Le Lézard
Classified in: Mining industry, Business
Subject: EARNINGS

Hudbay Delivers Record Fourth Quarter and Full Year 2023 Results and Provides Annual Guidance


TORONTO, Feb. 23, 2024 (GLOBE NEWSWIRE) -- Hudbay Minerals Inc. ("Hudbay" or the "company") (TSX, NYSE: HBM) today released its fourth quarter and full year 2023 financial results, and announced 2024 annual production and cost guidance. 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.

Delivering Record Fourth Quarter and Full Year Operating and Financial Results

Strong Operating Performance Driving Free Cash Flow Generation with Continued Financial Discipline

Executing on Growth Initiatives

"We had a strong end to the year with increased copper production, record gold production and record financial performance in the fourth quarter, resulting in the successful achievement of our annual guidance metrics," said Peter Kukielski, President and Chief Executive Officer. "2023 was a year of execution and delivery as we realized the higher grades in Peru, achieved record gold production in Manitoba and enhanced our operating base with the addition of the Copper Mountain mine. We continued to demonstrate financial discipline in 2023 through reduced discretionary spending to drive free cash flow generation and debt reduction. These 2023 achievements are a testament to our outstanding team, which continues to deliver the plan while always operating safely and efficiently. Our commitment to continued financial discipline, together with our resilient operating platform, will allow us to prudently advance and unlock value from our leading organic pipeline of brownfield expansion and greenfield exploration and development opportunities."

2024 Annual Guidance and Outlook

Summary of Fourth Quarter Results

Consolidated copper production in the fourth quarter of 2023 was 45,450 tonnes, an 8% increase from the third quarter of 2023, while consolidated gold production was 112,776 ounces, an 11% increase, and consolidated silver production was 1,197,082 ounces, a 13% increase. The increases in production were primarily due to continued high recoveries in Peru and Manitoba, mining of the high copper and gold grade zones at the Pampacancha deposit and higher gold and copper grade zones at Lalor, record throughput at the New Britannia gold mill, and incremental production from the Copper Mountain mine. Consolidated zinc production in the fourth quarter of 2023 decreased compared to the prior quarter primarily due to lower base metals throughput and lower zinc grades at Lalor, as planned.

Cash generated from operating activities in the fourth quarter of 2023 increased by 50% to $228.5 million compared to $151.9 million in the third quarter of 2023. Operating cash flow before change in non-cash working capital was a record $246.5 million, reflecting an increase of $64.5 million compared to the third quarter. The increase in operating cash flow before change in non-cash working capital was primarily the result of higher copper and gold sales volumes from mining the high copper and gold grade zones of the Pampacancha deposit and higher gold and copper grade zones at Lalor and higher copper and gold metal prices.

Net earnings and earnings per share in the fourth quarter of 2023 were $33.5 million and $0.10, respectively, compared to net earnings and earnings per share of $45.5 million and $0.13, respectively in the third quarter. The results were positively impacted by higher copper, gold and silver sales volumes as well as higher copper, gold and silver realized prices. This was partially offset by a non-cash loss of $34.0 million related to the quarterly revaluation of the environmental reclamation provision at closed sites and a non-cash revaluation loss of $9.0 million related to the gold prepayment liability.

Adjusted net earningsi and adjusted net earnings per sharei in the fourth quarter of 2023 were $71.3 million and $0.20 per share, respectively, after adjusting for the non-cash loss related to the revaluation of the company's environmental provision and the revaluation loss on the gold prepayment liability, among other items. This compares to adjusted net earnings and adjusted net earnings per share of $24.4 million, and $0.07 in the prior quarter. Fourth quarter adjusted EBITDAi was $274.4 million, an increase of 44% compared to $190.7 million in the third quarter of 2023.

In the fourth quarter of 2023, consolidated cash cost per pound of copper produced, net of by-product creditsi, was $0.16, compared to $1.10 in the third quarter. Consolidated sustaining cash cost per pound of copper produced, net of by-product creditsi, was $1.09 in the fourth quarter of 2023 compared to $1.89 in the third quarter. The significant decrease in both was the result of higher copper production and higher by-product credits, partially offset by higher mining, milling and G&A costs from incorporating Copper Mountain.

Consolidated all-in sustaining cash cost per pound of copper produced, net of by-product creditsi, was $1.31 in the fourth quarter of 2023, lower than $2.04 in the third quarter, due to the same reasons outlined above as well as lower corporate selling and administrative expenses.

As at December 31, 2023, total liquidity increased to $573.7 million, including $249.8 million in cash and cash equivalents as well as undrawn availability of $323.9 million under the company's revolving credit facilities. Net debt declined by $94.5 million to $1,037.7 million as at December 31, 2023. During the quarter, Hudbay redeemed, in full, the remaining $59.7 million of outstanding Copper Mountain bonds and reduced the net balance drawn under the revolving credit facilities by $30 million. Based on continued free cash flow generation in the fourth quarter of 2023, the company continues to make progress on the deleveraging targets set out in the "3-P" plan for sanctioning Copper World. Current liquidity combined with cash flow from operations is expected to be sufficient to meet liquidity needs for the foreseeable future.

Summary of Full Year Results

Hudbay achieved its 2023 consolidated production guidance for all metals. On a business unit stand-alone basis, Peru exceeded the top end of the gold production guidance range, Manitoba exceeded the top end of the copper production guidance range and Copper Mountain exceeded the top end of the silver production guidance range for the portion of 2023 since acquisition. Consolidated copper, gold and silver production for the full year 2023 increased by 26%, 41% and 13%, respectively, compared to 2022 with the acquisition of Copper Mountain as well as higher throughput and recoveries in Peru and Manitoba and higher overall copper, gold and silver grades.

Consolidated cash cost per pound of copper produced, net of by-product creditsi, in 2023 was $0.80, compared to $0.86 in 2022, and achieved the low end of the 2023 annual cost guidance range. This decrease was mainly the result of higher copper production and higher by-product credits, partially offset by higher mining and milling costs from incorporating Copper Mountain. Consolidated sustaining cash cost per pound of copper produced, net of by-product creditsi, was $1.72 in 2023, compared to $2.07 in 2022, outperforming 2023 guidance expectations. This decrease was driven by the above reasons as well as the lower cash sustaining capital expenditures. Consolidated all-in sustaining cash cost per pound of copper produced, net of by-product creditsi, was $1.92 in 2023, lower than $2.26 in 2022, due to the same reasons outlined above partially offset by higher corporate selling and administrative expenses.

Cash generated from operating activities decreased to $476.9 million in 2023 from $487.8 million in 2022 primarily due to a $189.2 million decrease in non-cash working capital caused by timing and changes in provisionally priced receivables and an increase in inventory. Operating cash flow before change in non-cash working capital increased to $570.0 million from $391.7 million in 2022. The increase in operating cash flow before change in non-cash working capital was primarily the result of higher copper and gold sales volumes and higher gold prices, partially offset by lower zinc sales volumes, lower copper and zinc metal prices and higher treatment and refining charges. Zinc sales volumes were lower than the prior year due to the planned closure of the 777 mine in June 2022.

Net earnings and earnings per share for 2023 were $69.5 million and $0.22, respectively, compared to 2022 net earnings and earnings per share of $70.4 million and $0.27, respectively. Full year 2023 net earnings were impacted by $21.4 million in non-cash mark-to-market losses arising from the revaluation of the gold prepayment liability, investments and share-based compensation, partially offset by a non-cash gain of $11.4 million related to the revaluation of the Flin Flon environmental reclamation provision. The prior period results benefited from a non-cash $133.5 million revaluation gain for the Flin Flon environmental reclamation provision, partially offset by a $95.0 million pre-tax impairment loss related to the previous stand-alone development plan for the Rosemont deposit. Full year 2023 adjusted EBITDAi was $647.8 million, an increase of 36% compared to $475.9 million in 2022.

