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 2023ii, 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 costi 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 higher
grades later this year is well underway. The reduced mining from
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 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 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 EBITDAi 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.
- 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
original 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”.
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. Consolidated 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 EBITDAi 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.
|
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 |
|
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 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.
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.
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.
Manitoba Operations Review
|
Manitoba Operations
|
Three Months Ended |
|
|
|
Jun. 30, 2024 |
Mar. 31, 2024 |
Jun. 30, 2023 |
|
Lalor |
|
|
|
|
|
Ore mined |
tonnes |
385,478 |
407,708 |
413,255 |
|
Gold |
g/tonne |
3.75 |
4.84 |
4.07 |
|
Copper |
% |
0.69 |
0.84 |
0.81 |
|
Zinc |
% |
2.76 |
2.92 |
3.14 |
|
Silver |
g/tonne |
22.29 |
23.44 |
23.27 |
|
New Britannia |
|
|
|
|
| Ore
milled |
tonnes |
167,899 |
170,409 |
141,905 |
|
Gold |
g/tonne |
5.31 |
7.03 |
5.82 |
|
Copper |
% |
0.94 |
1.13 |
0.77 |
|
Zinc |
% |
0.92 |
0.82 |
0.85 |
|
Silver |
g/tonne |
24.42 |
21.6 |
25.79 |
| Gold
recovery1 |
% |
90 |
88.6 |
88.6 |
| Copper
recovery |
% |
94.4 |
96.2 |
91.2 |
| Silver
recovery1 |
% |
83.1 |
82 |
79.6 |
|
Stall Concentrator |
|
|
|
| Ore
milled |
tonnes |
229,527 |
219,358 |
238,633 |
|
Gold |
g/tonne |
3.02 |
3.07 |
3.12 |
|
Copper |
% |
0.59 |
0.64 |
0.85 |
|
Zinc |
% |
4.05 |
4.54 |
4.47 |
|
Silver |
g/tonne |
21.74 |
24.46 |
22.15 |
| Gold
recovery |
% |
65.5 |
68 |
59.9 |
| Copper
recovery |
% |
85.4 |
91.7 |
88.5 |
| Zinc
recovery |
% |
87.1 |
88.4 |
82.2 |
|
Silver recovery |
% |
54.2 |
59.8 |
60.3 |
|
Total contained metal in concentrate and
doré1 |
|
|
|
Gold |
ounces |
43,488 |
56,831 |
35,253 |
|
Copper |
tonnes |
2,642 |
3,149 |
2,794 |
|
Zinc |
tonnes |
8,087 |
8,798 |
8,758 |
|
Silver |
ounces |
210,647 |
219,823 |
180,750 |
|
Total payable metal sold |
|
|
|
|
Gold |
ounces |
42,763 |
62,003 |
33,009 |
|
Copper |
tonnes |
2,429 |
2,921 |
1,871 |
|
Zinc |
tonnes |
5,133 |
6,119 |
8,641 |
|
Silver |
ounces |
197,486 |
231,841 |
133,916 |
|
Combined unit operating cost2,3 |
C$/tonne |
225 |
235 |
220 |
| Gold cash
cost |
$/oz |
771 |
736 |
1,097 |
|
Gold sustaining cash cost3 |
$/oz |
1,163 |
950 |
1,521 |
| 1 Gold and silver
recovery includes total recovery from concentrate and doré. 2
Combined unit cost, cash cost, sustaining cash cost per pound of
copper produced, net of by-product credits, 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. 3 Reflects combined mine, mill and G&A costs per
tonne of ore milled. |
The Manitoba operations produced 43,488 ounces
of gold, 2,642 tonnes of copper, 8,087 tonnes of zinc and 210,647
ounces of silver during the second quarter of 2024. Compared to the
exceptional results achieved in the first quarter of 2024,
production decreased primarily due to a planned lower grade mining
sequence in the quarter. The Snow Lake operations in Manitoba
maintained steady production results despite overcoming challenges
in the second quarter of 2024, including forest fires and temporary
production interruptions at the Lalor mine, partially offset by
stronger than budgeted throughput at New Britannia. The Manitoba
team's resilience and dedication ensured that the operations
continued to function effectively and efficiently while achieving
quarterly production targets. The company is on track to achieve
its 2024 production guidance for all metals in Manitoba.
Total ore mined in Manitoba in the second
quarter of 2024 was 5% lower than the first quarter. Gold, copper,
zinc and silver grades mined at Lalor during the second quarter
were 23%, 18%, 5% and 5% lower, respectively, compared with the
first quarter of 2024. These changes reflect temporary Lalor mine
production disruptions and the completion of a planned lower grade
mining sequence in the quarter. During the quarter, the Lalor mine
encountered issues with the production hoist gearbox and electrical
faults on the hoist drives, causing a ten-day stoppage in hoisting
ore. The maintenance teams collaborated closely with original
equipment manufacturers to resolve these issues quickly. During the
hoisting outage, the operations team focused on value-added
activities, including underground ore buildup close to the shaft,
waste filling, increased maintenance, building longhole inventory,
and trucking ore to surface. Additionally, the team implemented
stope design modifications that yielded positive results by
improving mucking efficiency throughout the lifecycle of the
stopes.
The New Britannia mill consistently operated
above nameplate capacity, averaging approximately 1,850 tonnes per
day in the second quarter of 2024 and achieving a new monthly
record of nearly 2,100 tonnes per day in June. Ongoing efforts to
increase throughput are aligned with the company’s long-term
objectives to maximize gold production by directing more gold ore
from Lalor to the New Britannia mill for higher gold recoveries.
Recoveries of gold, copper and silver in the second quarter of 2024
were 90%, 94% and 83%, respectively.
The Stall mill processed 5% more ore in the
second quarter of 2024 than the first quarter. Recoveries of gold,
copper and silver in the second quarter of 2024 were slightly lower
than the first quarter primarily due to lower grades.
Combined mine, mill and G&A unit operating
costsi in the second quarter of 2024 were C$225 per tonne, a 5%
decrease compared to the first quarter. This decrease was a result
of higher throughput and lower mining, milling and G&A costs
compared to the first quarter.
Payable zinc metal sold was lower than prior
periods as there was a 10,000 wet metric tonne zinc concentrate
shipment that remained unsold at the end of the second quarter and
will be recognized as revenue in the third quarter of 2024.
Cash cost per ounce of gold produced, net of
by-product creditsi, in the second quarter of 2024 was $771 per
ounce, a 5% increase compared to the first quarter primarily due to
lower gold production. Full year gold cash cost is expected to
remain within the 2024 guidance range.
Sustaining cash cost per ounce of gold produced,
net of by-product creditsi, in the second quarter of 2024 was
$1,163, an increase of 22% compared to the first quarter due to
lower gold production and higher sustaining capital costs during
the quarter.
Hudbay’s Manitoba operation also progressed its
sustainability initiatives by reducing propane and diesel
consumption in the first half of 2024 compared to the same period
in 2023. In addition, at Lalor, an initiative to capture and
recycle natural groundwater and use it as process water to reduce
the freshwater intake into the mine has proven to be effective.
British Columbia Operations
Review
|
British Columbia Operations |
Three Months Ended5 |
|
|
|
|
Jun. 30, 2024 |
Mar. 31, 2024 |
|
|
Ore mined1 |
tonnes |
|
2,164,722 |
3,722,496 |
|
|
Strip ratio2 |
|
|
7.61 |
4.10 |
|
|
Ore milled |
tonnes |
|
3,232,427 |
3,180,149 |
|
|
Copper |
% |
|
0.25 |
0.27 |
|
|
Gold |
g/tonne |
|
0.07 |
0.07 |
|
|
Silver |
g/tonne |
|
1.01 |
1.19 |
|
|
Copper recovery |
% |
|
82.3 |
83.4 |
|
|
Gold recovery |
% |
|
57.2 |
61.8 |
|
|
Silver recovery |
% |
|
73.9 |
72.4 |
|
|
Total contained metal in
concentrate2 |
|
|
|
|
Copper |
tonnes |
|
6,719 |
7,024 |
|
|
Gold |
ounces |
|
4,454 |
4,417 |
|
|
Silver |
ounces |
|
77,227 |
88,376 |
|
|
Total payable metal sold |
|
|
|
|
|
Copper |
tonnes |
|
6,564 |
6,933 |
|
|
Gold |
ounces |
|
5,099 |
3,401 |
|
|
Silver |
ounces |
|
69,248 |
83,300 |
|
|
Combined unit operating cost3,4 |
C$/tonne |
|
19.65 |
23.67 |
|
|
Cash cost4 |
$/lb |
|
2.67 |
3.49 |
|
|
Sustaining cash cost4 |
$/lb |
|
5.56 |
4.85 |
|
| 1 Reported
tonnes and grade for ore mined are estimates based on mine plan
assumptions and may not reconcile fully to ore milled. |
| 2 Strip ratio
is calculated as waste mined divided by ore mined. |
| 3 Reflects
combined mine, mill and G&A costs per tonne of ore milled.
Reflects the deduction of expected capitalized stripping
costs. |
| 4 Combined
unit operating cost, 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. 5
Copper Mountain mine results are stated at 100%. Hudbay owns 75% of
Copper Mountain mine. |
During the second quarter of 2024, the British
Columbia operations produced 6,719 tonnes of copper, 4,454 ounces
of gold and 77,227 ounces of silver. Production of copper was
slightly lower than the first quarter of 2024 primarily as a result
of lower head grades from the use of stockpiled ore to feed the
mill while mining activities are focused on executing the planned
stripping program. Gold production was consistent with the first
quarter of 2024. The company has reaffirmed its 2024 production
guidance ranges for all metals in British Columbia.
