to generate meaningful free cash flow in
Peru.
• The New Britannia mill continued to exceed expectations, driving higher gold production in Manitoba. The mill
achieved record throughput levels of nearly 2,100 tonnes per day in June and averaged 1,850 tonnes per day
in the second quarter, exceeding its or iginal design capacity of 1,500 tonnes per day and its 2024 budgeted
capacity of 1,800 tonnes per day due to the successful implementation of process improvement initiatives and
effective preventative maintenance measures.
• Post-acquisition plans to stabilize the Copper Mountain operations remain in progress with a focus on mining
fleet ramp-up activities, accelerated stripping and increasing mill reliability. Higher mill availability of 94% and
better-than-planned copper recoveries of 82% were achieved in the second quarter of 2024.
• The development of an access drift to the 1901 deposit in Snow Lake remains on track to reach mineralization
in early 2025 and is intended to enable confirmation of the optimal mining method for the deposit and
underground drilling to further evaluate the orebody and upgrade inferred gold resources to reserves.
• Continued to progress the 3- P plan for sanctioning Copper World, with transformed balance sheet nearing
targeted levels and remaining key state permits progressing on track and expected in 2024.
• Drill permitting for highly prospective Maria Reyna and Caballito properties near Constancia continues to
advance through the multi -step regulatory process with the environmental impact assessment application
approved for Maria Reyna in June and the Caballito application progressing through the review stage.
• Results from the winter 2024 exploration program in Snow Lake confirm two mineralized zones located 400
metres northwest of Lalor with an intersection of 9 metres grading 2.88% copper and 6.27 grams per tonne
gold. Also identified follow-up targets for a summer 2024 drill program to test new geophysical anomalies ,
complete follow -up drilling at Lalor Northwest and complete regional drilling at the Snow Lake satellite
properties.
• Continuing to advance Flin Flon tailings reprocessing opportunities through metallurgical test work and early
economic evaluation to assess the possibility of producing critical minerals and precious metals while reducing
the environmental footprint.
• Published 2023 annual sustainability report in June 2024, demonstrating meaningful progress towards
achieving Hudbay’s long-term sustainability goals and commitments with many 2023 activities focused on “our
people, our communities and our planet”.
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Summary of Second Quarter Results
Consolidated copper production of 28,578 tonnes in the second quarter of 2024 declined from the first quarter of 2024
but was in line with mine plan expectations. C onsolidated gold production of 58,614 ounces in the second quarter
declined from the strong levels achieved in the first quarter but was in line with mine plan expectations. Production was
impacted by lower planned grades in Peru and Manitoba, a planned semi -annual mill maintenance shutdown in Peru
and the execution of planned stripping programs at Pampacancha and Copper Mountain to access higher grades.
In the second quarter of 2024, consolidated cash cost per pound of copper produced, net of by -product creditsi, was
$1.14, compared to $0.16 in the first quarter of 2024. This change was mainly the result of lower gold by-product credits
from lower gold sales volumes as well as lower copper production. Consolidated sustaining cash cost per pound of
copper produced, net of by -product creditsi, was $2.65 in the second quarter of 2024 compared to $1. 32 in the prior
quarter, due to the same reasons outlined above as well as higher sustaining capital expenditures in line with company
guidance expectations.
During the second quarter of 2024, cash generated from operating activities of $138.5 million was relatively unchanged
from the first quarter of 2024. Operating cash flow before change in non- cash working capital of $122.0 million in the
second quarter of 2024 was lower than the first quarter. Operating cash flow before change in non-cash working capital
was impacted by lower planned production levels, partially offset by higher realized metal prices and continued strong
operational cost performance across the business. It was also impacted by lower copper sales volumes in Peru and
lower zinc sales volumes in Manitoba due to timing of shipments. These cash flows benefited from effective working
capital management as the company reduced stockpile while collecting on its receivables. Adjusted EBITDA i was
$145.0 million in the second quarter compared to $214.2 million in the first quarter of 2024 and was impacted by the
same factors affecting operating cash flow as noted above.