Consolidated Financial Condition ($000s) Dec. 31, 2023Sep. 30, 2023Dec. 31, 2022
Cash and cash equivalents 249,794245,217225,665
Total long-term debt 1,287,5361,377,4431,184,162
Net debt1 1,037,7421,132,226958,497
Working capital2 135,913128,46376,534
Total assets 5,312,6345,250,5964,325,943
Equity3 2,096,8112,044,6841,571,809
Net debt to adjusted EBITDA1,4 1.62.32.0

1 Net debt and net debit to adjusted EBITDA are non-IFRS financial performance measures with no standardized definition under IFRS. For further information, please see the "Non-IFRS Financial Performance Measures" section of this news release.
2 Working capital is determined as total current assets less total current liabilities as defined under IFRS and disclosed on the consolidated 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
  Dec. 31, 2023Sep. 30, 2023Dec. 31, 2022
Revenue$000s602,189480,456321,196
Cost of sales$000s405,433374,057251,520
Earnings (loss) before tax$000s80,98284,149(14,287)
Earnings (loss)$000s33,52845,490(17,441)
Basic and diluted earnings (loss) per share$/share0.100.13(0.07)
Adjusted earnings per share1$/share0.200.070.01
Operating cash flow before change in non-cash working capital$ millions246.5182.0109.1
Adjusted EBITDA1$ millions274.4190.7124.7
   Year Ended
   Dec. 31, 2023Dec. 31, 2022
Revenue$000s 1,690,0301,461,440
Cost of sales$000s 1,297,4691,184,552
Earnings before tax$000s 151,83095,815
Earnings$000s 69,54370,382
Basic and diluted earnings per share$/share 0.220.27
Adjusted earnings per share1$/share 0.230.10
Operating cash flow before change in non-cash working capital$ millions 570.0391.7
Adjusted EBITDA1$ millions 647.8475.9
1 Adjusted (loss) earnings per share and adjusted EBITDA are non-IFRS financial performance measures with no standardized definition under IFRS. For further information, please see the "Non-IFRS Financial Performance Measures" section.


Consolidated Production and Cost Performance5Three Months Ended
  Dec. 31, 2023Sep. 30, 2023Dec. 31, 2022
Contained metal in concentrate and doré produced1   
Coppertonnes45,45041,96429,305
Goldounces112,776101,41753,920
Silverounces1,197,0821,063,032795,015
Zinctonnes5,74710,2916,326
Molybdenumtonnes397466344
Payable metal sold    
Coppertonnes44,00639,37125,415
Gold2ounces104,84074,79947,256
Silver2ounces1,048,877748,955559,306
Zinc3tonnes7,3857,1258,230
Molybdenumtonnes468426421
Consolidated cash cost per pound of copper produced4   
Cash cost $/lb0.161.101.08
Sustaining cash cost $/lb1.091.892.21
All-in sustaining cash cost$/lb1.312.042.41
   Year Ended
   Dec. 31, 2023Dec. 31, 2022
Contained metal in concentrate and doré produced1   
Coppertonnes 131,691104,173
Goldounces 310,429219,700
Silverounces 3,575,2343,161,294
Zinctonnes 34,64255,381
Molybdenumtonnes 1,5661,377
Payable metal sold    
Coppertonnes 124,99694,473
Gold2ounces 276,893213,415
Silver2ounces 3,145,1662,978,485
Zinc3tonnes 28,77959,043
Molybdenumtonnes 1,4621,352
Consolidated cash cost per pound of copper produced4   
Cash cost $/lb 0.800.86
Sustaining cash cost $/lb 1.722.07
All-in sustaining cash cost$/lb 1.922.26
1 Includes production results from the Copper Mountain mine following the June 20, 2023 acquisition completion date. Production results from the Copper Mountain mine represents the period from June 20, 2023 acquisition completion date through to the end of the fourth quarter of 2023. Includes 100% of Copper Mountain mine production. Hudbay owns 75% of the Copper Mountain mine. As Copper Mountain was acquired on June 20, 2023, there were no comparative 2022 figures.
2 Includes total payable gold and silver in concentrate and in doré sold. 
3 Metal reported in concentrate is prior to deductions associated with smelter contract terms. 
4 For the three months ended December 31, 2023 and September 30, 2023, this metric includes payable zinc in concentrate sold. For the three months ended December 31, 2022, this metric also included refined zinc metal and payable zinc in concentrate sold. For the year ended December 31, 2023, this metric includes payable zinc in concentrate sold. For the year ended December 31, 2022, this metric also included payable refined zinc metal sold.
5 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.
 

Peru Operations Review

Peru OperationsThree Months EndedYear Ended
  Dec. 31, 2023Sep. 30, 2023Dec. 31, 2022Dec. 31, 2023Dec. 31, 2022
Constancia ore mined1 tonnes973,1761,242,1985,614,9189,265,95425,840,435
Copper %0.300.300.400.320.35
Goldg/tonne0.040.040.040.040.04
Silverg/tonne2.262.913.482.533.40
Molybdenum%0.010.010.010.010.01
Pampacancha ore minedtonnes5,556,6135,894,0133,771,62914,756,4168,319,250
Copper%0.560.530.370.510.33
Goldg/tonne0.320.300.290.330.29
Silverg/tonne4.844.223.844.284.06
Molybdenum%0.010.020.010.010.01
Total ore minedtonnes6,529,7897,136,2119,386,54724,022,37034,159,685
Strip ratio2 1.261.360.971.511.13
Ore milledtonnes7,939,0447,895,1097,795,73530,720,92930,522,294
Copper %0.480.430.410.390.34
Goldg/tonne0.250.210.120.160.09
Silverg/tonne4.203.753.933.623.58
Molybdenum%0.010.020.010.010.01
Copper recovery%87.485.285.184.285.0
Gold recovery%77.674.869.671.863.6
Silver recovery%78.073.266.570.065.7
Molybdenum recovery%33.637.237.735.834.8
Contained metal in concentrate     
Coppertonnes33,20729,08127,047100,48789,395
Goldounces49,41840,59620,860114,21858,229
Silverounces836,208697,211655,2572,505,2292,309,352
Molybdenumtonnes3974663441,5661,377
Payable metal sold     
Coppertonnes31,20027,49023,78996,21379,805
Goldounces38,11432,75715,11697,17649,968
Silverounces703,679460,001411,1292,227,4192,045,678
Molybdenumtonnes4684264211,4621,352
Combined unit operating cost3,4,5$/tonne12.2412.2013.6412.4712.78
Cash cost5$/lb0.540.831.341.071.58
Sustaining cash cost5$/lb1.211.512.091.812.35
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 general and administrative ("G&A") costs per tonne of ore milled. Reflects the deduction of expected capitalized stripping costs.
4 Excludes approximately $0.7 million, or $0.09 per tonne, of COVID-related costs during the three months ended December 31, 2022 and $5.2 million or $0.17 per tonne, during the twelve months ended December 31, 2022.
5 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.
    

During the fourth quarter of 2023, the Peru operations produced 33,207 tonnes of copper, 49,418 ounces of gold, 836,208 ounces of silver and 397 tonnes of molybdenum. Fourth quarter 2023 production of copper, gold and silver increased 14%, 22% and 20%, respectively, over the third quarter with continued higher copper and precious metal grades, higher recoveries and higher throughput. Peru's full year 2023 production of copper, gold, silver and molybdenum was 12%, 96%, 8% and 14% higher, respectively, than 2022 for the same reasons outlined above. Copper production was in line with the company's annual guidance range, whereas silver and molybdenum production were near the upper end and gold production exceeded the top end of the annual guidance range by 6%.