Hudbay has been focused on advancing operational
stabilization plans, including opening up the mine by adding
additional mining faces, adding to the mining fleet, optimizing the
ore feed to the plant and implementing plant improvement
initiatives that mirror Hudbay's successful processes at
Constancia. While the benefits of these stabilization plans are not
expected to be fully realized until 2025, the mine has successfully
increased the total tonnes moved and has seen stronger mill
performance as demonstrated by higher mill availability of 94% and
above-target copper recoveries of 82% in the second quarter of
2024. As a result, year-to-date mill performance has resulted in
the highest mill availability and highest copper recoveries in the
last decade.
Total ore mined at Copper Mountain in the second
quarter of 2024 was 2.2 million tonnes, a decrease compared to the
first quarter of 2024. As planned, ore stockpiles were utilized as
ore feed to the mill while the mine operation team increased waste
stripping activities. Total material moved continued to ramp up in
the quarter as a result of effective usage of the mining fleet as
part of the fleet production ramp up plan to execute the
accelerated stripping program to access higher head grades. This
plan entails remobilization of the existing mining truck fleet and
the deployment of an additional shovel, drill and associated
equipment. Earlier this year, the company ordered five new haul
trucks to execute additional stripping activities over the next
three years at a lower cost than the contractor mining approach
that was contemplated in the technical report. Three of the five
new haul trucks and the additional shovel and drill were put in
production in June, and all five haul trucks were in operation by
August. As a result, total material moved is expected to continue
to increase quarter-over-quarter as per the mine plan.
The mill processed 3.2 million tonnes of ore
during the second quarter of 2024, a 2% increase over the first
quarter, benefiting from stabilization and reliability initiatives
within the mill processing circuit. The average mill availability
during the second quarter of 2024 increased to 94% from 90% in the
first quarter, while maintaining a stable throughput rate. Mill
throughput in the second quarter of 2024 was limited by reduced
reliability of the secondary crushing circuit, caused primarily by
unplanned maintenance events and elevated clay material in the mine
feed. During the quarter, a number of initiatives were advanced to
address these issues and other identified constraints and improve
throughput to targeted levels, with the benefits expected to be
realized in the second half of 2024. Initiatives that began earlier
in the year are progressing on target, including reprogramming the
mill expert system, installation of advanced semi-autogenous
grinding control instrumentation, redesign of the SAG liner package
and updated operational procedures intended to remove magnetite
from the pebble stream.
Milled copper grades during the second quarter
of 2024 were 7% lower than the first quarter as the company
continued to draw on stockpiled ore. Copper recoveries were
slightly lower than the first quarter of 2024, but in line with
expectations despite lower grades as the operations improved the
regrind circuit constraint and implemented the flotation
operational strategy improvements, including reagent selection and
dose modification.
The benefits of the operational stabilization
improvements are expected to continue to be realized throughout
2024. The company is also accelerating engineering studies to
debottleneck and increase the nominal plant capacity to 50,000
tonnes per day earlier than was contemplated in the technical
report.
Combined mine, mill and G&A unit operating
costsi in the second quarter of 2024 were C$19.65 per tonne milled,
17% lower than the first quarter of 2024 primarily due to lower
mining costs as there were high ore rehandling costs in the first
quarter of 2024. Combined unit operating costs are expected to
decrease over time as the company continues to implement its
stabilization and optimization initiatives at Copper Mountain. As
the hiring and training of additional haul truck drivers continues,
the company expects to have a fully trained complement of truck
drivers in August to support the larger mining fleet, which is
expected to increase material moved and reduce unit operating
costs.
Cash cost per pound of copper produced, net of
by-product creditsi, in the second quarter of 2024 was $2.67. Cash
costs were lower than the first quarter of 2024 by 23% for the same
reason as mentioned above regarding the unit cost variance. 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, in the second quarter of 2024
was $5.56, 15% higher than the first quarter mainly as a result of
planned higher capitalized stripping costs to unlock the mine
potential according to the company’s stabilization plan.
Enhanced Balance Sheet through
Successful Equity Offering and Accelerated Debt
Reduction
The company took several prudent measures in the
second quarter of 2024 to further improve its balance sheet
position, including more than $150 million of combined debt
repayments and gold prepayment liability reductions:
- Completed successful $402.5 million equity
offering – On May 24, 2024, Hudbay closed a public
offering of common shares for gross proceeds of $402.5 million,
resulting in net proceeds of $386.2 million after transaction
costs.
- Fully repaid $90.0 million outstanding under the
revolving credit facilities – The company fully repaid $90
million of debt outstanding under its revolving credit facilities
during the quarter with no remaining amounts drawn (other than
letters of credit).
- Repurchased and retired $34.1 million of senior
unsecured notes – The company made open market purchases
of $11.6 million of the 2026 senior unsecured notes and $22.5
million of the 2029 senior unsecured notes during the quarter.
- Delivered $24.0 million under gold forward sale and
prepay agreement – The company completed three additional
months of gold deliveries during the quarter and is scheduled to
fully repay the gold prepay facility by the end of August 2024,
which was used to fund the refurbishment of the New Britannia gold
mill.
As a result of these deleveraging efforts and
continued cash flow generation, Hudbay has substantially reduced
net debti to $631.8 million at June 30, 2024, from $1,037.7 million
at the end of 2023. The net debt reduction, together with higher
levels of adjusted EBITDAi over the last twelve months, has
significantly improved the company’s net debt to adjusted EBITDA
ratioi to 0.8x compared to 1.6x at the end of 2023.
Subsequent to the quarter, deleveraging efforts
continued in July and August with an additional $48.5 million of
open market purchases of the senior unsecured notes, at a
discount.
The improved balance sheet flexibility and
accelerated debt reduction significantly advances the company’s
progress as part of its 3-P plan for sanctioning Copper World, and
results in the successful achievement of the targeted 1.2x net debt
to adjusted EBITDA ratio well ahead of schedule.
Disciplined Capital Allocation Driving
Increased Copper and Gold Exposure
Hudbay continued to deliver positive free cash
flow generation this quarter with strong gold production in
Manitoba and strong cost control across the operations, while
advancing planned stripping activities in Peru and British Columbia
to drive higher copper and gold production levels in the second
half of 2024. The company also continues to evaluate areas to
further improve mill performance across the business as part of its
continuous improvement efforts.
In addition to enhancing balance sheet
flexibility through debt repayments as mentioned above, the net
proceeds of the equity offering are intended to fund near-term
growth initiatives, including acceleration of mine pre-stripping
activities and mill optimization initiatives at Copper Mountain,
and to evaluate mill throughput enhancement opportunities at
Constancia and New Britannia.
Copper Mountain Stabilization Efforts to
Drive Higher Copper Production
The key elements of Hudbay’s stabilization plans
for Copper Mountain include executing a campaign of accelerated
stripping to access higher grades and implementing several plant
improvement initiatives to increase mill throughput and
recoveries.
Earlier this year, the company commenced a
three-year accelerated stripping program to mitigate the
substantially reduced stripping that occurred over the four years
prior to Hudbay’s acquisition. The company has successfully
remobilized all 28 haul trucks and added five additional haul
trucks this year to execute the accelerated stripping campaign at a
lower cost and avoid contractor mining costs. The accelerated
stripping program is expected to improve operating efficiencies and
lower unit operating costs.
Hudbay’s mine plan as disclosed in the December
2023 technical report for Copper Mountain assumes a mill ramp up to
its nominal capacity of 45,000 tonnes per day in 2025 and an
expansion to the permitted capacity of 50,000 tonnes per day in
2027. Mill initiatives are progressing as planned for 2024,
including reprogramming the mill expert system, installing advanced
grinding control instrumentation, flotation operational strategy
improvements and improved maintenance practices. In the second half
of 2024, the company is also accelerating various engineering
studies to increase mill throughput to 50,000 tonnes per day
earlier than was originally contemplated in the technical
report.
Hudbay has exceeded the targeted $10 million in
annualized corporate synergies and is on track to realize the
three-year annual operating efficiencies target.
New Britannia Mill Performance Exceeding
Expectations to Drive Higher Gold Production
Hudbay completed the brownfield investment in
New Britannia in 2021 and refurbished the mill to a nominal
capacity of 1,500 tonnes per day. This provided additional
processing capacity to the Snow Lake operations and allowed the
company to achieve higher gold recoveries of approximately 90% as
Lalor transitioned to the higher gold and copper areas of the mine
plan. The New Britannia mill has been consistently exceeding
performance expectations, achieving 1,650 tonnes per day in 2023,
more than 1,850 tonnes per day in the first half of 2024, and a new
monthly record of nearly 2,100 tonnes per day in June 2024.
The final payment for the New Britannia gold
prepay financing in August 2024 further enhances the company’s
exposure to higher gold production in Snow Lake. With approximately
two million ounces of contained gold in current mineral reserve
estimates and another 1.4 million ounces of contained gold in
inferred mineral resources, the New Britannia investment has
unlocked significant value in Snow Lake. This could be further
enhanced by regional exploration upside and the current strong gold
price environment.
In the first quarter of 2024, the company
received a permit approval to increase the production rate at New
Britannia to 2,500 tonnes per day, which will provide the
opportunity to process more Lalor ore at the New Britannia mill and
create additional processing capacity for potential new regional
discoveries in Snow Lake.
