TSX, NYSE – HBM 2024 No. 6 Hudbay Delivers Strong First Quarter 2024 Results
TSX, NYSE – HBM
2024 No. 6
Hudbay Delivers Strong First Quarter 2024 Results
Toronto, Ontario, May 14, 2024 – Hudbay Minerals Inc. (“Hudbay” or the “company”) (TSX, NYSE: HBM) today
released its first 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.
"We delivered another consecutive quarter of strong operational and financial performance with steady free cash flow
generation and further debt reduction,” said Peter Kukielski, President and Chief Executive Officer. “These results
demonstrate the strength of our diversified operating base, with continued contributions from the high-grade
Pampacancha deposit in Peru, better-than-planned gold production in Manitoba and benefits starting to be realized
from operational stabilization efforts at the Copper Mountain mine in British Columbia. We are well on track to achieve
all of our production and cost guidance metrics. Hudbay’s resilient operating platform offers leading exposure to copper
and unique complementary exposure to gold, which together with our quality pipeline of growth assets, provide
significant upside potential for further value creation at higher copper and gold prices.”
Delivered Strong First Quarter Operating and Financial Results; Production and Cost Guidance Affirmed
• Enhanced operating platform delivered consolidated copper production of 34,749 tonnes and stronger than
expected gold production of 90,392 ounces in the first quarter.
• Solid operating performance was driven by continued high copper and gold grades at the Pampacancha
deposit in Peru, continued high gold grades at Lalor and strong performance from the New Britannia mill in
Manitoba, and the operational stabilization efforts at the Copper Mountain mine in British Columbia.
• Achieved revenue of $525.0 million and operating cash flow before change in non-cash working capital of
$147.5 million in the first quarter of 2024.
• Affirmed full year 2024 consolidated copper production and cash cost guidance of 137,000 to 176,000 tonnes
of copper at a cash cost of $1.05 to $1.25 per poundi and sustaining cash cost of $2.00 to $2.45 per poundi.
• Consolidated cash costi and sustaining cash costi per pound of copper produced, net of by-product creditsi, in
the first quarter of 2024, were $0.16 and $1.03, respectively, consistent with strong levels achieved in the
fourth quarter of 2023.
• Peru operations benefited from continued contributions from the high -grade Pampacancha satellite pit,
resulting in 24,576 tonnes of copper and 29,144 ounces of gold produced in the first quarter of 2024. Peru
cash cost per pound of copper produced, net of by-product creditsi, in the first quarter improved to $0.43, a
20% decrease compared to the fourth quarter of 2023.
• Manitoba operations produced 56,831 ounces of gold in the first quarter of 2024, exceeding management's
quarterly cadence expectations 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
$736 during the first quarter of 2024 and well within guidance expectations.
• British Columbia operations produced 7,024 tonnes of copper at a cash cost per pound of copper produced,
net of by-product creditsi, of $3.49 in the first quarter. Operational stabilization plans continue to be advanced
at the Copper Mountain mine.
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• First quarter net earnings and earnings per share were $18.5 million and $0.05, respectively. After adjusting
for a non-cash gain of $5.3 million related to a quarterly revaluation of the closed site environmental
reclamation provision, a $12.8 million mark-to-market adjustment loss related to share-based compensation,
gold prepayment liability and strategic gold and copper hedges and a $9.0 million write-down of property, plant
and equipment (“PP&E”), among other items, first quarter adjusted earningsi per share were $0.16.
• Cash and cash equivalents increased by $34.6 million to $284.4 million during the first quarter due to strong
operating cash flows bolstered by higher copper and gold prices and sales volumes enabling a $43.5 million
reduction in net debti during the quarter.
Operating Performance and Financial Discipline Driving Free Cash Flow and Deleveraging
• Unique copper and gold diversification provides exposure to higher copper and gold prices and attractive free
cash flow generation.
• Executed on planned higher production levels and achieved continued operating and capital cost efficiencies
to generate significant free cash flow in the first quarter.