Total ore mined in the fourth quarter of 2023 decreased by 9% compared to the third quarter due to continued phase five stripping activities at Constancia and a significant increase in Pampacancha mining activity which entails a higher amount of stripping. The decrease in total mined ore was in line with the mine plan, with ore stockpiles supplementing mill feed during the quarter. Ore mined from Pampacancha during the fourth quarter was 5.6 million tonnes, at average grades of 0.56% copper and 0.32 grams per tonne gold.

Ore milled during the fourth quarter of 2023 was consistent with the prior quarter. Milled copper and gold grades increased by 12% and 19%, respectively, in the fourth quarter compared to the third quarter due to continued contribution of higher grade copper and gold ore from Pampacancha. 

Recoveries of copper, gold and silver during the fourth quarter of 2023 were 87.4%, 77.6% and 78.0%, respectively, with recoveries of all metals improving quarter over quarter, in line with metallurgical models. The Constancia mill achieved record copper recoveries as a result of the successful completion of the recovery improvement program in the second quarter of 2023, as planned, ahead of the start of the period of significantly higher grades from the Pampacancha pit. The program scope was to increase copper recoveries by 2% by increasing the rougher mass, and the mill continues to achieve the targeted higher copper recoveries. Copper recoveries in the fourth quarter also benefited from higher overall head grades and lower contaminants.

Ore mined during 2023 was 30% lower than 2022 due to the same factors as the quarterly variance as well as increased stockpile processing early in 2023 to ration fuel during the protests and civil unrest experienced in Peru. Copper recoveries in 2023 were 1% lower than 2022 due to higher levels of contaminants in processed stockpile ore during the first half of 2023. Gold and silver recoveries in 2023 were 13% and 7% higher, respectively, than 2022 due to increased processing of higher grade Pampacancha ore. 

Combined mine, mill and G&A unit operating costsi in the fourth quarter were slightly higher than the third quarter primarily due to the costs associated with the scheduled semi-annual plant maintenance shutdown. Combined mine, mill and G&A unit operating costsi for the full year 2023 were 2% lower than 2022 primarily due to lower mining costs as a result of lower ore mined and higher capitalized stripping.

Peru's cash cost per pound of copper produced, net of by-product creditsi, in the fourth quarter of 2023 was $0.54, a decrease of 35% compared to the third quarter due to higher by-product credits mainly from gold, higher capitalized stripping and higher copper production. This was partially offset by higher profit-sharing expenses and higher treatment, refining and freight costs. Cash cost per pound of copper produced, net of by-product creditsi, in 2023 was $1.07, a 32% reduction from 2022, and achieved the lower end of the cost guidance range due to the same factors noted above.

Sustaining cash cost per pound of copper produced, net of by-product creditsi, for the fourth quarter and for the year ended 2023 were 20% and 23% lower, respectively, than the third quarter and the prior year primarily due to the same factors affecting cash cost noted above and lower sustaining capital expenditures. Total annual sustaining capital expenditures in Peru were $27.9 million lower than the original guidance, exceeding the $10 million previously reduced target, primarily a result of lower capitalized stripping costs.

Manitoba Operations Review

Manitoba Operations Three Months EndedYear Ended
  Dec. 31, 2023Sep. 30, 2023Dec. 31, 2022Dec. 31, 2023Dec. 31, 2022
Lalor       
Ore minedtonnes372,384367,491369,4531,526,7291,516,203
Goldg/tonne5.925.084.004.744.00
Copper%1.041.020.730.860.73
Zinc%2.203.312.173.003.14
Silverg/tonne28.9227.8019.3724.5121.96
New Britannia      
Ore milledtonnes165,038146,927141,142596,912542,269
Goldg/tonne8.036.936.116.766.28
Copper%1.461.220.911.030.81
Zinc%0.850.900.670.840.80
Silverg/tonne27.9723.8822.0925.1120.97
Gold recovery - concentrate%58.164.756.660.060.3
Copper recovery - concentrate%91.697.489.393.390.7
Silver recovery - concentrate%61.063.255.460.760.6
Stall Concentrator     
Ore milledtonnes228,799255,516204,350965,567968,638
Goldg/tonne4.223.702.503.452.86
Copper%0.730.770.610.740.71
Zinc%3.204.883.434.364.70
Silverg/tonne28.6328.8219.2424.1922.81
Gold recovery%67.567.862.464.858.0
Copper recovery%92.093.989.090.487.2
Zinc recovery%78.582.690.182.286.6
Silver recovery%61.864.956.661.456.8
Total contained metal in concentrate and doré1  
Goldounces59,86356,21333,060187,363161,471
Coppertonnes3,7353,5802,25812,15414,778
Zinctonnes5,74710,2916,32634,64255,381
Silverounces255,579264,752139,758851,723851,942
Total payable metal sold     
Gold2ounces63,63536,71332,140171,297163,447
Coppertonnes3,6872,9251,62610,70814,668
Zinc3tonnes7,3857,1259,23028,77959,043
Silver2ounces246,757197,952148,177728,304932,807
Combined unit operating cost4,5C$/tonne216217241217195
Gold cash cost5$/oz434670922727297
Gold sustaining cash cost5$/oz7889391,7951,0771,091

1 Doré includes sludge, slag and carbon fines in three months ended December 31, 2023 and September 30, 2023.
2 Includes total payable precious metals in concentrate and doré sold.
3 Includes refined zinc metal and payable zinc in concentrate sold.
4 Reflects combined mine, mill and G&A costs per tonne of ore milled.
5 Combined unit operating cost, 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.

The Manitoba operations produced a record 59,863 ounces of gold during the fourth quarter of 2023, along with 3,735 tonnes of copper, 5,747 tonnes of zinc and 255,579 ounces of silver. Production of gold and copper increased by 6% and 4%, respectively, in the fourth quarter compared to the third quarter, while production of silver and zinc decreased by 3% and 44%, respectively. This was due to mining of higher grade gold zones with a focus on higher quality ore production and higher recoveries at the New Britannia and Stall mills. Despite significantly higher metal production in the fourth quarter, 2023 production of copper and zinc was lower by 18% and 37%, respectively, than in 2022, mainly due to the loss of production from the closure of the 777 mine in June 2022 and lower comparative zinc grades. Production of gold in 2023 was 16% higher than in 2022 while silver production was unchanged year-over-year. The production of all metals achieved 2023 production guidance, while copper exceeded the top end of 2023 annual guidance range.

In Manitoba, the company continues to focus on improvement initiatives aimed at supporting higher production levels, minimizing dilution and enhancing metal recoveries at the Snow Lake operations. A significant focus continues to be placed on improving the quality of ore production at Lalor mine, employing techniques such as stope redesigns, grade control practices prior to blasting, assaying blasthole cuttings and implementing mine design adjustments to mitigate dilution. These proactive measures have successfully reduced the inclusion of waste rock in the mining cycle and increased gold, copper, and silver grades during the fourth quarter.

Optimization of development drift size has led to a 15% reduction in waste volume and an 18% decrease in unit development costs in 2023 compared to 2022. Higher shaft availability has led to efficient ore hoisting and has eliminated the need for trucking ore to surface, resulting in a 5% increase in tonnes hoisted in 2023 compared to 2022. Despite encountering some production challenges in deeper mining areas due to longer haul distances, smaller stope dimensions, and lower ore bulk density, the team is actively pursuing initiatives to continue to bolster efficiency and further enhance mucking productivity.