Peru Investment Programs to Drive Higher
Copper and Gold Production
The company is well-advanced in executing a
stripping program for the next mining phase at the Pampacancha pit.
This stripping program is expected to continue until September and
is intended to unlock higher copper and gold grades at the Peru
operations in the fourth quarter of 2024.
During the second quarter of 2024, the Peruvian
government approved regulatory changes to allow mining companies to
increase their annual mill throughput levels up to 10% above
permitted levels. Hudbay is evaluating the potential to increase
planned production levels at Constancia, as early as 2026, which
could partially offset the grade declines after the completion of
mining at Pampacancha in late 2025.
Advancing Permitting at Copper
World
The first key state permit required for Copper
World, the Mined Land Reclamation Plan, was initially approved by
the Arizona State Mine Inspector in October 2021 and was
subsequently amended and approved to reflect a larger private land
project footprint. This approval was challenged in state court, but
the challenge was dismissed in May 2023. In late 2022, Hudbay
submitted the applications for an Aquifer Protection Permit and an
Air Quality Permit to the Arizona Department of Environmental
Quality. The public comment period for the Aquifer Protection
Permit was completed in the second quarter while the public comment
period for the Air Quality Permit commenced in July. Hudbay
continues to expect to receive these two outstanding state permits
in the second half of 2024.
Copper World is one of the highest-grade open
pit copper projects in the Americasiii with proven and probable
mineral reserves of 385 million tonnes at 0.54% copper. Copper
World Phase I contemplates average annual copper production of
85,000 tonnes over a 20-year mine life, at average cash costs and
sustaining cash costs of $1.47 and $1.81 per pound of copper,
respectively. In addition, there remains approximately 60% of the
total copper contained in measured and indicated mineral resources
(exclusive of mineral reserves), providing significant potential
for a Phase II expansion and mine life extension. The inferred
mineral resource estimates are at a comparable copper grade and
also provide significant upside potential. Copper World is expected
to provide meaningful copper to support the U.S. domestic supply
chain.
Exploration Update
Manitoba Exploration
Lalor Northwest Follow-up Drilling Confirms Two
Mineralized Zones
Hudbay’s 2024 winter drill program included
follow-up drilling of a geophysical anomaly located northwest of
Lalor, which was initially drilled in 2023. Recent positive assay
results at Lalor Northwest confirm the discovery of two mineralized
zones located within 400 metres of the existing Lalor underground
infrastructure, as shown in Figure 1.
In 2023, hole CH2302 intersected two mineralized
zones, including 4.8 metres at 2.97% copper, 2.92 grams per tonne
gold and 80.3 grams per tonne of silver. Earlier in 2024, hole
CH2406 intersected the same two mineralized zones, including 9.0
metres of 2.88% copper, 6.27 grams per tonne of gold and 88.9 grams
per tonne of silver. See “Qualified Person and NI 43-101”.
These promising results justified additional
follow-up drilling in the summer of 2024 with two drill rigs
currently turning at Lalor Northwest. Drilling results are expected
to be received by the end of the year and will be used to determine
the potential size of Lalor Northwest and the potential for future
underground drift development from Lalor for further definition
drilling. Lalor Northwest has the potential to add near-term
production growth at Lalor, extend mine life and create additional
value from the Snow Lake operations.
Snow Lake 2024 Regional Geophysics Program
Identifies Prospective Targets; Summer Drill Program Initiated
During the first half of 2024, Hudbay conducted
the company’s largest geophysics program in its history in Snow
Lake. This program resulted in the identification of a number of
anomalies and prospective targets across the Snow Lake tenements
which are currently being tested near the former Reed and Anderson
mines and in the vicinity of the Bur and Rail deposits that were
acquired as part of the Rockcliff transaction. Hudbay intends to
continue similar size geophysical programs and mapping of the
company’s consolidated land package in the region in 2025.
The 2024 geophysical program included surface
electromagnetic (EM) surveys covering a 25 square kilometre area,
as highlighted in Figure 2, including the recently acquired Cook
Lake claims that had been previously untested by modern deep
geophysics, which was the discovery method for the Lalor deposit.
This surface EM survey used cutting-edge techniques that enabled
the team to detect deep targets at depths of over 1,000 metres
below surface. The new EM methodology is unique to Hudbay and will
lead to advanced understanding of the mineralization at depths
previously undetectable.
In addition, one very strong deep anomaly
located at Cook Lake North, approximately six kilometres from
Lalor, was identified through borehole EM surveys. 2024 drilling
intersected multiple horizons of non-economic mineralization but a
deeper and stronger conductor will be tested in the coming weeks by
extending the drill hole at depth as part of the summer-fall 2024
exploration program.
Hudbay continues to execute its 2024 drilling
program with the goal of extending known mineralization near the
Lalor deposit to further extend mine life as well as to find a new
anchor deposit within trucking distance of the Snow Lake processing
infrastructure. The 2024 summer drill program is well underway, and
the team currently has six drill rigs turning in Snow Lake,
including two drills at Lalor Northwest as mentioned above. The
company expects to ramp up to eight drill rigs by the end of August
to test new geophysical targets and complete follow-up drilling at
potential regional satellite deposits. Results from the summer
drill program are expected in late 2024.
Advancing Access to the 1901 Deposit
In the first quarter of 2024, Hudbay commenced
the development of a smaller profile drift from the existing Lalor
ramp towards the 1901 deposit. The 1901 development drift is
expected to reach the mineralization in early 2025, following which
the company plans to conduct definition drilling intended to
confirm the optimal mining method, evaluate the orebody geometry
and continuity, and convert inferred mineral resources in the gold
lenses to mineral reserves. Pending positive results from the
drilling programs, the plan is to initiate a haulage drift and
other related mining infrastructure in 2025 and 2026 in
anticipation of full production from the 1901 deposit in 2027.
Continuing to Advance Studies for Flin Flon
Tailings Reprocessing
Hudbay continues to advance studies to evaluate
the opportunity to reprocess Flin Flon tailings where more than 100
million tonnes of tailings have been deposited for over 90 years
from the mill and the zinc plant. The studies are evaluating the
potential to re-purpose the existing Flin Flon concentrator, which
is currently on care and maintenance, with flow sheet modifications
to reprocess tailings to recover critical minerals and precious
metals while creating environmental and social benefits for the
region.
The company continues to advance metallurgical
test work, and during the second quarter of 2024, it received
results from the initial confirmatory drill program in the section
of the tailings facility that was utilized by the zinc plant. The
results confirmed the grades of precious metals and critical
minerals previously estimated from historical zinc plant records.
An early economic study to evaluate the opportunity to reprocess
initially the portion where the zinc plant tailings were deposited
has shown promising results that warrant further engineering work
in the second half of 2024. A similar study is planned with respect
to the mill tailings.
Peru Exploration
Hudbay controls a large, contiguous block of
mineral rights with the potential to host 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. As part of the drill permitting process, environmental impact
assessment applications were submitted for the Maria Reyna property
in November 2023 and for the Caballito property in April 2024. The
environmental impact assessment (EIA) for Maria Reyna was approved
by the government in June 2024 and the Caballito application
continues to make progress through the permitting process. This
represents one of several steps in the drill permitting process,
which is expected to take approximately 12 months to complete after
the EIAs are approved.
New Concentrate Contracts with
Attractive Terms
In light of the extremely tight copper
concentrate market that currently exists, Hudbay has strategically
taken steps to preserve uncommitted copper concentrate units. This
has allowed the company to enter into several new contracts
covering approximately 20% to 25% of its estimated Constancia
concentrate sales over the next four years with favourable
treatment and refining charges (“TC/RC”), including contracts with
fixed TC/RCs that are negative in certain years and other contracts
that have TC/RC priced at significant discounts of 45% to 65% to
market benchmark terms.
Collective Bargaining Agreements
Ratified in Manitoba and Peru
In June, new three-and-a-half year collective
bargaining agreements were ratified by the members of all five
unions at Hudbay’s Manitoba operations, effective July 1, 2024. In
July, a new three-year agreement was signed with the union at
Hudbay’s Peru operations, effective November 10, 2023. The
ratification of these agreements is a significant achievement and
demonstrates Hudbay’s focus on working closely with its employees
and community stakeholders to ensure aligned economic and social
benefits.
Dividend Declared
A semi-annual dividend of C$0.01 per share was
declared on August 12, 2024. The dividend will be paid out on
September 20, 2024 to shareholders of record as of close of
business on September 3, 2024.
Website Links
Hudbay:www.hudbayminerals.comManagement’s
Discussion and
Analysis:https://www.hudbayminerals.com/MDA824Financial
Statements:https://www.hudbayminerals.com/FS824
Conference Call and Webcast
| Date: |
Tuesday,
August 13, 2024 |
| Time: |
11:00 a.m.
ET |
|
Webcast: |
www.hudbay.com |
| Dial
in: |
1-844-763-8274 or 647-484-8814 |
| |
|
Qualified Person and NI
43-101
The technical and scientific information in this
news release related to the company’s material mineral projects has
been approved by Olivier Tavchandjian, P. Geo, Senior Vice
President, Exploration and Technical Services. Mr. Tavchandjian is
a qualified person pursuant to National Instrument 43-101 –
Standards of Disclosure for Mineral Projects (“NI 43-101”).
For a description of the key assumptions,
parameters and methods used to estimate mineral reserves and
resources at Hudbay's material mineral properties, as well as data
verification procedures and a general discussion of the extent to
which the estimates of scientific and technical information may be
affected by any known environmental, permitting, legal title,
taxation, sociopolitical, marketing or other relevant factors,
please see the technical reports for the company’s material
properties as filed by Hudbay on SEDAR+ at www.sedarplus.ca and
EDGAR at www.sec.gov.