• Realized strong margins by maintaining low consolidated cash cost of $0.16 per pound of copper in the first
quarter while benefiting from higher copper prices, positioning the company for continued significant cash flow
generation in a period of high commodity prices.
• Achieved adjusted EBITDAi of $214.2 million in the first quarter and a trailing twelve month adjusted EBITDAi
of $760.5 million.
• Reduced net debti to $994.2 million during the first quarter, which, together with higher levels of adjusted
EBITDAi, further improved the company’s net debt to adjusted EBITDA ratioi to 1.3x compared to 1.6x at the
end of 2023.
• Continued deleveraging efforts with a $10 million repayment of the revolving credit facility balance in January
2024 and an additional $10 million repayment after quarter-end in May 2024.
• Increased cash and total liquidity by $45.2 million to $618.9 million as at March 31, 2024 compared to the end
of 2023.
Continued Execution of Growth Initiatives to Further Enhance Copper and Gold Exposure
• 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. Achieved better than planned
copper recoveries of 83% in the first quarter, and stabilization benefits continued to be realized subsequent to
quarter end with 83% copper recoveries and approximately 40,000 tonnes per day average mill throughput in
the month of April.
• Constancia’s expected mine life extended by three years to 2041 as a result of mineral reserve conversion
with the addition of a further mining phase at the Constancia pit.
• The New Britannia mill achieved record throughput levels, averaging 1,870 tonnes per day in the first quarter,
exceeding its original design capacity of 1,500 tonnes per day due to the successful implementation of process
improvement initiatives and effective preventative maintenance measures. Received permit to increase New
Britannia throughput to 2,500 tonnes per day.
• Achieved copper recoveries of approximately 92% and gold recoveries of approximately 68% at the Stall mill
in the first quarter of 2024 as the company continues to benefit from the Stall mill recovery improvement
project, which was completed in 2023.
• The development of an access drift to the 1901 deposit in Snow Lake remains on track and on budget. 1901
is located within 1,000 metres of the existing underground ramp access to the Lalor mine. The drift is expected
to reach mineralization in late-2024, which is intended to enable confirmation of the optimal mining method
and conducting drilling to further evaluate the orebody and upgrade inferred gold resources to reserves.
• Progressing the three prerequisites plan (the “3-P plan”) for sanctioning Copper World with deleveraging
advancing towards targeted levels and remaining key state permits expected in 2024.
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• Drill permitting for highly prospective Maria Reyna and Caballito properties near Constancia continues to
advance through the regulatory process with environmental impact assessment applications submitted for
both properties in recent months.
• Largest annual exploration program in Snow Lake underway consisting of geophysical surveys and drill
campaigns testing the newly acquired Cook Lake claims, former Rockcliff properties and near -mine
exploration at Lalor.
• 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 existing Flin Flon processing facilities.
Summary of First Quarter Results
Consolidated copper production of 34,749 tonnes in the first quarter of 2024 declined from the strong levels achieved
in the fourth quarter of 2023 but was in line with mine plan expectations. Consolidated gold production of 90,392 ounces
in the first quarter exceeded expectations. First quarter production benefitted from the continued mining of high copper
and gold grades at the Pampacancha deposit in Peru, continued high gold grades mined at Lalor and strong
performance from the New Britannia mill in Manitoba, and the operational stabilization efforts at the Copper Mountain
mine in British Columbia. Full year 2024 production guidance for all metals has been affirmed.
Industry-leading consolidated cash cost per pound of copper produced, net of by-product creditsi, was $0.16 in the first
quarter of 2024, consistent with the favourable levels achieved in the fourth quarter of 2023. This was primarily the
result of continued high by-product credits, partially offset by higher mining costs and lower copper production.
Consolidated sustaining cash cost per pound of copper produced, net of by-product creditsi, was $1.03 in the first
quarter of 2024 compared to $1.09 in the fourth quarter of 2023. This improvement was primarily due to lower sustaining
capital expenditures. Full year 2024 consolidated cash cost, sustaining cash cost and capitalized expenditures
guidance has been affirmed.