Additionally, the company advanced optimization initiatives at New Britannia mill to achieve higher throughput rates by prioritizing process improvements and seamlessly integrating additional gold ore feed from the Lalor mine. This reallocation of ore has led to reduced feed to Stall mill, prompting a careful evaluation of lower tonnage set points to optimize plant operations. The team has also started exploring opportunities to share maintenance services with New Britannia during shutdown periods which, if successful, would reduce overall contractor requirements.

At Lalor, Hudbay achieved higher development advance rates during the fourth quarter compared to prior quarters of 2023. A comprehensive review of the long-range mine plan for zone 40 has led to significantly reduced future capital development needs by transitioning to a more selective mining method, thereby enhancing the reserve grade for this mining front. Lalor ore mined during the fourth quarter increased by 1% compared to the third quarter. Notably, gold grades were 5.92 grams per tonne in the quarter, a 17% increase from the third quarter.

Total ore mined at the Manitoba operations in 2023 was 24% lower than in 2022 mainly due to the planned closure of the 777 mine in June 2022. However, total ore mined at Lalor in 2023 was 1% higher than in 2022. Gold, copper and silver grades mined at Lalor during 2023 were 19%, 18% and 12% higher than in 2022, reflecting the successful execution of the strategic mine plan. Zinc grades mined at Lalor for the full year 2023 were 4% lower compared to the same period in 2022, consistent with the mine plan.

The Stall mill processed slightly less ore in the fourth quarter of 2023 compared to the third quarter, due to more ore being sent to New Britannia as the mill exceeded design throughput. After the commissioning of the Stall mill recovery improvement project in the second quarter of 2023, the operations continue to focus on optimizing circuits to achieve targeted recoveries by reducing primary grind size, refining the flotation circuit balance and mass pull and reagent selection. These adjustments have proven highly effective, resulting in notably higher recoveries for copper above 90% in the second half of 2023. In addition, the Stall mill achieved its targeted gold recovery levels of 67.5% in the fourth quarter, bringing the 2023 annual recovery to 64.8%, compared to 58.0% in 2022.

Process improvement initiatives at New Britannia have been successfully implemented with minimal capital outlays, enabling the company to reach progressively higher production targets during the fourth quarter. The New Britannia mill averaged approximately 1,800 tonnes per day in the fourth quarter, approximately 12% above average levels in the third quarter of 2023.

Combined mine, mill and G&A unit operating costsi in the fourth quarter of 2023 slightly decreased compared to the third quarter reflecting lower overall costs partially offset by lower total ore milled. Combined mine, mill and G&A unit operating costs for the full year 2023 were C$217 per tonne reflecting the standalone cost structure of the Snow Lake operations in 2023 after the closure of the Flin Flon operations in June 2022.

Manitoba's cash cost per ounce of gold produced, net of by-product creditsi, has trended lower throughout 2023, averaging $434 in the fourth quarter. Cash costs were significantly lower in the fourth quarter, with higher by-product credits and higher gold production, in accordance with the mine plan. Full year 2023 cash cost per ounce of gold produced, net of by-product creditsi, was $727, which was higher than 2022 costs primarily due to significantly lower by-product credits partially offset by lower overall costs due to the closure of the 777 mine in June 2022 and higher gold production. Full year 2023 cash cost per ounce of gold produced, net of by-product creditsi, was within annual guidance range.

Sustaining cash cost per ounce of gold produced, net of by-product creditsi, for the fourth quarter of 2023 was $788, a decrease of 16% compared to the third quarter due to the same factors affecting cash cost combined with lower sustaining capital expenditures. Total annual sustaining capital expenditures in Manitoba are $19 million lower than the original 2023 guidance levels of $75 million primarily a result of lower capital development costs realized at Lalor as the team focuses on cost efficiencies. Sustaining cash cost per ounce of gold produced, net of by-product creditsi, in 2023 was $1,077, a decrease of 1% from 2022, primarily due to the same factors affecting fourth quarter sustaining cash cost noted above.

British Columbia Operations Review

British Columbia Operations5Three Months EndedYear Ended5
  Dec. 31, 2023Sep. 30, 2023Dec. 31, 2023
Ore mined1tonnes2,627,3983,792,5686,975,389
Waste minedtonnes14,032,09311,233,91726,634,805
Strip ratio2 5.342.963.82
Ore milledtonnes3,261,8913,158,0066,862,152
Copper%0.330.360.35
Goldg/tonne0.060.080.07
Silverg/tonne1.361.401.36
Copper recovery%78.880.979.69
Gold recovery%54.156.155.88
Silver recovery%73.871.372.96
Total contained metal in concentrate  
Coppertonnes8,5089,30319,050
Goldounces3,4954,6088,848
Silverounces105,295101,069218,282
Total payable metal sold   
Coppertonnes9,1198,95618,075
Goldounces3,0915,3298,420
Silverounces98,44191,002189,443
Combined unit operating cost3,4C$/tonne20.9024.8821.38
Cash cost4$/lb2.672.672.50
Sustaining cash cost4$/lb3.933.393.41
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 Includes 100% of Copper Mountain mine production, Hudbay owns 75% of Copper Mountain mine. As Copper Mountain was acquired on June 20, 2023, there were no comparative 2022 figures. Year ended December 31, 2023 results from the date of acquisition, June 20, 2023, through to the end of the fourth quarter of 2023.
 

During the fourth quarter of 2023, the British Columbia operations produced 9,119 tonnes of copper, 3,091 ounces of gold and 98,441 ounces of silver. Hudbay achieved the post-acquisition 2023 production guidance for copper and gold and exceeded the post-acquisition guidance for silver. 

Total ore mined at Copper Mountain in the fourth quarter of 2023 was 2.6 million tonnes, less than initially planned but production was supplemented with stockpile rehandle of 1.5 million tonnes. The mine operations team has initiated a fleet production ramp up plan to capture the full value of idle capital equipment at the Copper Mountain site. This plan entailed remobilization of the mining fleet from 14 trucks to 28 trucks by the end of 2023, allowing for increased waste removal during the fourth quarter. The company continues to focus on hiring additional haul truck drivers, and a fully trained complement of truck drivers are expected to be in place in the first half of 2024. The utilization of the full truck fleet enabled additional 2023 pre-stripping to access higher head grades.

Benefitting from stabilization initiatives within the comminution circuit, the mill processed 3.3 million tonnes of ore during the fourth quarter reflecting average mill availability of 86.7%, a 3% increase versus the third quarter of 2023. The initiatives included, but were not limited to, changes in screen sizes, a reduction in grinding media loading rates and a change in semi-autogenous grinding (SAG) mill operational strategy. The SAG mill throughput in the fourth quarter has been impacted by lower freshwater availability for processing, higher coarse feed from stockpiled ore and reduced reliability of the crushing circuit, driven principally by significant interruptions caused by the removal of scrap metal from the material handling system as the mining progresses through areas of historical underground workings.

Maintenance practices to improve mill availability continue to be a key pillar of the company's stabilization initiatives. These include the implementation of improved maintenance management processes planned for the first half of 2024 and a change in the maintenance organizational structure which was completed in the fourth quarter of 2023. Beyond maintenance practices, material handling and transportation in the comminution circuit, particularly in the winter months, have a significant impact on mill performance. Work has begun to analyze the trade-off among the various alternatives to further enhance mill performance.

Milled copper grades during the fourth quarter of 2023 averaged 0.33%, an 8% reduction from the third quarter, but were significantly higher than the reserve grade of 0.25%. Copper recoveries of 78.8% were lower than the third quarter of 2023 due to volumetric restriction in the regrind circuit limiting the rougher circuit performance. Following a period of investigation, changes to the flotation operational strategy that mirror the company's successful processes at Constancia were implemented, including reagent selection and dose modification, reactivation and reprogramming of expert controls and circuit configuration changes. The benefits of these operational strategy improvements are expected to start to be realized in the second half of 2024.