Net loss attributable to owners and loss per share attributable to owners in the second quarter of 2024 were $16.6
million and $0.05, respectively, compared to net earnings attributable to owners and earnings per share attributable to
owners of $59.4 million and $0.17, respectively, in the first quarter 2024. Net loss attributable to owners of $16.6 million
was meaningfully impacted by tax expense of $20.8 million despite having earnings before tax of only $0.4 million in
the quarter. The elevated tax expense was due to mining taxes that are calculated based on taxable mining profits in
each operating jurisdiction, the limited deductibility of certain expenses and foreign exchange fluctuations on deferred
tax balances. Adjusted net earnings attributable to ownersi and adjusted net earnings per share attributable to ownersi
in the second quarter of 2024 were $0.1 million and nil per share, respectively , after adjusting for a $10.7 million
revaluation loss related to the gold prepayment liability and revaluation of the company’s strategic gold and copper
hedges and investments, an $8.8 million revaluation of share-based compensation due to a higher share price and a
$2.1 million write-down of PP&E, among other items.
As at June 30, 2024, total liquidity was $948.5 million, including $483.8 million in cash and cash equivalents, $40.0
million in short-term investments as well as undrawn availability of $424.7 million under the company’s revolving credit
facilities. Net debti declined substantially by $362.4 million during the second quarter of 2024 to $631.8 million as part
of the company’s efforts to deleverage the balance sheet. This was driven by the free cash flow generation from the
operations and the equity offering which contributed cash of $386.2 million, net of transaction and issuance costs.
Some of these funds were utilized to repay all $90.0 million of debt outstanding on the senior secured credit facilities
as at March 31, 2024 and to repurchase and retire approximately $34.1 million of the company’s senior unsecured
notes. As a result, Hudbay has made significant progress towards achieving the deleveraging targets outlined in the 3-
P plan for sanctioning Copper World.
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1 Net debt and net debt 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 interim financial statements.
3 Equity attributable to owners of the company.
4 Net debt to adjusted EBITDA for the 12 month period.
Consolidated Financial Performance Three Months Ended
Jun. 30, 2024 Mar. 31, 2024 Jun. 30, 20233
Revenue $000s 425,520 524,989 312,166
Cost of sales $000s 347,893 373,035 289,273
Earnings (loss) before tax $000s 441 67,750 (30,731)
Net (loss) earnings $000s (20,377) 18,535 (14,932)
Net (loss) earnings attributable to owners $000s (16,583) 22,358 (14,932)
Basic earnings (loss) per share1 $/share (0.05) 0.06 (0.05)
Adjusted earnings (loss) per share1,2 $/share 0.00 0.17 (0.07)
Operating cash flow before change in non-
cash working capital
$ millions 122.0 147.5 55.9
Adjusted EBITDA2 $ millions 145.0 214.2 81.2
1 Attributable to owners of the company.
2 Adjusted earnings (loss) per share attributable to owners 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.
3 Following completion of the Copper Mountain acquisition on June 20, 2023, the company’s financial performance has not been
materially affected by Copper Mountain's operations with no revenues or corresponding cost of sales recorded during the 10-day stub
period from the date of acquisition to the end of the second quarter of 2023.