Supplemental Information for Lalor Northwest
Drill Holes
|
Hole ID |
From (m) |
To (m) |
Interval (m) |
Estimated True Width (m) |
Cu (%) |
Au (g/t) |
Zn (%) |
Ag (g/t) |
|
CH2406 Upper |
1,116.0 |
1,125.0 |
9.0 |
9.0 |
2.88 |
6.27 |
0.40 |
88.9 |
|
CH2406 Lower |
1,165.4 |
1,168.4 |
3.0 |
3.0 |
1.10 |
0.75 |
0.01 |
4.8 |
Notes: 1. True widths are estimated based on
drill angle and intercept geometry of mineralization. 2. All
copper, gold, zinc and silver values are uncut. 3. No SG data so
assay results are length weighted. 4. Drill holes CH2401, CH2402,
CH2403, CH2404 and CH2405 did not intersect mineralization.
|
Hole ID |
Easting |
Northing |
Elevation |
Depth |
Azimuth |
Dip |
|
CH2401 |
426,527 |
6,081,767 |
304 |
1,217 |
320 |
(77) |
|
CH2402 |
426,458 |
6,081,914 |
302 |
1,259 |
350 |
(78) |
|
CH2403 |
426,458 |
6,081,914 |
302 |
1,286 |
335 |
(79) |
|
CH2404 |
426,577 |
6,081,893 |
304 |
1,376 |
355 |
(81) |
|
CH2405 |
426,458 |
6,081,914 |
302 |
629 |
20 |
(79) |
|
CH2406 |
426,458 |
6,081,914 |
302 |
1,340 |
10 |
(78) |
For further information regarding hole CH2302,
please refer to the company’s news release dated July 27, 2023.
Non-IFRS Financial Performance
Measures
Adjusted net earnings (loss) attributable to
owners, adjusted net earnings (loss) per share attributable to
owners, adjusted EBITDA, net debt, cash cost, sustaining and all-in
sustaining cash cost per pound of copper produced, cash cost and
sustaining cash cost per ounce of gold produced, combined unit
costs and ratios based on these measures are non-IFRS performance
measures. These measures do not have a meaning prescribed by IFRS
and are therefore unlikely to be comparable to similar measures
presented by other issuers. These measures should not be considered
in isolation or as a substitute for measures prepared in accordance
with IFRS and are not necessarily indicative of operating gross
profit or cash flow from operations as determined under IFRS. Other
companies may calculate these measures differently.
Management believes adjusted net earnings (loss)
attributable to owners and adjusted net earnings (loss) per share
attributable to owners provides an alternate measure of the
company’s performance for the current period and gives insight into
its expected performance in future periods. These measures are used
internally by the company to evaluate the performance of its
underlying operations and to assist with its planning and
forecasting of future operating results. As such, the company
believes these measures are useful to investors in assessing the
company’s underlying performance. Hudbay provides adjusted EBITDA
to help users analyze the company’s results and to provide
additional information about its ongoing cash generating potential
in order to assess its capacity to service and repay debt, carry
out investments and cover working capital needs. Net debt is shown
because it is a performance measure used by the company to assess
its financial position. Net debt to adjusted EBITDA is shown
because it is a performance measure used by the company to assess
its financial leverage and debt capacity. Cash cost, sustaining and
all-in sustaining cash cost per pound of copper produced are shown
because the company believes they help investors and management
assess the performance of its operations, including the margin
generated by the operations and the company. Cash cost and
sustaining cash cost per ounce of gold produced are shown because
the company believes they help investors and management assess the
performance of its Manitoba operations. Combined unit cost is shown
because Hudbay believes it helps investors and management assess
the company’s cost structure and margins that are not impacted by
variability in by-product commodity prices.
The following tables provide detailed
reconciliations to the most comparable IFRS measures.
Adjusted Net Earnings (Loss) Attributable to
Owners Reconciliation
|
|
Three Months Ended |
|
(in $ millions) |
Jun. 30, 2024 |
Mar. 31, 2024 |
Jun. 30, 2023 |
|
Net earnings for the period |
(20.4) |
|
18.5 |
|
(14.9) |
|
|
Tax expense |
20.8 |
|
49.3 |
|
(15.8) |
|
|
Earnings before tax |
0.4 |
|
67.8 |
|
(30.7) |
|
|
Adjusting items: |
|
|
|
|
Mark-to-market adjustments 1 |
19.5 |
|
12.8 |
|
0.6 |
|
|
Foreign exchange loss |
2.1 |
|
4.8 |
|
1.4 |
|
|
Re-evaluation adjustment - environmental provision2 |
(2.7) |
|
(5.3) |
|
(4.7) |
|
|
Variable consideration adjustment - stream revenue and
accretion |
— |
|
4.0 |
|
— |
|
|
Inventory adjustments |
— |
|
— |
|
0.9 |
|
|
Acquisition related costs |
— |
|
— |
|
6.8 |
|
|
Reduction of obligation to renounce flow-through expenditures |
(0.3) |
|
(0.7) |
|
— |
|
|
Restructuring charges |
0.3 |
|
0.9 |
|
— |
|
|
Loss on disposal of investments |
— |
|
— |
|
|
|
Write-down/loss on disposal of PP&E |
2.1 |
|
9.0 |
|
0.3 |
|
|
Adjusted earnings before income taxes |
21.4 |
|
93.3 |
|
(25.4) |
|
|
Tax expense |
(20.8) |
|
(49.3) |
|
15.8 |
|
|
Tax impact on adjusting items |
(2.4) |
|
13.6 |
|
(8.7) |
|
|
Adjusted net earnings |
(1.8) |
|
57.6 |
|
(18.3) |
|
|
Adjusted net earnings attributable to non-controlling
interest: |
|
|
|
|
Net loss for the period |
3.8 |
|
3.8 |
|
— |
|
|
Adjusting items, including tax impact |
(1.9) |
|
(2.0) |
|
— |
|
|
Adjusted net earnings - attributable to
owners |
0.1 |
|
59.4 |
|
(18.3) |
|
|
Adjusted net earnings ($/share) - attributable to
owners |
0.00 |
|
0.17 |
|
(0.07) |
|
|
Basic weighted average number of common shares outstanding
(millions) |
368.3 |
|
350.8 |
|
272.2 |
|
|
1 Includes changes in fair value of the gold prepayment liability,
Canadian junior mining investments, other financial assets and
liabilities at fair value through net earnings or loss and
share-based compensation
expenses.
2 Changes from movements to environmental reclamation provisions
are primarily related to the Flin Flon operations, which were fully
depreciated as of June 30, 2022, as well as other Manitoba
non-operating sites. |
Adjusted EBITDA Reconciliation
|
|
Three Months Ended |
|
(in $ millions) |
Jun. 30, 2024 |
Mar. 31, 2024 |
Jun. 30, 2023 |
|
Net (loss) earnings for the period |
(20.4) |
|
18.5 |
|
(14.9) |
|
|
Add back: |
|
|
|
|
Tax expense (recovery) |
20.8 |
|
49.3 |
|
(15.8) |
|
|
Net finance expense |
44.3 |
|
44.0 |
|
30.5 |
|
|
Other expenses |
11.2 |
|
16.3 |
|
13.9 |
|
|
Depreciation and amortization |
97.6 |
|
109.3 |
|
88.7 |
|
|
Amortization of deferred revenue and variable consideration
adjustment |
(11.5) |
|
(23.2) |
|
(18.1) |
|
|
Adjusting items (pre-tax): |
|
|
|
|
Re-evaluation adjustment - environmental provision |
(2.7) |
|
(5.3) |
|
(4.7) |
|
|
Inventory adjustments |
— |
|
— |
|
0.9 |
|
|
Option agreement proceeds |
— |
|
(0.4) |
|
— |
|
|
Realized loss on non-QP hedges |
(2.6) |
|
— |
|
— |
|
|
Share-based compensation expenses 1 |
8.3 |
|
5.7 |
|
0.7 |
|
|
Adjusted EBITDA |
145.0 |
|
214.2 |
|
81.2 |
|
| 1 Share-based
compensation expenses reflected in cost of sales and selling and
administrative expenses. |
Net Debt Reconciliation
|
(in $ thousands) |
|
|
|
Jun. 30, 2024 |
Mar. 31, 2024 |
Dec. 31, 2023 |
|
Total long-term debt |
1,155,575 |
|
1,278,587 |
|
1,287,536 |
|
|
Less: Cash and cash equivalents |
(483,767) |
|
(284,385) |
|
(249,794) |
|
|
Less: Short-term investments |
(40,000) |
|
— |
|
— |
|
|
Net debt |
631,808 |
|
994,202 |
|
1,037,742 |
|
|
(in $ millions, except net debt to adjusted EBITDA ratio) |
|
|
|
|
Net debt |
631.8 |
|
994.2 |
|
1,037.7 |
|
|
Adjusted EBITDA (12-month period) |
824.3 |
|
760.5 |
|
647.8 |
|
|
Net debt to adjusted EBITDA |
0.8 |
|
1.3 |
|
1.6 |
|
|
Trailing Adjusted EBITDA |
Three Months Ended |
|
(in $ millions) |
Jun. 30, 2024 |
Mar. 31, 2024 |
Dec. 31, 2023 |
Sept. 30, 2023 |
Jun. 30, 2023 |
Mar. 31, 2023 |
|
Net earnings (loss) for the period |
(20.4) |
18.5 |
33.5 |
45.5 |
(14.9) |
5.4 |
|
Add back: |
|
|
|
|
|
|
|
Tax expense (recovery) |
20.8 |
49.3 |
47.5 |
38.7 |
(15.8) |
12.0 |
|
Net finance expense |
44.3 |
44.0 |
48.9 |
30.9 |
30.5 |
35.0 |
|
Other expenses |
11.2 |
16.3 |
10.6 |
8.9 |
13.9 |
5.0 |
|
Depreciation and amortization |
97.6 |
109.3 |
121.9 |
113.8 |
88.7 |
67.4 |
|
Amortization of deferred revenue and variable consideration
adjustment |
(11.5) |
(23.2) |
(26.5) |
(16.8) |
(18.1) |
(15.9) |
|
Adjusting items (pre-tax): |
|
|
|
|
|
|
|
Re-evaluation adjustment - environmental provision |
(2.7) |
(5.3) |
34.0 |
(32.4) |
(4.7) |
(8.2) |
|
Inventory adjustments |
— |
— |
1.4 |
— |
0.9 |
— |
|
Realized loss on non-QP hedges |
(2.6) |
— |
— |
— |
— |
— |
|
Post-employment plan curtailment |
— |
(0.4) |
— |
— |
— |
— |
|
Share-based compensation expenses2 |
8.3 |
5.7 |
3.1 |
2.1 |
0.7 |
1.2 |
|
Adjusted EBITDA |
145.0 |
214.2 |
274.4 |
190.7 |
81.2 |
101.9 |
|
LTM1,3 |
824.3 |
760.5 |
647.8 |
|
|
|
| 1 LTM (last twelve
months) as of June 30, 2024, March 31, 2024 and December 31, 2023.