Cash generated from operating activities in the first quarter of 2024 of $139.7 million was lower than the fourth quarter
of 2023 but better than anticipated, primarily because of strong gold sales volumes and higher realized copper prices,
partially offset by a $30.1 million increase in cash taxes paid mainly in Peru. Operating cash flow before change in non-
cash working capital of $147.5 million also exceeded expectations due to the same reasons.
Similarly, adjusted EBITDAi of $214.2 million in the first quarter of 2024 benefited from the solid operating performance
outlined above and remained comparable to the strong levels achieved in recent quarters, including $274.4 million in
the fourth quarter and $190.7 million in the third quarter of 2023.
Net earnings and earnings per share in the first quarter of 2024 were $18.5 million and $0.05, respectively, compared
to net earnings and earnings per share of $33.5 million and $0.10, respectively in the fourth quarter of 2023. Adjusted
net earningsi and adjusted net earnings per sharei in the first quarter of 2024 were $57.6 million and $0.16 per share,
after adjusting for a $5.3 million non-cash gain related to the quarterly revaluation of the environmental reclamation
provision at the closed sites, a $12.8 million mark-to-market revaluation loss related to share-based compensation
expense, a revaluation of the gold prepayment liability and a revaluation of the company’s strategic gold and copper
hedges, and a $9.0 million write-down of PP&E, among other items.
As at March 31, 2024, total liquidity increased to $618.9 million, including $284.4 million in cash and cash equivalents
as well as undrawn availability of $334.5 million under the company’s revolving credit facilities. Net debt declined by
$43.5 million during the quarter to $994.2 million as at March 31, 2024. Based on expected free cash flow generation
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beyond the first quarter of 2024, the company continues to make progress on the deleveraging targets as outlined in
the 3-P plan for sanctioning Copper World.
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 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
Mar. 31, 2024 Dec. 31, 2023 Mar. 31, 2023
Revenue $000s 524,989 602,189 295,219
Cost of sales $000s 373,035 405,433 228,706
Earnings before tax $000s 67,750 80,982 17,430
Net earnings $000s 18,535 33,528 5,457
Basic earnings per share $/share 0.05 0.10 0.02
Adjusted earnings per share1 $/share 0.16 0.20 0.00
Operating cash flow before change in non-
cash working capital
$ millions 147.5 246.5 85.6
Adjusted EBITDA1 $ millions 214.2 274.4 101.9
1 Adjusted 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.
Consolidated Financial Condition ($000s) Mar. 31, 2024 Dec. 31, 2023 Mar. 31, 2023
Cash and cash equivalents 284,385 249,794 255,563
Total long-term debt 1,278,587 1,287,536 1,225,023
Net debt1 994,202 1,037,742 969,460
Working capital2 200,850 135,913 100,987
Total assets 5,231,283 5,312,634 4,367,982
Equity3 2,107,532 2,096,811 1,574,521
Net debt to adjusted EBITDA1,4 1.3 1.6 2.1
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Consolidated Production and Cost Performance Three Months Ended1
Mar. 31, 2024 Dec. 31, 2023 Mar. 31, 2023
Contained metal in concentrate and doré produced2
Copper tonnes 34,749 45,450 22,562
Gold ounces 90,392 112,776 47,240
Silver ounces 947,917 1,197,082 702,809
Zinc tonnes 8,798 5,747 9,846
Molybdenum tonnes 397 397 289
Payable metal sold
Copper tonnes 33,608 44,006 18,541
Gold3 ounces 108,081 104,840 49,720
Silver3 ounces 1,068,848 1,048,877 541,884
Zinc tonnes 6,119 7,385 5,628
Molybdenum tonnes 415 468 254
Consolidated cash cost per pound of copper produced4
Cash cost $/lb 0.16 0.16 0.85
Sustaining cash cost $/lb 1.03 1.09 1.83
All-in sustaining cash cost $/lb 1.32 1.31 2.07 1Includes 100% of Copper Mountain mine production. Hudbay owns 75% of Copper Mountain mine. As Copper Mountain was acquired
on June 20, 2023, there were no comparative figures for the three months ended March 31, 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.