Consolidated Financial Condition ($000s) Jun. 30, 2024 Mar. 31, 2024 Dec. 31, 2023
Cash and cash equivalents and short-term investments 523,767 284,385 249,794
Total long-term debt 1,155,575 1,278,587 1,287,536
Net debt1 631,808 994,202 1,037,742
Working capital2 423,088 200,850 135,913
Total assets 5,442,422 5,231,283 5,312,634
Equity3 2,482,545 2,107,532 2,096,811
Net debt to adjusted EBITDA1,4 0.8 1.3 1.6
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Consolidated Production and Cost Performance1 Three Months Ended
Jun. 30, 2024 Mar. 31, 2024 June. 30, 2023
Contained metal in concentrate and doré produced2
Copper tonnes 28,578 34,749 21,715
Gold ounces 58,614 90,392 48,996
Silver ounces 738,707 947,917 612,310
Zinc tonnes 8,087 8,798 8,758
Molybdenum tonnes 369 397 414
Payable metal sold
Copper tonnes 25,799 33,608 23,078
Gold3 ounces 61,295 108,081 47,533
Silver3 ounces 667,036 1,068,848 805,448
Zinc tonnes 5,133 6,119 8,641
Molybdenum tonnes 347 415 314
Consolidated cash cost per pound of copper produced4
Cash cost $/lb 1.14 0.16 1.60
Sustaining cash cost $/lb 2.65 1.03 2.73
All-in sustaining cash cost $/lb 3.07 1.32 2.98
1 Includes 100% of Copper Mountain mine production. Hudbay owns 75% of Copper Mountain mine. As Copper Mountain was acquired
on June 20, 2023, the production for the three months ended June 30, 2023 represents the 10-day stub period following the acquisition
through to the end of the second quarter of 2023.
2 Metal reported in concentrate is prior to deductions associated with smelter contract terms.
3 Includes total payable gold and silver in concentrate and in doré 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
Performance Measures” section of this news release.
Production Guidance Reaffirmed and Cash Cost Guidance Improved
Hudbay has reaffirmed its full year 2024 consolidated production guidance for all metals, including 137,000 to 176,000
tonnes of copper and 263,000 to 319,000 ounces of gold as the company anticipates stronger production in the second
half of 2024 in accordance with the mine production profile. The company expects 2024 consolidated copper production
to be below the midpoint of the guidance range, while 2024 consolidated gold production is expected to be above the
midpoint of the guidance range. This is a result of a combination of lower -than-expected grades and timing impacts
from heavy rains in Peru, as well as the ongoing ramp-up of stabilization efforts at Copper Mountain, offset by the
continued strong operational performance in Manitoba driven by New Britannia performance and grades exceeding the
company’s expectations.
The company is improving its 2024 annual consolidated cash cost guidance range to $0.90 to $1.10 per pound from
the original guidance range of $1.05 to $1.25 per pound, as a result of meaningful exposure to gold by-product credits
and continued strong cost control. Hudbay has reaffirmed all other 2024 guidance metrics.
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Peru Operations Review
Peru Operations Three Months Ended
Jun. 30, 2024 Mar. 31, 2024 Jun. 30, 2023
Constancia ore mined1 tonnes 5,277,654 2,559,547 3,647,399
Copper % 0.29 0.31 0.31
Gold g/tonne 0.03 0.04 0.04
Silver g/tonne 2.50 2.79 2.49
Molybdenum % 0.01 0.01 0.01
Pampacancha ore mined1 tonnes 1,288,789 2,214,354 2,408,495
Copper % 0.41 0.56 0.36
Gold g/tonne 0.20 0.32 0.34
Silver g/tonne 3.83 4.64 2.81
Molybdenum % 0.02 0.02 0.02
Total ore mined tonnes 6,566,443 4,773,901 6,055,894
Strip ratio4 1.74 1.95 1.74
Ore milled tonnes 7,718,962 8,077,962 7,223,048
Copper % 0.30 0.36 0.31
Gold g/tonne 0.07 0.15 0.09
Silver g/tonne 2.85 3.48 2.78
Molybdenum % 0.01 0.01 0.01
Copper recovery % 83.1 84.9 80.0
Gold recovery % 61.4 73.4 61.1
Silver recovery % 63.9 70.7 65.1
Molybdenum recovery % 46.3 43.2 40.5
Contained metal in concentrate
Copper tonnes 19,217 24,576 17,682
Gold ounces 10,672 29,144 12,998
Silver ounces 450,833 639,718 419,642
Molybdenum tonnes 369 397 414
Payable metal sold
Copper tonnes 16,806 23,754 21,207
Gold ounces 13,433 42,677 14,524
Silver ounces 400,302 753,707 671,532
Molybdenum tonnes 347 415 314
Combined unit operating cost2,3 $/tonne 12.68 10.92 14.07
Cash cost3 $/lb 1.78 0.43 2.14
Sustaining cash cost3 $/lb 2.61 1.06 3.06
1 Reported tonnes and grade for ore mined are estimates based on mine plan assumptions and may not reconcile fully to ore milled.