2 Share-based compensation expense reflected in cost of sales and
administrative expenses. 3 Annual consolidated results may not be
calculated based on amounts presented in this table due to
rounding. |
Copper Cash Cost Reconciliation
|
Consolidated |
Three Months Ended |
|
Net pounds of copper
produced1 |
|
|
|
|
(in thousands) |
Jun. 30, 2024 |
Mar. 31, 2024 |
Jun. 30, 2023 |
|
Peru |
42,366 |
54,181 |
38,982 |
|
British Columbia2 |
14,813 |
15,485 |
— |
|
Manitoba |
5,825 |
6,942 |
6,160 |
|
Net pounds of copper produced |
63,004 |
76,608 |
45,142 |
| 1 Contained copper
in concentrate. 2 The net pounds of copper produced for British
Columbia are only included from the date of acquisition of June 20,
2023. There are no comparative figures for the three months ended
June 30, 2023. |
|
Consolidated |
Three Months Ended |
|
|
Jun. 30, 2024 |
Mar. 31, 2024 |
Jun. 30, 2023 |
|
Cash cost per pound of copper produced |
$000s |
$/lb |
$000s |
$/lb |
$000s |
$/lb |
|
Mining |
93,049 |
1.47 |
102,133 |
1.33 |
73,335 |
1.62 |
|
Milling |
88,065 |
1.40 |
83,474 |
1.09 |
69,869 |
1.55 |
|
G&A |
35,240 |
0.56 |
38,335 |
0.50 |
20,975 |
0.47 |
|
Onsite costs |
216,354 |
3.43 |
223,942 |
2.92 |
164,179 |
3.64 |
|
Treatment & refining |
22,562 |
0.36 |
27,664 |
0.36 |
26,670 |
0.59 |
|
Freight & other |
21,728 |
0.34 |
27,062 |
0.36 |
17,766 |
0.39 |
|
Cash cost, before by-product credits |
260,644 |
4.13 |
278,668 |
3.64 |
208,615 |
4.62 |
|
By-product credits |
(188,671) |
(2.99) |
(266,686) |
(3.48) |
(136,417) |
(3.02) |
|
Cash cost, net of by-product credits |
71,973 |
1.14 |
11,982 |
0.16 |
72,198 |
1.60 |
|
Consolidated |
Three Months Ended |
|
|
Jun. 30, 2024 |
Mar. 31, 2024 |
Jun. 30, 2023 |
|
Supplementary cash cost information |
$000s |
$/lb1 |
$000s |
$/lb1 |
$000s |
$/lb1 |
|
By-product credits2: |
|
|
|
|
|
|
|
Zinc |
14,916 |
0.23 |
14,589 |
0.19 |
21,896 |
0.48 |
|
Gold3 |
136,189 |
2.16 |
209,812 |
2.74 |
86,026 |
1.91 |
|
Silver3 |
18,088 |
0.29 |
23,039 |
0.30 |
17,281 |
0.38 |
|
Molybdenum & other |
19,478 |
0.31 |
19,246 |
0.25 |
11,214 |
0.25 |
|
Total by-product credits |
188,671 |
2.99 |
266,686 |
3.48 |
136,417 |
3.02 |
|
Reconciliation to IFRS: |
|
|
|
|
|
|
|
Cash cost, net of by-product credits |
71,973 |
|
11,982 |
|
72,198 |
|
|
By-product credits |
188,671 |
|
266,686 |
|
136,417 |
|
|
Treatment and refining charges |
(22,562) |
|
(27,664) |
|
(26,670) |
|
|
Share-based compensation expense |
613 |
|
355 |
|
60 |
|
|
Inventory adjustments |
— |
|
(24) |
|
906 |
|
|
Change in product inventory |
9,982 |
|
9,554 |
|
15,114 |
|
|
Royalties |
1,570 |
|
2,873 |
|
2,578 |
|
|
Depreciation and amortization4 |
97,646 |
|
109,273 |
|
88,670 |
|
|
Cost of sales5 |
347,893 |
|
373,035 |
|
289,273 |
|
|
1 Per pound of copper produced. 2 By-product credits are computed
as revenue per consolidated financial statements, amortization of
deferred revenue and pricing and volume adjustments. 3 Gold and
silver by-product credits do not include variable consideration
adjustments with respect to stream arrangements. Variable
consideration adjustments are cumulative adjustments to gold and
silver stream deferred revenue primarily associated with the net
change in mineral reserves and resources or amendments to the mine
plan that would change the total expected deliverable ounces under
the precious metal streaming arrangement. For the three months
ended June 30, 2024 the variable consideration adjustments amounted
to nil, the three months ended March 31, 2024 expense of $3,845,
and for the three months ended June 30, 2023 nil. 4 Depreciation is
based on concentrate sold. 5As per consolidated interim financial
statements. |
|
Peru |
Three Months Ended |
|
(in thousands) |
Jun. 30, 2024 |
Mar. 31, 2024 |
Jun. 30, 2023 |
|
Net pounds of copper
produced1 |
42,366 |
54,181 |
38,982 |
|
1 Contained copper in concentrate. |
|
Peru |
Three Months Ended |
|
|
Jun. 30, 2024 |
Mar. 31, 2024 |
Jun. 30, 2023 |
|
Cash cost per pound of copper produced |
$000s |
$/lb |
$000s |
$/lb |
$000s |
$/lb |
|
Mining |
31,306 |
0.74 |
29,220 |
0.54 |
31,654 |
0.81 |
|
Milling |
51,335 |
1.21 |
43,624 |
0.80 |
54,676 |
1.40 |
|
G&A |
19,349 |
0.46 |
23,092 |
0.43 |
14,867 |
0.38 |
|
Onsite costs |
101,990 |
2.41 |
95,936 |
1.77 |
101,197 |
2.59 |
|
Treatment & refining |
11,081 |
0.26 |
14,975 |
0.28 |
17,097 |
0.44 |
|
Freight & other |
12,593 |
0.30 |
16,580 |
0.30 |
12,424 |
0.32 |
|
Cash cost, before by-product credits |
125,664 |
2.97 |
127,491 |
2.35 |
130,718 |
3.35 |
|
By-product credits |
(50,251) |
(1.19) |
(104,329) |
(1.92) |
(47,193) |
(1.21) |
|
Cash cost, net of by-product credits |
75,413 |
1.78 |
23,162 |
0.43 |
83,525 |
2.14 |
|
Peru |
Three Months Ended |
|
|
Jun. 30, 2024 |
Mar. 31, 2024 |
Jun. 30, 2023 |
|
Supplementary cash cost information |
$000s |
$/lb1 |
$000s |
$/lb1 |
$000s |
$/lb1 |
|
By-product credits2: |
|
|
|
|
|
|
|
Gold3 |
21,550 |
|
0.51 |
69,533 |
1.28 |
21,638 |
0.55 |
|
Silver3 |
9,704 |
|
0.23 |
15,550 |
0.29 |
14,341 |
0.37 |
|
Molybdenum |
18,997 |
|
0.45 |
19,246 |
0.35 |
11,214 |
0.29 |
|
Total by-product credits |
50,251 |
|
1.19 |
104,329 |
1.92 |
47,193 |
1.21 |
|
Reconciliation to IFRS: |
|
|
|
|
|
|
|
Cash cost, net of by-product credits |
75,413 |
|
|
23,162 |
|
83,525 |
|
|
By-product credits |
50,251 |
|
|
104,329 |
|
47,193 |
|
|
Treatment and refining charges |
(11,081) |
|
|
(14,975) |
|
(17,097) |
|
|
Share-based compensation expenses |
199 |
|
|
116 |
|
29 |
|
|
Change in product inventory |
1,101 |
|
|
14,077 |
|
27,078 |
|
|
Royalties |
929 |
|
|
2,118 |
|
2,479 |
|
|
Depreciation and amortization4 |
58,860 |
|
|
71,030 |
|
67,340 |
|
|
Cost of sales5 |
175,672 |
|
|
199,857 |
|
210,547 |
|
| 1 Per pound of copper
produced. 2 By-product credits are computed as revenue per
consolidated financial statements, including amortization of
deferred revenue and pricing and volume adjustments. 3 Gold and
silver by-product credits do not include variable consideration
adjustments with respect to stream arrangements. 4 Depreciation is
based on concentrate sold. 5 As per IFRS consolidated interim
financial statements. |
|
British Columbia1 |
|
Three Months Ended |
|
(in thousands) |
|
Jun. 30, 2024 |
Mar. 31, 2024 |
|
Net pounds of copper
produced2 |
|
14,813 |
15,485 |
|
1 Copper Mountain mine results are states at 100%. 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 June 30, 2023. 2 Contained copper in concentrate. |
|
British Columbia1 |
Three Months Ended |
|
|
Jun. 30, 2024 |
Mar. 31, 2024 |
|
Cash cost per pound of copper produced |
$000s |
$/lb |
$000s |
$/lb |
|
Mining |
19,463 |
1.31 |
28,553 |
1.85 |
|
Milling |
21,508 |
1.45 |
23,374 |
1.51 |
|
G&A |
5,442 |
0.37 |
3,897 |
0.25 |
|
Onsite costs |
46,413 |
3.13 |
55,824 |
3.61 |
|
Treatment & refining |
4,199 |
0.29 |
3,476 |
0.22 |
|
Freight & other |
3,461 |
0.23 |
4,293 |
0.28 |
|
Cash cost, before by-product credits |
54,073 |
3.65 |
63,593 |
4.11 |
|
By-product credits |
(14,523) |
(0.98) |
(9,543) |
(0.62) |
|
Cash cost, net of by-product credits |
39,550 |
2.67 |
54,050 |
3.49 |
|
British Columbia1 |
Three Months Ended |
|
|
Jun. 30, 2024 |
Mar. 31, 2024 |
|
Supplementary cash cost information |
$000s |
$/lb2 |
$000s |
$/lb2 |
|
By-product credits3: |
|
|
|
|
|
Gold |
12,204 |
0.82 |
7,564 |
0.49 |
|
Silver |
2,319 |
0.16 |
1,979 |
0.13 |
|
Total by-product credits |
14,523 |
0.98 |
9,543 |
0.62 |
|
Reconciliation to IFRS: |
|
|