Combined mine, mill and G&A unit operating costsi in the fourth quarter of 2023 were C$20.90 per tonne milled, 3% below the third quarter. Combined unit operating costs are expected to decrease over time as the company continues to implement stabilization and optimization initiatives at Copper Mountain.

British Columbia's cash cost and sustaining cash cost per pound of copper produced, net of by-product creditsi, in the fourth quarter of 2023 were $2.67 and $3.93, respectively. Cash costs were within the post-acquisition guidance range.

Advancing Copper Mountain Mine Stabilization Plans

Since completing the acquisition of Copper Mountain on June 20, 2023, Hudbay has been focused on advancing stabilization plans, including opening up the mine by adding additional mining faces and re-mobilizing idle haul trucks, optimizing the ore feed to the plant and implementing plant improvement initiatives.

On December 5, 2023, the company released its first NI 43-101 technical report in respect of the 75%-owned Copper Mountain mine. As detailed in the technical report, the mine plan contemplates average annual copper production of 46,500 tonnes in the first five years, 45,000 tonnes in the first ten years and 37,000 tonnes over the 21-year mine life. Average cash costs and sustaining cash costs per pound of copper produced, net of by-product creditsi, over the mine life are expected to be $1.84 and $2.53, respectively. The updated mine plan represents an approximate 90% increase in average annual copper production and an approximate 50% decrease in cash costs over the first 10 years compared to 2022.

Hudbay's stabilization plans are focused on improving reliability and driving sustainable long-term value:

The mine plan is based on a revised resource model and was constructed using consistent methods applied at the Constancia, Copper World and Mason deposits. The mineral reserve estimates total 367 million tonnes at a copper grade of 0.25% and a gold grade of 0.12 grams per tonne, supporting a 21-year mine life. An additional 140 million tonnes of measured and indicated resources at 0.21% copper and 0.10 grams per tonne gold and 370 million tonnes of inferred resources at 0.25% copper and 0.13 grams per tonne gold, exclusive of mineral reserves, provide significant upside potential for reserve conversion and extending mine life. Infill drilling is planned for 2024 to target reserve conversion.

There are several opportunities to further increase production, improve costs and extend mine life for Copper Mountain. While these opportunities have not been considered in the technical report as they are not yet at the level of required engineering, the company is advancing studies to evaluate the potential for these to be reflected in future mine plans.

Please see "Qualified Person and NI 43-101" for further details regarding the technical and scientific information included in the technical report.

Delivered Brownfield Capital Projects On Time and On Budget

The Constancia mill achieved record copper recoveries of 87.4% in the fourth quarter primarily as a result of the successful completion of the recovery improvement program in the second quarter of 2023, as planned, ahead of the start of significantly higher grades being mined from the Pampacancha pit in the second half of 2023. The program scope was to increase copper recoveries by 2% by increasing the rougher mass, and the mill continues to achieve the targeted higher copper recoveries.

After the commissioning of the Stall mill recovery improvement project in the second quarter of 2023, subsequent optimization activities proved highly effective, resulting in notably higher recoveries for copper above 90% and gold above 65% in the second half of 2023. Specifically, the Stall mill achieved its targeted gold recovery levels of 67.5% in the third and fourth quarters, compared to 60% in the second quarter.

The total growth capital expenditures in 2023 associated with the completion of these recovery improvement projects were in line with the company's guidance of $25 million.

The New Britannia mill has consistently achieved higher throughput levels, averaging 1,650 tonnes per day in 2023 and approximately 1,800 tonnes per day in the fourth quarter, significantly exceeding its original design capacity of 1,500 tonnes per day. The company has successfully implemented process improvement initiatives that required minimal capital outlays in pursuit of higher output that aligns with increased gold production from the Lalor mine.

Generating Free Cash Flow with Increased Production and Continued Financial Discipline

Hudbay delivered a second successive quarter of positive free cash flow during the fourth quarter of 2023 as it executed the plan for higher copper and gold production from Pampacancha and higher gold production at Lalor, both driven by higher grades. The company continues to expect to see strong production levels throughout 2024 from sustained higher grades in Peru and Manitoba, along with additional production from the recently acquired Copper Mountain mine.

During the fourth quarter, Hudbay completed $30 million in net repayments on its revolving credit facilities and redeemed, in full, the remaining $59.7 million of Copper Mountain's bonds from treasury. The company also recommenced deliveries under the gold forward sale and prepay agreement in October 2023, further reducing the outstanding gold prepayment liability, and the company is on schedule to fully repay the gold prepay facility by August 2024. Despite these debt repayments, the company increased cash and cash equivalents to $249.8 million and reduced overall net debt to $1,037.7 million as at December 31, 2023, compared to $245.2 million and $1,132.2 million, respectively, as at September 30, 2023. The $94.5 million decline in net debt, together with higher levels of adjusted EBITDA1 in the fourth quarter, have improved the net debt to adjusted EBITDA ratioi to 1.6x compared to 2.0x at the end of 2022. Subsequent to quarter-end, the company continued its deleveraging efforts with an additional $10 million repayment on its revolving credit facilities.

During the fourth quarter, Hudbay continued to take steps to ensure free cash flow generation and continued financial discipline into 2024 and 2025. To this end, the company entered into forward sales contracts at Copper Mountain for a total of 3,600 tonnes of 2024 copper production over the twelve-month period from May 2024 to April 2025 at an average price of $3.93 per pound as well as a zero-cost collars for 6,000 tonnes of copper production over the twelve-month period from May 2024 to April 2025 at an average floor price of $3.83 per pound and an average cap price of $4.03 per pound. As at December 31, 2023, 7.9 million pounds of copper forwards and 13.2 million pounds of copper collars were outstanding.

Hudbay successfully delivered on its annual discretionary spending reduction targets for 2023. As a result of continued financial discipline and capital cost efficiencies achieved, total capital expenditures of approximately $243 million for Peru, Manitoba and Arizona in 2023 were approximately $57 million lower than the original guidance levels, a further decrease from the $30 million reduction announced in the third quarter, representing a 19% reduction from the original 2023 total capital expenditure guidance of $300 million.

Senior Management Team Appointments

In November 2023, Hudbay promoted Luis Santivañez to Vice President, South America. Mr. Santivañez joined Hudbay in Peru in 2018 and was promoted to General Manager of the South America operations in 2022. Mr. Santivañez has over 20 years of experience at global mining companies working across Peru, Central America and Australia. Under his leadership, the Constancia operations have delivered a successful ramp up at Pampacancha, navigated through a period of politically driven social unrest in Peru and further enhanced the company's partnerships with the local communities.

In January 2024, Hudbay appointed John Ritter as Vice President, British Columbia Business Unit. Mr. Ritter brings a diverse background with over 30 years of experience in technical, operational and senior leadership roles at global mining companies. He was most recently the General Manager of the New Afton mine in B.C and has strong ties with the local community near the Copper Mountain mine. His focus on operational excellence and value-creating improvements will be instrumental as he leads the stabilization and optimization plans at the Copper Mountain mine.

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 to reflect a larger private land project footprint. This approval was challenged in state court, but the challenge was dismissed in May 2023 as having no basis. 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 company expects to receive these two outstanding state permits in 2024.

Hudbay intends to initiate a minority joint venture process prior to commencing a definitive feasibility study, which will allow the joint venture partner to participate in the final Copper World project design and the funding of definitive feasibility study activities. The opportunity to sanction Copper World is not expected until late 2025 based on current estimated timelines. The decision to sanction Copper World will ultimately be evaluated against other competing investment opportunities as part of Hudbay's capital allocation process.