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Peru Operations Review
Peru Operations Three Months Ended
Mar. 31, 2024 Dec. 31, 2023 Mar. 31, 2023
Constancia ore mined1 tonnes 2,559,547 973,176 3,403,181
Copper % 0.31 0.30 0.34
Gold g/tonne 0.04 0.04 0.04
Silver g/tonne 2.79 2.26 2.52
Molybdenum % 0.01 0.01 0.01
Pampacancha ore mined tonnes 2,214,354 5,556,613 897,295
Copper % 0.56 0.56 0.49
Gold g/tonne 0.32 0.32 0.52
Silver g/tonne 4.64 4.84 5.12
Molybdenum % 0.02 0.01 0.01
Total ore mined tonnes 4,773,901 6,529,789 4,300,476
Strip ratio4 1.95 1.26 1.84
Ore milled tonnes 8,077,962 7,939,044 7,663,728
Copper % 0.36 0.48 0.33
Gold g/tonne 0.15 0.25 0.08
Silver g/tonne 3.48 4.20 3.69
Molybdenum % 0.01 0.01 0.01
Copper recovery % 84.9 87.4 81.7
Gold recovery % 73.4 77.6 56.8
Silver recovery % 70.7 78.0 60.7
Molybdenum recovery % 43.2 33.6 34.8
Contained metal in concentrate
Copper tonnes 24,576 33,207 20,517
Gold ounces 29,144 49,418 11,206
Silver ounces 639,718 836,208 552,167
Molybdenum tonnes 397 397 289
Payable metal sold
Copper tonnes 23,754 31,200 16,316
Gold ounces 42,677 38,114 11,781
Silver ounces 753,707 703,679 392,207
Molybdenum tonnes 415 468 254
Combined unit operating cost2,3 $/tonne 10.92 12.24 11.47
Cash cost3 $/lb 0.43 0.54 1.36
Sustaining cash cost3 $/lb 1.06 1.21 2.12
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 first quarter of 2024, the Peru operations produced 24,576 tonnes of copper, 29,144 ounces of gold, 639,718
ounces of silver and 397 tonnes of molybdenum. While high grade copper and gold ore continued to be mined from
Pampacancha in the first quarter of 2024, the mill processed less Pampacancha ore than in the fourth quarter of 2023,
which resulted in lower copper, gold and silver production, in line with mine plan expectations. The company is on track
to achieve its 2024 production guidance for all metals in Peru.
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The Constancia operations benefited from strong mill throughput, averaging 89,000 tonnes per day in the first quarter.
Mill ore feed has reverted to the typical blend of approximately one-third from Pampacancha and two-thirds from
Constancia, which is expected to continue throughout 2024. The operations benefited from strong cost performance,
achieving lower unit operating costs, cash cost and sustaining cash cost compared to the fourth quarter of 2023. Cash
cost also benefited from higher gold sales volumes in the first quarter of 2024.
Total ore mined in the first quarter of 2024 decreased by 27% compared to the fourth quarter of 2023, and was in line
with the mine plan, which included supplemental ore feed from stockpiles during the quarter as the company advances
pit stripping activities. Ore mined from Pampacancha during the first quarter was 2.2 million tonnes at average grades
of 0.56% copper and 0.32 grams per tonne gold.
Ore milled during the first quarter of 2024 was 2% higher than the fourth quarter of 2023 mainly due to the treatment of
softer ore from stockpiles. Milled copper and gold grades decreased in the first quarter of 2024 compared to the fourth
quarter of 2023 as a result of a normalized blending of ore feed from Pampacancha, as described above. Recoveries
of copper, gold and silver during the first quarter of 2024 were 84.9%, 73.4% and 70.7%, respectively, and were in line
with metallurgical models.