|
|
|
Cash cost, net of by-product credits |
39,550 |
|
54,050 |
|
|
By-product credits |
14,523 |
|
9,543 |
|
|
Treatment and refining charges |
(4,199) |
|
(3,476) |
|
|
Share-based compensation expenses |
— |
|
5 |
|
|
Change in product inventory |
11,290 |
|
(3,965) |
|
|
Royalties |
641 |
|
755 |
|
|
Depreciation and amortization4 |
14,042 |
|
11,649 |
|
|
Cost of sales4 |
75,847 |
|
68,561 |
|
|
1 Copper Mountain mine results are states at 100%. 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 June 30, 2023. 2 Per pound of copper produced. 3 By-product
credits are computed as revenue per consolidated financial
statements, including pricing and volume adjustments. 4
Depreciation is based on concentrate sold. 5 As per consolidated
interim financial statements. |
Sustaining and All-in Sustaining Cash Cost
Reconciliation
|
Consolidated |
Three Months Ended |
|
|
Jun. 30, 2024 |
Mar. 31, 2024 |
Jun. 30, 2023 |
|
All-in sustaining cash cost per pound of copper
produced |
$000s |
$/lb |
$000s |
$/lb |
$000s |
$/lb |
|
Cash cost, net of by-product credits |
71,973 |
1.14 |
11,982 |
0.16 |
72,198 |
1.60 |
|
Cash sustaining capital expenditures |
92,973 |
1.48 |
62,314 |
0.80 |
48,253 |
1.07 |
|
Capitalized exploration |
300 |
0.00 |
2,100 |
0.03 |
— |
— |
|
Royalties |
1,570 |
0.03 |
2,873 |
0.04 |
2,578 |
0.06 |
|
Sustaining cash cost, net of by-product
credits |
166,816 |
2.65 |
79,269 |
1.03 |
123,029 |
2.73 |
|
Corporate selling and administrative expenses & regional
costs |
19,771 |
0.32 |
18,094 |
0.24 |
9,603 |
0.21 |
|
Accretion and amortization of decommissioning and community
agreements1 |
6,544 |
0.10 |
4,007 |
0.05 |
1,792 |
0.04 |
|
All-in sustaining cash cost, net of by-product
credits |
193,131 |
3.07 |
101,370 |
1.32 |
134,424 |
2.98 |
|
Reconciliation to property, plant and equipment
additions: |
|
|
|
|
|
|
|
Property, plant and equipment additions |
75,223 |
|
46,220 |
|
47,574 |
|
|
Capitalized stripping net additions |
43,374 |
|
31,983 |
|
21,640 |
|
|
Total accrued capital additions |
118,597 |
|
78,203 |
|
69,214 |
|
|
Less other non-sustaining capital costs2 |
37,665 |
|
26,982 |
|
28,006 |
|
|
Total sustaining capital costs |
80,932 |
|
51,221 |
|
41,208 |
|
|
Capitalized lease and equipment financing payments |
9,575 |
|
8,274 |
|
4,374 |
|
|
Community agreement cash payments |
678 |
|
800 |
|
1,290 |
|
|
Accretion and amortization of decommissioning and restoration
obligations3 |
1,788 |
|
2,019 |
|
1,381 |
|
|
Cash sustaining capital expenditures |
92,973 |
|
62,314 |
|
48,253 |
|
|
1 Includes accretion of decommissioning relating to non-productive
sites, and accretion and amortization of current community
agreements.2 Other non-sustaining capital costs include Arizona
capitalized costs, capitalized interest, capitalized exploration
and growth capital expenditures3 Includes amortization of
decommissioning and restoration PP&E assets and accretion of
decommissioning and restoration liabilities related to producing
sites. |
|
Peru |
Three Months Ended |
|
|
Jun. 30, 2024 |
Mar. 31, 2024 |
Jun. 30, 2023 |
|
Sustaining cash cost per pound of copper
produced |
$000s |
$/lb |
$000s |
$/lb |
$000s |
$/lb |
|
Cash cost, net of by-product credits |
75,413 |
1.78 |
23,162 |
0.43 |
83,525 |
2.14 |
|
Cash sustaining capital expenditures |
33,801 |
0.80 |
29,779 |
0.55 |
33,425 |
0.86 |
|
Capitalized exploration1 |
300 |
0.01 |
2,100 |
0.04 |
— |
— |
|
Royalties |
929 |
0.02 |
2,118 |
0.04 |
2,479 |
0.06 |
|
Sustaining cash cost per pound of copper
produced |
110,443 |
2.61 |
57,159 |
1.06 |
119,429 |
3.06 |
| 1 Only includes
exploration costs incurred for locations near to existing mine
operations. |
|
British Columbia |
Three Months Ended1 |
|
|
Jun. 30, 2024 |
Mar. 31, 2024 |
|
Sustaining cash cost per pound of copper
produced |
$000s |
$/lb |
$000s |
$/lb |
|
Cash cost, net of by-product credits |
39,550 |
2.67 |
54,050 |
3.49 |
|
Cash sustaining capital expenditures |
42,109 |
2.84 |
20,361 |
1.31 |
|
Royalties |
641 |
0.05 |
755 |
0.05 |
|
Sustaining cash cost per pound of copper
produced |
82,300 |
5.56 |
75,166 |
4.85 |
|
1 As Copper Mountain was acquired on June 20, 2023, there were no
comparative figures for the three months ended June 30, 2023. |
Gold Cash Cost and Sustaining Cash Cost
Reconciliation
|
Manitoba |
Three Months Ended |
|
(in thousands) |
Jun. 30, 2024 |
Mar. 31, 2024 |
Jun. 30, 2023 |
|
Net ounces of gold produced1 |
43,488 |
56,831 |
35,253 |
|
1 Contained gold in concentrate and doré. |
|
Manitoba |
Three Months Ended |
|
|
Jun. 30, 2024 |
Mar. 31, 2024 |
Jun. 30, 2023 |
|
Cash cost per ounce of gold produced |
$000s |
$/oz |
$000s |
$/oz |
$000s |
$/oz |
|
Mining |
42,280 |
973 |
44,360 |
780 |
41,681 |
1,182 |
|
Milling |
15,222 |
350 |
16,476 |
290 |
15,193 |
431 |
|
G&A |
10,449 |
240 |
11,346 |
200 |
6,108 |
173 |
|
Onsite costs |
67,951 |
1,563 |
72,182 |
1,270 |
62,982 |
1,786 |
|
Treatment & refining |
7,282 |
167 |
9,213 |
162 |
9,573 |
271 |
|
Freight & other |
5,674 |
130 |
6,189 |
109 |
5,342 |
152 |
|
Cash cost, before by-product credits |
80,907 |
1,860 |
87,584 |
1,541 |
77,897 |
2,209 |
|
By-product credits |
(47,386) |
(1,090) |
(45,734) |
(805) |
(39,218) |
(1,112) |
|
Gold cash cost, net of by-product credits |
33,521 |
771 |
41,850 |
736 |
38,679 |
1,097 |
|
Manitoba |
Three Months Ended |
|
|
Jun. 30, 2024 |
Mar. 31, 2024 |
Jun. 30, 2023 |
|
Supplementary cash cost information |
$000s |
$/oz1 |
$000s |
$/oz1 |
$000s |
$/oz1 |
|
By-product credits2: |
|
|
|
|
|
|
|
Copper |
25,932 |
596 |
25,635 |
451 |
14,382 |
408 |
|
Zinc |
14,916 |
343 |
14,589 |
257 |
21,896 |
621 |
|
Silver3 |
6,065 |
140 |
5,510 |
97 |
2,940 |
83 |
|
Other |
473 |
11 |
— |
— |
— |
— |
|
Total by-product credits |
47,386 |
1,090 |
45,734 |
805 |
39,218 |
1,112 |
|
Reconciliation to IFRS: |
|
|
|
|
|
|
|
Cash cost, net of by-product credits |
33,521 |
|
41,850 |
|
38,679 |
|
|
By-product credits |
47,386 |
|
45,734 |
|
39,218 |
|
|
Treatment and refining charges |
(7,282) |
|
(9,213) |
|
(9,573) |
|
|
Inventory adjustments |
— |
|
(24) |
|
906 |
|
|
Share-based compensation expenses |
414 |
|
234 |
|
31 |
|
|
Change in product inventory |
(2,409) |
|
(558) |
|
(11,964) |
|
|
Royalties |
— |
|
— |
|
99 |
|
|
Depreciation and amortization3 |
24,744 |
|
26,594 |
|
21,330 |
|
|
Cost of sales4 |
96,374 |
|
104,617 |
|
78,726 |
|
|
1 Per ounce of gold produced. 2 By-product credits are computed as
revenue per consolidated interim financial statements, amortization
of deferred revenue and pricing and volume adjustments. 3
Depreciation is based on concentrate sold. 4 As per IFRS
consolidated interim financial statements. |
|
Manitoba |
Three Months Ended |
|
|
Jun. 30, 2024 |
Mar. 31, 2024 |
Jun. 30, 2023 |
|
Sustaining cash cost per pound of gold
produced |
$000s |
$/oz |
$000s |
$/oz |
$000s |
$/oz |
|
Gold cash cost, net of by-product credits |
33,521 |
771 |
41,850 |
736 |
38,679 |
1,097 |
|
Cash sustaining capital expenditures |
17,063 |
392 |
12,173 |
214 |
14,828 |
421 |
|
Royalties |
— |
— |
— |
— |
99 |
3 |
|
Sustaining cash cost per pound of gold
produced |
50,584 |
1,163 |
54,023 |
950 |
53,606 |
1,521 |
Combined Unit Cost Reconciliation
|
Peru |
Three Months Ended |
|
(in thousands except ore tonnes milled and unit cost per
tonne) |
|
Combined unit cost per tonne processed |
Jun. 30, 2024 |
Mar. 31, 2024 |
Jun. 30, 2023 |
|
Mining |
31,306 |
29,220 |
31,654 |
|
Milling |