Hudbay released results of the de-risked and enhanced Copper World pre-feasibility study for Phase I in September 2023, which demonstrated a simplified mine plan with an extended 20-year mine life requiring only state and local permits, an after-tax net present value (8%) of $1.1 billion and a 19% internal rate of return at a copper price of $3.75 per pound. Average annual copper production over the first ten years is expected to be approximately 92,000 tonnes at cash costs and sustaining cash costs per pound of copperi of $1.53 and $1.95, respectively. 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.

Snow Lake Exploration

Hudbay continues to compile results from ongoing infill drilling at Lalor, which will be incorporated into the next annual mineral reserve and resource estimate update expected to be announced in March 2024.

The planned 2024 exploration program is Hudbay's largest Snow Lake program in the company's history and it is currently underway with plans to continue testing the deep extensions of the gold and copper zones at Lalor and complete follow up drilling at the Lalor Northwest target. The 2024 program will also explore the newly acquired Cook Lake claims and the former Rockcliff claims located within trucking distance of the existing Snow Lake processing infrastructure. As previously disclosed, both the Cook Lake and former Rockcliff claims were acquired by the company as part of transactions completed in 2023. A majority of the Cook Lake and former Rockcliff claims have been untested by modern deep geophysics, which was the discovery method for the Lalor deposit. Hudbay's 2024 exploration program includes a large geophysics program consisting of surface electromagnetic surveys using cutting-edge techniques that enable the team to detect targets at depths of almost 1,000 metres below surface. The company is exploring its newly expanded land package in hopes of finding a new anchor deposit to maximize and extend the life of the Snow Lake operations beyond 2038.

The company also expects to advance a development and exploration drift at the 1901 deposit located within 1,000 metres of the haulage ramp to Lalor. The program is expected to take place over 2024 and 2025 with the development of an access drift, drill platforms and diamond drilling to further confirm the optimal mining method to extract the base metal and gold lenses and to convert the inferred mineral resources in the gold lenses to mineral reserves.

Advancing Metallurgical Test Work for the Flin Flon Tailings Reprocessing Opportunity

Hudbay identified the opportunity to reprocess Flin Flon tailings, with initial confirmatory drilling completed in 2022 indicating higher zinc, copper and silver grades than predicted from historical mill records while confirming the historical gold grade. In 2023, Hudbay advanced metallurgical test work and evaluated metallurgical technologies, including the signing of a test work co-operation agreement with Cobalt Blue Holdings ("COB") examining the use of COB technology to treat Flin Flon tailings. Initial results from preliminary roasting test work were encouraging in converting more than 90% of pyrite into pyrrhotite and elemental sulphur. Final test work results will support the development of an overall flowsheet. Hudbay expects to continue these metallurgical activities throughout 2024 as it assesses the economic viability of the various metallurgical technologies.

Peru Exploration Update

The company continues to execute a limited drill program and technical evaluations at the Constancia deposit to confirm the economic viability of adding an additional mining phase to the current mine plan that would convert a portion of the mineral resources to mineral reserves. The results from this drill program and technical and economic evaluations are expected to be incorporated in the annual mineral reserve and resource estimate update in March 2024.

Hudbay controls a large, contiguous block of mineral rights with the potential to host satellite mineral deposits in close proximity to the Constancia processing facility, including the past producing Caballito property and the highly prospective Maria Reyna property. The company commenced early exploration activities at Maria Reyna and Caballito after completing a surface rights exploration agreement with the community of Uchucarcco in August 2022. A drill permit application was submitted for the Maria Reyna property in November 2023, and a similar application for the Caballito property is planned for the first half of 2024. In parallel, Hudbay continues to advance community engagement activities. Surface mapping and geochemical sampling confirm that both Caballito and Maria Reyna host sulfide and oxide rich copper mineralization in skarns, hydrothermal breccias and large porphyry intrusive bodies.

Progressing Towards Climate Change Commitments

In December 2022, Hudbay announced its commitment to achieve net zero greenhouse gas ("GHG") emissions by 2050 and the adoption of interim 2030 GHG reduction targets to support this commitment. While the company's operations are well-positioned in the lower half of the global GHG emissions curve for copper operations, Hudbay recognizes its role in mitigating climate change and that copper and the metals Hudbay produces play an important role in the world's transition to a greener future. Hudbay's GHG emissions reduction plan includes pursuing a 50% reduction in absolute Scope 1 and Scope 2 emissions from existing operations by 2030 and achieving net zero total emissions by 2050.

In 2023, the company made significant progress towards its climate change goals, including:

2024 Key Objectives and Annual Guidance

Hudbay's key objectives for 2024 are to:

Hudbay's annual production and operating cost guidance, along with its annual capital and exploration expenditure forecasts are discussed in detail below.
Production Guidance

Contained Metal in Concentrate and Doré12024 GuidanceYear Ended
Dec. 31, 2023
2023 Guidance
Peru    
Coppertonnes98,000 - 120,000100,48791,000 - 116,000
Goldounces76,000 - 93,000114,21883,000 - 108,000
Silverounces2,500,000 - 3,000,0002,505,2292,210,000 - 2,650,000
Molybdenumtonnes1,250 - 1,5001,5661,300 - 1,600
     
Manitoba    
Goldounces170,000 - 200,000187,363175,000 - 205,000
Zinctonnes27,000 - 35,00034,64228,000 - 36,000
Coppertonnes9,000 - 12,00012,1549,000 - 12,000
Silverounces750,000 - 1,000,000851,723750,000 - 1,000,000
     
British Columbia    
Coppertonnes30,000 - 44,00019,05018,500 - 20,500
Goldounces17,000 - 26,0008,8488,000 - 10,000
Silverounces300,000 - 455,000218,282190,000 - 210,000
     
Total    
Coppertonnes137,000 - 176,000131,691118,500 - 148,500
Goldounces263,000 - 319,000310,429266,000 - 323,000
Zinctonnes27,000 - 35,00034,64228,000 - 36,000
Silverounces3,550,000 - 4,455,0003,575,2343,150,000 - 3,860,000
Molybdenumtonnes1,250 - 1,5001,5661,300 - 1,600
1 Metal reported in concentrate and doré is prior to refining losses or deductions associated with smelter terms.
 

On a consolidated basis, Hudbay successfully achieved 2023 production guidance for all metals. On a business unit stand-alone basis, Peru exceeded the top end of the gold production guidance range, Manitoba exceeded the top end of the copper production guidance range, while British Columbia exceeded the top end of the silver production guidance range for the portion of 2023 since the acquisition of the Copper Mountain mine.

In 2024, consolidated copper production is forecast to increase to 156,500 tonnesii, an increase of approximately 19% compared to 2023 actual production levels. This growth is a result of continued higher grade ore from Pampacancha in Peru and continued higher recoveries in both Peru and Manitoba, as well as the contribution from a full year of production at the Copper Mountain mine. Consolidated gold production in 2024 is expected to slightly decline to 291,000 ouncesii, due to a smoothing of Pampacancha high grade gold zones over the 2023 to 2025 period, as described further below.