Combined mine, mill and G&A unit operating costsi in the first quarter were $10.92 per tonne, 11% lower than the fourth
quarter of 2023 primarily due to lower milling costs and higher ore throughput.
Cash cost per pound of copper produced, net of by-product creditsi, in the first quarter of 2024 was $0.43, a 20%
improvement over the favourable levels achieved in the fourth quarter of 2023 primarily due to higher by-product credits,
lower milling costs, lower treatment and refining costs and lower freight costs, partially offset by higher copper
production. Cash cost for the quarter was below the low end of the 2024 guidance range primarily due to high gold by-
product credits, and it is expected to increase during the remainder of 2024 with full year cash cost expected to be
within the 2024 guidance range.
Sustaining cash cost per pound of copper produced, net of by-product creditsi, for the first quarter of 2024 was $1.06,
a 12% improvement over the fourth quarter of 2023 primarily due to the same factors affecting cash cost.
The collective bargaining agreement with the labour union representing a portion of the Constancia workforce expired
in November 2023, and Hudbay continues to negotiate the terms of a new agreement with the union.
In March 2024, the Peruvian Ministry of Energy and Mines indicated an intention to make regulatory changes to allow
mining companies to increase their permitted mill throughput levels by up to 10%. The company is monitoring the status
of this proposed regulation and evaluating the potential to increase future production at Constancia.
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Manitoba Operations Review
Manitoba Operations Three Months Ended
Mar. 31, 2024 Dec. 31, 2023 Mar. 31, 2023
Lalor
Ore mined tonnes 407,708 372,384 373,599
Gold g/tonne 4.84 5.92 3.96
Copper % 0.84 1.04 0.57
Zinc % 2.92 2.20 3.32
Silver g/tonne 23.44 28.92 18.24
New Britannia
Ore milled tonnes 170,409 165,038 143,042
Gold g/tonne 7.03 8.03 6.05
Copper % 1.13 1.46 0.61
Zinc % 0.82 0.85 0.76
Silver g/tonne 21.6 27.97 22.39
Gold recovery1 % 88.6 89.0 87.9
Copper recovery % 96.2 91.6 91.7
Silver recovery1 % 82.0 83.2 79.1
Stall Concentrator
Ore milled tonnes 219,358 228,799 242,619
Gold g/tonne 3.07 4.22 2.78
Copper % 0.64 0.73 0.59
Zinc % 4.54 3.20 4.81
Silver g/tonne 24.46 28.63 17.14
Gold recovery % 68.0 67.5 61.9
Copper recovery % 91.7 92.0 87.0
Zinc recovery % 88.4 78.5 84.4
Silver recovery % 59.8 61.8 56.3
Total contained metal in concentrate and doré2
Gold ounces 56,831 59,863 36,034
Copper tonnes 3,149 3,735 2,045
Zinc tonnes 8,798 5,747 9,846
Silver ounces 219,823 255,579 150,642
Total payable metal sold
Gold3 ounces 62,003 63,635 37,939
Copper tonnes 2,921 3,687 2,225
Zinc tonnes 6,119 7,385 5,628
Silver3 ounces 231,841 246,757 149,677
Combined unit operating cost4,5 C$/tonne 235 216 216
Gold cash cost5 $/oz 736 434 938
Gold sustaining cash cost5 $/oz 950 788 1,336
1 Gold and silver recovery includes total recovery from concentrate and doré. 2 Doré includes sludge, slag and carbon fines in three ended March 31, 2024, December 31, 2023 and March 31, 2023. 3 Includes total payable precious metals in concentrate and in doré sold. 4 Reflects combined mine, mill and G&A costs per tonne of ore milled. 5 Combined unit cost, gold cash cost and sustaining cash cost per ounce of gold produced, net of by-product credits, are
non-IFRS financial performance measures with no standardized definition under IFRS. For further information, please see
the “Non-IFRS Financial Performance Measures” section of this news release.