51,335 |
43,624 |
54,676 |
|
G&A1 |
19,349 |
23,092 |
14,867 |
|
Other G&A2 |
(4,113) |
(7,688) |
458 |
|
Unit Cost |
97,877 |
88,248 |
101,655 |
|
Tonnes ore milled |
7,719 |
8,078 |
7,223 |
|
Combined unit cost per tonne |
12.68 |
10.92 |
14.07 |
|
Reconciliation to IFRS: |
|
|
|
|
Unit cost |
97,877 |
88,248 |
101,655 |
|
Freight & other |
12,593 |
16,580 |
12,424 |
|
Other G&A |
4,113 |
7,688 |
(458) |
|
Share-based compensation expenses |
199 |
116 |
29 |
|
Change in product inventory |
1,101 |
14,077 |
27,078 |
|
Royalties |
929 |
2,118 |
2,479 |
|
Depreciation and amortization |
58,860 |
71,030 |
67,340 |
|
Cost of sales3 |
175,672 |
199,857 |
210,547 |
|
1 G&A as per cash cost reconciliation above. 2 Other G&A
primarily includes profit sharing costs. 3 As per IFRS consolidated
interim financial statements. |
|
Manitoba |
Three Months Ended |
|
(in thousands except tonnes ore milled and unit cost per
tonne) |
|
Combined unit cost per tonne processed |
Jun. 30, 2024 |
Mar. 31, 2024 |
Jun. 30, 2023 |
|
Mining |
42,280 |
44,360 |
41,681 |
|
Milling |
15,222 |
16,476 |
15,193 |
|
G&A1 |
10,449 |
11,346 |
6,108 |
|
Less: Other G&A related to profit sharing costs |
(3,428) |
(4,131) |
(682) |
|
Unit cost |
64,523 |
68,051 |
62,300 |
|
USD/CAD implicit exchange rate |
1.38 |
1.35 |
1.34 |
|
Unit cost - C$ |
89,336 |
91,748 |
83,659 |
|
Tonnes ore milled |
397,426 |
389,767 |
380,538 |
|
Combined unit cost per tonne - C$ |
225 |
235 |
220 |
|
Reconciliation to IFRS: |
|
|
|
|
Unit cost |
64,523 |
68,051 |
62,300 |
|
Freight & other |
5,674 |
6,189 |
5,342 |
|
Other G&A related to profit sharing |
3,428 |
4,131 |
682 |
|
Share-based compensation expenses |
414 |
234 |
31 |
|
Inventory adjustments |
— |
(24) |
906 |
|
Change in product inventory |
(2,409) |
(558) |
(11,964) |
|
Royalties |
— |
— |
99 |
|
Depreciation and amortization |
24,744 |
26,594 |
21,330 |
|
Cost of sales2 |
96,374 |
104,617 |
78,726 |
| 1 G&A as per
cash cost reconciliation above. 2 As per IFRS consolidated interim
financial statements. |
|
British Columbia |
Three Months Ended3 |
|
Combined unit cost per tonne processed |
Jun. 30, 2024 |
Mar. 31, 2024 |
|
Mining |
19,463 |
28,553 |
|
Milling |
21,508 |
23,374 |
|
G&A1 |
5,442 |
3,897 |
|
Unit cost |
46,413 |
55,824 |
|
USD/CAD implicit exchange rate |
1.35 |
1.35 |
|
Unit cost - C$ |
63,522 |
75,282 |
|
Tonnes ore milled |
3,232 |
3,180 |
|
Combined unit cost per tonne - C$ |
19.65 |
23.67 |
|
Reconciliation to IFRS: |
|
|
|
Unit cost |
46,413 |
55,824 |
|
Freight & other |
3,461 |
4,293 |
|
Share-based compensation expenses |
— |
5 |
|
Change in product inventory |
11,290 |
(3,965) |
|
Royalties |
641 |
755 |
|
Depreciation and amortization |
14,042 |
11,649 |
|
Cost of sales2 |
75,847 |
68,561 |
| 1 G&A
as per cash cost reconciliation above.2 As per consolidated
financial statements. 3 As Copper Mountain was acquired on June 20
2023, there were no comparative figures for the three months ended
June 30, 2023. |
|
|
Forward-Looking Information
This news release contains forward-looking information within the
meaning of applicable Canadian and United States securities
legislation. All information contained in this news release, other
than statements of current and historical fact, is forward-looking
information. Often, but not always, forward-looking information can
be identified by the use of words such as “plans”, “expects”,
“budget”, “guidance”, “scheduled”, “estimates”, “forecasts”,
“strategy”, “target”, “intends”, “objective”, “goal”,
“understands”, “anticipates” and “believes” (and variations of
these or similar words) and statements that certain actions, events
or results “may”, “could”, “would”, “should”, “might” “occur” or
“be achieved” or “will be taken” (and variations of these or
similar expressions). All of the forward-looking information in
this news release is qualified by this cautionary note.
Forward-looking information includes, but is not
limited to, statements with respect to the company’s production,
cost and capital and exploration expenditure guidance, expectations
regarding reductions in discretionary spending and capital
expenditures, the ability of the company to stabilize and optimize
the Copper Mountain mine operation, the fleet production ramp up
plan at the Copper Mountain site and the expected benefits
therefrom, the ability of the company to complete business
integration activities at the Copper Mountain mine, the
implementation of stripping strategies in Peru and British Columbia
and the expected benefits therefrom, the estimated timelines and
pre-requisites for sanctioning the Copper World project and the
pursuit of a potential minority joint venture partner, expectations
regarding the permitting requirements for the Copper World project
(including expected timing for receipt of such applicable permits),
the expected benefits of Manitoba growth initiatives, including the
exploration drift at the 1901 deposit, the company’s future
deleveraging strategies and the company’s ability to deleverage and
repay debt as needed, the timing of any future payments to be made
under the company’s gold prepay liability, expectations regarding
the company’s cash balance and liquidity, the company’s ability to
increase the mining rate at Lalor, expectations regarding the
ability to conduct exploration work and execute on exploration
programs on its properties and to advance related drill plans,
including the advancement of the exploration program at Maria Reyna
and Caballito and the status of the related drill permit
application process, the ability to continue mining higher-grade
ore in the Pampacancha pit and the company’s expectations resulting
therefrom, expectations regarding the ability for the company to
further reduce greenhouse gas emissions, the company’s evaluation
and assessment of opportunities to reprocess tailings using various
metallurgical technologies, expectations regarding the prospective
nature of the Maria Reyna and Caballito properties, the anticipated
impact of brownfield and greenfield growth projects on the
company’s performance, anticipated expansion opportunities and
extension of mine life in Snow Lake and the ability for Hudbay to
find a new anchor deposit near the company’s Snow Lake operations,
anticipated future drill programs and exploration activities and
any results expected therefrom, anticipated mine plans, anticipated
metals prices and the anticipated sensitivity of the company’s
financial performance to metals prices, events that may affect its
operations and development projects, anticipated cash flows from
operations and related liquidity requirements, the anticipated
effect of external factors on revenue, such as commodity prices,
estimation of mineral reserves and resources, mine life
projections, reclamation costs, economic outlook, government
regulation of mining operations, and business and acquisition
strategies. Forward-looking information is not, and cannot be, a
guarantee of future results or events. Forward-looking information
is based on, among other things, opinions, assumptions, estimates
and analyses that, while considered reasonable by the company at
the date the forward-looking information is provided, inherently
are subject to significant risks, uncertainties, contingencies and
other factors that may cause actual results and events to be
materially different from those expressed or implied by the
forward-looking information.