2024 copper production in Peru is expected to increase by 8% from 2023 levels to 109,000 tonnesii. Mill ore feed throughout 2024 is expected to revert back to the typical one-third from Pampacancha and two-thirds from Constancia, unlike 2023 when a majority of the ore feed was from Pampacancha in the second half of the year. Gold production is expected to be 84,500 ouncesii, lower than 2023 levels due a smoothing of Pampacancha high grade gold zones over the 2023 to 2025 period as additional high grade areas were mined in 2023 ahead of schedule, resulting in gold production exceeding 2023 guidance levels, and other high grade areas were deferred to 2025. Total gold production in Peru over the 2023 to 2025 period is expected to be higher than previous guidance levelsii. The Pampacancha deposit is now expected to be depleted in the third quarter of 2025, as opposed to mid-2025 previously. Peru's 2024 production guidance reflects periods of higher stripping activities in the Pampacancha pit in the second and third quarters, as well as regularly scheduled semi-annual mill maintenance shutdowns at Constancia during the second and fourth quarters of 2024.

In Manitoba, 2024 gold production is anticipated to be 185,000 ouncesii, consistent with 2023 production as the company expects the high gold grades and recoveries to continue into 2024. The production guidance anticipates Lalor operating at 4,500 tonnes per day and an increase in New Britannia mill throughput to 1,800 tonnes per day given the mill has been consistently operating above its 1,500 tonnes per day nameplate capacity. Zinc production for 2024 is expected to be 31,000 tonnesii, a 10% year-over-year decline as certain high grade zinc areas were shifted to 2023 and the Lalor mine continues to prioritize higher gold and copper grade zones in 2024. Manitoba's production guidance reflects a scheduled maintenance period at the Lalor mine during the third quarter of 2024.

In British Columbia, 2024 copper production is expected to be 37,000 tonnesii, in line with the technical report for Copper Mountain issued in December 2023. 

Hudbay will release its updated three-year production outlook together with its annual mineral reserve and resource update in March 2024.

Cash Cost Guidance

Copper remains the primary revenue contributor on a consolidated basis, and therefore, consolidated cost guidance has been presented as cash cost per pound of copper produced. The company has also provided cash cost guidance for each of its operations based on their respective primary metal contributors.

Cash cost1 2024 GuidanceYear Ended
Dec. 31, 2023
2023 Guidance
Peru cash cost per pound of copper2$/lb1.25 - 1.60 1.071.05 - 1.30
Manitoba cash cost per ounce of gold3$/oz 700 - 900727500 - 800
British Columbia cash cost per pound of copper2$/lb2.00 - 2.502.502.40 - 2.85
     
Consolidated cash cost per pound of copper$/lb1.05 - 1.250.800.80 - 1.10
Consolidated sustaining cash cost per pound of copper$/lb2.00 - 2.451.721.80 - 2.25

1 Cash cost and sustaining cash cost per pound of copper produced, net of by-product credits, and 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.
2 Peru and British Columbia cash cost per pound of copper contained in concentrate assumes by-product credits are calculated using the gold and silver deferred revenue drawdown rates in effect on December 31, 2023 for the streamed ounces in Peru and the following commodity prices: $1,900 per ounce gold, $23.00 per ounce silver, $18.00 per pound molybdenum, $1.15 per pound zinc and an exchange rate of 1.35 C$/US$.
3 Manitoba cash cost per ounce of gold produced, net of by-product credits, contained in concentrate and doré assumes by-product credits are calculated using the following commodity prices: $1.15 per pound zinc, $23.00 per ounce silver, $3.75 per pound copper and an exchange rate of 1.35 C$/US$.

Copper cash cost in Peru is expected to increase to $1.25 to $1.60 per pound in 2024 versus 2023 primarily due to lower by-product credits and higher mining costs associated with lower capitalized stripping, partially offset by higher copper production.

Gold cash cost in Manitoba is expected to increase by 10%ii in 2024 compared to 2023 as a result of lower zinc and copper by-product credits and higher mining costs associated with less capitalized development costs.

Copper cash cost in British Columbia is expected to decrease by 10%ii in 2024 compared to 2023 and is expected to be significantly lower than the $2.69 per pound cash cost contemplated in the December 2023 technical report due to a reclassification of a portion of mining costs from operating expenses to capitalized costs. This is a result of a change from contractor mining to owner-operating mining as a more cost-effective approach for the additional required stripping, and the elimination of mining low-grade ore to stockpile in 2024 which increases the strip ratio and allocation of mining costs to capitalized stripping. In addition, the 2024 costs reflect a decrease in the discretionary tonnes moved with total material moved in 2024 now expected to be 97 million tonnes compared to 104 million tonnes in the technical report.

Consolidated copper cash cost and consolidated sustaining cash cost in 2024 are both expected to be higher than 2023 results due to lower by-product credits and a full year of contributions from British Columbia.

Capital Expenditure Guidance

Capital Expenditures
(in $ millions)
2024 Guidance4Year Ended
Dec. 31, 2023
2023 Revised Guidance52023 Original Guidance
Sustaining capital1    
Peru2130.0132.1150.0160.0
Manitoba55.055.860.075.0
British Columbia ? sustaining capital35.030.2233.02-
British Columbia ? capitalized stripping270.0
Total sustaining capital290.0218.1243.0235.0
Growth capital    
Peru2.012.110.010.0
Manitoba310.013.515.015.0
British Columbia5.01.22.0-
Arizona20.021.325.030.0
Total growth capital37.048.152.055.0
Capitalized exploration8.07.810.010.0
Total capital expenditures335.0274.0305.0300.0
Note: Excludes capitalized costs not considered to be sustaining or growth capital expenditures.
1 Sustaining capital guidance excludes right-of-use lease additions and additions as a result of equipment financing arrangements.
2 Includes capitalized stripping costs.
3 Partially funded by approximately $3 million in Canadian Development Expense flow-through financing proceeds.
4 Capital expenditures are converted into U.S. dollars using an exchange rate of 1.35 C$/US$.
5 Capital expenditure guidance reflects revised guidance issued with third quarter results, including lower anticipated capital spend in Manitoba and Peru, and new British Columbia guidance.
 

2023 total capital expenditures, excluding British Columbia, were $57 million, lower than original guidance expectations as a result of the discretionary capital reductions across the business. British Columbia capital expenditures were in line with Hudbay's 2023 guidance levels.

Total capital expenditures are expected to be $335 million for 2024. Hudbay expects to continue to reduce discretionary spending with year-over-year capital reductions in Peru and Manitoba, while spending in British Columbia will be focused on stabilization initiatives and accelerated stripping activities. Discretionary growth spending and capitalized exploration are expected to remain at low levels in 2024 and reflect a 20% decrease from 2023.

Peru's sustaining capital expenditures in 2024 are expected to decrease to $130 million primarily as a result of lower capitalized stripping. Peru's growth capital spending of $2 million in 2024 relates to continued mill recovery improvements in the molybdenum and copper circuits.

Manitoba's sustaining capital expenditures in 2024 are expected to be consistent with the lower 2023 spending, primarily due to a continued focus on streamlining costs and less mine capital development with increased post pillar mining. Manitoba's growth capital spending of $10 million in 2024 relates to the advancement of a development and exploration drift at the 1901 deposit to confirm the optimal mining method for the base metal and gold lenses and converting the inferred mineral resources in the gold lenses to mineral reserves. The 1901 growth expenditures will be partially funded by $3 million in proceeds from a Canadian Development Expense flow-through financing in December 2023.

Manitoba spending guidance excludes approximately $15 million of annual care and maintenance costs related to the Flin Flon facilities in 2024, which are expected to be recorded as other operating expenses. The 2024 Flin Flon care and maintenance costs are 25% lower than prior annual costs as a result of several cost efficiencies achieved and identified to-date.