2 Reflects combined mine, mill and general and administrative ("G&A") costs per tonne of ore milled. Reflects the deduction of
expected capitalized stripping costs.
3 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.
4 Strip ratio is calculated as waste mined divided by ore mined.
During the second quarter of 2024, the Peru operations produced 19,217 tonnes of copper, 10,672 ounces of gold,
450,833 ounces of silver and 369 tonnes of molybdenum. Production was lower than the first quarter of 2024 primarily
due to planned lower grades as the company executes a stripping program at Pampacancha to advance to the next
mining phase, as further discussed below, in addition to a planned semi -annual mill maintenance shutdown in the
second quarter. The company is on track to achieve its 2024 production guidance for all metals in Peru.
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Total ore mined in the second quarter of 2024 increased by 38% compared to the first quarter and was in line with the
mine plan. Ore mined from Pampacancha during the second quarter decreased to 1.3 million tonnes compared with
2.2 million tonnes in the first quarter of 2024 as a result of higher capitalized stripping activities. Mining efforts at
Pampacancha are focused on continuing the stripping program to advance to the next mining phase and the company
is on track to resume mining in higher copper and gold grade areas later in the year.
The Peru operations continue to benefit from strong mill throughput, averaging approximately 87,000 tonnes processed
per day year -to-date. Ore milled during the second quarter of 2024 was 4 % lower than the first quarter due to the
scheduled semi-annual mill maintenance shutdown. Ore milled included supplemental ore feed from stockpiles during
the quarter as the team advances pit stripping activities. Milled copper and gold grades of 0.30% and 0.07 grams per
tonne, respectively, decreased in the second quarter of 2024 compared to the first quarter due to lower amounts of
high-grade copper and gold from Pampacancha, in addition to lower grades from the processing of stockpiled ore.
Recoveries of copper and gold during the second quarter of 2024 were 83 % and 61%, respectively, and were in line
with metallurgical models.
Combined mine, mill and G&A unit operating costsi in the second quarter were $12.68 per tonne, 16% higher than the
first quarter of 2024 primarily due to higher milling costs and lower throughput associated with the planned semi-annual
mill maintenance shutdown.
Payable copper metal sold in the second quarter of 2024 was lower than the first quarter due to lower copper production
and a 10,000 wet metric tonne copper concentrate shipment that remained unsold at the end of the second quarter and
was recognized as revenue early in the third quarter of 2024.
Cash cost per pound of copper produced, net of by -product creditsi, in the second quarter of 2024 was $1.78, an
increase from the $0.43 achieved in the first quarter of 2024 due to lower planned copper production, higher milling
costs and lower by-product credits, partly offset by lower treatment and refining charges. Full year cash costs are
expected to be within the 2024 guidance range.
Sustaining cash cost per pound of copper produced, net of by-product creditsi, was $2.61 for the second quarter, higher
than the first quarter of 2024 of $1.06, primarily due to the same factors affecting cash cost.
During the quarter, the Peruvian Ministry of Energy and Mines approved a regulatory change, Supreme Decree 011-
2024-EM, to allow mining companies in Peru to increase throughput by up to 10% above permitted levels. Previously,
the regulation only allowed for an increase of up to 5%. As such, the company is evaluating the potential to increase
future production at Constancia.