The material factors or assumptions that Hudbay
has identified and were applied in drawing conclusions or making
forecasts or projections set out in the forward-looking information
include, but are not limited to:
- the ability to achieve production, cost and capital and
exploration expenditure guidance;
- the ability to achieve discretionary spending reductions
without impacting operations;
- no significant interruptions to operations due to social or
political unrest in the regions Hudbay operates, including the
navigation of the complex political and social environment in
Peru;
- no interruptions to the company’s plans for advancing the
Copper World project, including with respect to timely receipt of
applicable permits and the pursuit of a potential joint venture
partner;
- the ability for the company to successfully complete the
integration and optimization of the Copper Mountain operations,
achieve operating synergies and develop and maintain good relations
with key stakeholders;
- the ability to execute on its exploration plans and to advance
related drill plans;
- the ability to advance the exploration program at Maria Reyna
and Caballito;
- the success of mining, processing, exploration and development
activities;
- the scheduled maintenance and availability of the company’s
processing facilities;
- the accuracy of geological, mining and metallurgical
estimates;
- anticipated metals prices and the costs of production;
- the supply and demand for metals the company produces;
- the supply and availability of all forms of energy and fuels at
reasonable prices;
- no significant unanticipated operational or technical
difficulties;
- no significant interruptions to operations due to adverse
effects from extreme weather events, including but not limited to
forest fires that may affect the regions in which the company
operates;
- the execution of the company’s business and growth strategies,
including the success of its strategic investments and
initiatives;
- the availability of additional financing, if needed;
- the company’s ability to deleverage and repay debt as
needed;
- the ability to complete project targets on time and on budget
and other events that may affect the company’s ability to develop
its projects;
- the timing and receipt of various regulatory and governmental
approvals;
- the availability of personnel for the company’s exploration,
development and operational projects and ongoing employee
relations;
- maintaining good relations with the employees at the company’s
operations;
- maintaining good relations with the labour unions that
represent certain of the company’s employees in Manitoba and
Peru;
- maintaining good relations with the communities in which the
company operates, including the neighbouring Indigenous communities
and local governments;
- no significant unanticipated challenges with stakeholders at
the company’s various projects;
- no significant unanticipated events or changes relating to
regulatory, environmental, health and safety matters;
- no contests over title to the company’s properties, including
as a result of rights or claimed rights of Indigenous peoples or
challenges to the validity of the company’s unpatented mining
claims;
- the timing and possible outcome of pending litigation and no
significant unanticipated litigation;
- certain tax matters, including, but not limited to current tax
laws and regulations, changes in taxation policies and the refund
of certain value added taxes from the Canadian and Peruvian
governments; and
- no significant and continuing adverse changes in general
economic conditions or conditions in the financial markets
(including commodity prices and foreign exchange rates).
The risks, uncertainties, contingencies and
other factors that may cause actual results to differ materially
from those expressed or implied by the forward-looking information
may include, but are not limited to, risks related to the ongoing
business integration of Copper Mountain, the failure to effectively
complete the integration and optimization of the Copper Mountain
operations, political and social risks in the regions Hudbay
operates, including the navigation of the complex political and
social environment in Peru, risks generally associated with the
mining industry and the current geopolitical environment, including
future commodity prices, currency and interest rate fluctuations,
energy and consumable prices, supply chain constraints and general
cost escalation in the current inflationary environment,
uncertainties related to the development and operation of the
company’s projects, the risk of an indicator of impairment or
impairment reversal relating to a material mineral property, risks
related to the Copper World project, including in relation to
permitting, project delivery and financing risks, risks related to
the Lalor mine plan, including the ability to convert inferred
mineral resource estimates to higher confidence categories,
dependence on key personnel and employee and union relations, risks
related to political or social instability, unrest or change, risks
in respect of Indigenous and community relations, rights and title
claims, risks related to extreme weather events, including forest
fires that may affect the regions in which the company operates and
other severe storms, operational risks and hazards, including the
cost of maintaining and upgrading the company's tailings management
facilities and any unanticipated environmental, industrial and
geological events and developments and the inability to insure
against all risks, failure of plant, equipment, processes,
transportation and other infrastructure to operate as anticipated,
compliance with government and environmental regulations, including
permitting requirements and anti-bribery legislation, depletion of
the company’s reserves, volatile financial markets and interest
rates that may affect the company’s ability to obtain additional
financing on acceptable terms, the failure to obtain required
approvals or clearances from government authorities on a timely
basis, uncertainties related to the geology, continuity, grade and
estimates of mineral reserves and resources, and the potential for
variations in grade and recovery rates, uncertain costs of
reclamation activities, the company’s ability to comply with its
pension and other post-retirement obligations, the company’s
ability to abide by the covenants in its debt instruments and other
material contracts, tax refunds, hedging transactions, as well as
the risks discussed under the heading “Risk Factors” in the
company’s most recent Annual Information Form, which is available
on the company’s SEDAR+ profile at www.sedarplus.ca and the
company’s EDGAR profile at www.sec.gov.
Should one or more risk, uncertainty,
contingency or other factor materialize or should any factor or
assumption prove incorrect, actual results could vary materially
from those expressed or implied in the forward-looking information.
Accordingly, you should not place undue reliance on forward-looking
information. Hudbay does not assume any obligation to update or
revise any forward-looking information after the date of this news
release or to explain any material difference between subsequent
actual events and any forward-looking information, except as
required by applicable law.
Note to United States
Investors
This news release has been prepared in
accordance with the requirements of the securities laws in effect
in Canada, which may differ materially from the requirements of
United States securities laws applicable to U.S. issuers.
About Hudbay
Hudbay (TSX, NYSE: HBM) is a copper-focused
mining company with three long-life operations and a world-class
pipeline of copper growth projects in tier-one mining-friendly
jurisdictions of Canada, Peru and the United States.
Hudbay’s operating portfolio includes the
Constancia mine in Cusco (Peru), the Snow Lake operations in
Manitoba (Canada) and the Copper Mountain mine in British Columbia
(Canada). Copper is the primary metal produced by the company,
which is complemented by meaningful gold production. Hudbay’s
growth pipeline includes the Copper World project in Arizona
(United States), the Mason project in Nevada (United States), the
Llaguen project in La Libertad (Peru) and several expansion and
exploration opportunities near its existing operations.
The value Hudbay creates and the impact it has
is embodied in its purpose statement: “We care about our people,
our communities and our planet. Hudbay provides the metals the
world needs. We work sustainably, transform lives and create better
futures for communities.” Hudbay’s mission is to create sustainable
value and strong returns by leveraging its core strengths in
community relations, focused exploration, mine development and
efficient operations.
For further information, please
contact:
Candace Brûlé Vice President, Investor Relations
(416) 814-4387 investor.relations@hudbay.com
Figure 1: Lalor Northwest Follow-up
Drilling Confirms Two Mineralized Zones Recent positive
assay results at Lalor Northwest confirm the discovery of two
mineralized zones located within 400 metres of the existing Lalor
underground infrastructure and have the potential to add near-term
production growth at Lalor and extend mine life at Hudbay’s Snow
Lake operations.
Figure 2: Snow Lake 2024 Regional
Geophysics Program Identifies Prospective Targets The 2024
geophysical program included surface electromagnetic (EM) surveys
covering a 25 square kilometre area, including the recently
acquired Cook Lake claims that had been previously untested by
modern deep geophysics. This new surface EM methodology is unique
to Hudbay and detects deep targets at depths of over 1,000 metres
below surface. In addition, one very strong deep borehole EM
conductor at Cook Lake North will be drill tested in the coming
weeks by extending the drill hole to a depth of approximate 2,400
metres.
____________________ i Adjusted net earnings
(loss) attributable to owners and adjusted net earnings (loss) per
share attributable to owners; adjusted EBITDA; cash cost,
sustaining cash cost and all-in sustaining cash cost per pound of
copper produced, net of by-product credits; cash cost and
sustaining cash cost per ounce of gold produced, net of by-product
credits; combined unit costs, net debt and any ratios based on
these measures are non-IFRS financial performance measures with no
standardized definition under IFRS. For further information and a
detailed reconciliation, please see the “Non-IFRS Financial
Performance Measures” section of this news release. ii Second
quarter 2023 results only include a 10-day stub period of
production from British Columbia following the June 20, 2023
transaction closing date. iii Sourced from S&P Global, August
2023.
Photos accompanying this announcement are available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/38d30685-941a-47cb-9fb4-e90144d02e71
https://www.globenewswire.com/NewsRoom/AttachmentNg/66e3f63b-4997-420e-9862-2f7e5a7d2d22
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