In British Columbia, sustaining capital expenditures in 2024 are expected to be $35 million for equipment and building capital. In addition, the company expects to spend approximately $70 million for capitalized stripping costs in 2024 as it executes an accelerated stripping campaign as part of Hudbay's stabilization plan. The 2024 sustaining capital costs include a reclassification of mining costs from operating expenses to capitalized costs when compared to the December 2023 Copper Mountain technical report. This is a result of a change from contractor mining to owner-operating mining as a more cost-effective approach for the additional required stripping, as well as the elimination of mining low-grade ore to stockpile in 2024 which increases the strip ratio and allocation of mining costs to capitalized stripping despite lowering the overall tonnes moved. This change lowers the cost per tonne moved and in turn the expected cash costs for British Columbia in 2024, as noted above, but the total aggregate operating and capital costs for 2024 are expected to be in line with the December 2023 technical report.

Arizona growth capital spending of $20 million includes annual carrying and permitting costs for the Copper World and Mason projects for 2024.

Exploration Guidance

Exploration Expenditures
(in $ millions)
2024 GuidanceYear Ended
Dec. 31, 2023
2023 Guidance
Peru117.015.215.0
Manitoba223.010.415.0
British Columbia2.03.9?
Arizona and other1.02.4?
Total exploration expenditures43.031.930.0
Capitalized spending(8.0)(7.8)(10.0)
Total exploration expense35.024.120.0

1 2023 exploration guidance excludes $5 million of non-cash amortization of community agreements for exploration properties.
2 Partially funded by approximately $11 million in Canadian Exploration Expense flow-through financing proceeds.

Total expected exploration expenditures of $43 million in 2024 are 35% higher than 2023 spending primarily due to an extensive drilling program underway in Snow Lake, Manitoba. The company's 2024 exploration activities are focused on areas with high potential for new discovery and mineral reserve and resource expansion.

In Peru, 2024 exploration activities will continue to focus on permitting and drill preparation for the Maria Reyna and Caballito properties near Constancia. In Manitoba, the company has initiated the largest exploration program in its history in Snow Lake focused on testing the deep extensions of the gold and copper zones at Lalor, the Lalor Northwest target, the newly acquired Cook Lake claims and the former Rockcliff properties. The company intends to complete geophysical surveys on the new land package in the Snow Lake area to generate additional targets with plans to start drilling those targets later in 2024. A portion of the 2024 Manitoba exploration program will be funded by $11 million in proceeds from a critical minerals premium flow-through financing completed in December 2023. Hudbay issued 1,310,000 Canadian Exploration Expense ("CEE") flow-through common shares ("Flow-Through Common Shares") of the company, at a price of C$11.50 per CEE Flow-Through Common Share, representing a premium of approximately 85%.

Dividend Declared

A semi-annual dividend of C$0.01 per share was declared on February 22, 2024. The dividend will be paid out on March 22, 2024 to shareholders of record as of March 5, 2024.

Website Links

Hudbay:

www.hudbay.com

Management's Discussion and Analysis:

https://www.hudbayminerals.com/MDA0224

Financial Statements:

https://www.hudbayminerals.com/FS0224

Conference Call and Webcast

Date:Friday, February 23, 2024
Time:11:00 a.m. ET
Webcast:www.hudbay.com
Dial in:1-416-764-8650 or 1-888-664-6383
RapidConnect
  

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 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.

Non-IFRS Financial Performance Measures

Adjusted net earnings (loss), adjusted net earnings (loss) per share, 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 profit or cash flow from operations as determined under IFRS. Other companies may calculate these measures differently.

Management believes adjusted net earnings (loss) and adjusted net earnings (loss) per share 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) Reconciliation

 Three Months Ended
(in $ millions)Dec. 31, 2023Sep. 30, 2023Dec. 31, 2022
Profit (loss) for the period33.5 45.5 (17.4)
Tax expense47.5 38.7 3.1 
Profit (loss) before tax81.0 84.2 (14.3)
Adjusting items:   
Mark-to-market adjustments 112.7 1.3 10.7 
Foreign exchange (gain) loss4.2 (0.6)0.2 
Inventory adjustments1.4 ? ? 
Premium paid on redemption of notes2.2 ? ? 
Re-evaluation adjustment - environmental provision334.0 (32.4)13.5 
Acquisition related costs? 0.1 ? 
Evaluation expenses? ? 0.1 
Insurance recovery(4.2)? ? 
Value-added-tax recovery(3.9)? ? 
Write off fair value of the Copper Mountain Bonds(1.0)? ? 
Restructuring charges 20.6 2.3 1.0 
Loss on disposal of investments? ? 0.5 
Post-employment plan curtailment? ? (2.4)
Loss on disposal of plant and equipment and non-current assets6.6 ? 0.4 
Changes in other provisions (non-capital) 4? ? 5.8 
Adjusted earnings (loss) before income taxes134.1 54.9 15.5 
Tax expense(47.5)(38.7)(3.1)
Tax impact on adjusting items(14.8)8.2 (9.8)
Adjusted net earnings71.3 24.4 2.6 
Adjusted net earnings ($/share)0.20 0.07 0.01 
Basic weighted average number of common shares outstanding (millions)349.1 346.7 262.0 

1 Includes changes in fair value of the gold prepayment liability, Canadian junior mining investments, other financial assets and liabilities at fair value through profit or loss and share-based compensation expenses.
2 Includes closure cost for the Flin Flon operations in 2022 and restructuring charges for British Columbia in 2023.
3 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 and British Columbia non-operating sites.
4 Includes changes in other provisions related to corporate restructuring costs and costs which do not pertain to operations.

 Year Ended
(in $ millions)Dec. 31, 2023Dec. 31, 2022
Profit for the period69.5 70.4 
Tax expense82.3 25.4 
Profit before tax151.8 95.8 
Adjusting items:  
Mark-to-market adjustments 121.4 3.0 
Foreign exchange loss (gain)5.3 (5.4)
Inventory adjustments2.3 3.6 
Variable consideration adjustment - stream revenue and accretion(5.0)(1.9)
Premium paid on redemption of notes2.2 ? 
Impairment - Arizona? 95.0 
Re-evaluation adjustment - environmental provision3(11.4)(133.5)
Acquisition related costs6.9 ? 
Evaluation expenses? 7.9 
Insurance recovery(4.2)(5.7)
Value-added-tax recovery(3.9)? 
Write off fair value of the Copper Mountain Bonds(1.0)? 
Restructuring charges 22.9 10.6 
Loss on disposal of investments0.7 3.6 
Post-employment plan curtailment? (2.4)
Loss (gain) on disposal of plant and equipment and non-current assets7.4 (6.3)
Changes in other provisions (non-capital) 4? 5.8 
Adjusted earnings before income taxes175.4 70.1 
Tax expense(82.3)(25.4)
Tax impact on adjusting items(20.6)(18.3)
Adjusted net earnings72.5 26.4 
Adjusted net earnings ($/share)0.23 0.10 
Basic weighted average number of common shares outstanding (millions)310.8 261.9 

1 Includes changes in fair value of the gold prepayment liability, Canadian junior mining investments, other financial assets and liabilities at fair value through profit or loss and share-based compensation expenses.
2 Includes closure cost for the Flin Flon operations and restructuring charges for British Columbia in 2023.
3 Changes from movements to environmental reclamation provisions are primarily related to the Flin Flon operations, which were fully depreciated as of June 30, 2023, as well as other Manitoba and British Columbia non-operating sites.
4 Includes changes in other provisions related to corporate restructuring costs and costs which do not pertain to operations.

Adjusted EBITDA Reconciliation

 Three Months Ended
(in $ millions)Dec. 31, 2023Sep. 30, 2023Dec. 31, 2022
Profit (loss) for the period33.5 45.5 (17.4)
Add back:   
Tax expense (recovery)47.5 38.7 3.1 
Net finance expense48.9 30.9 36.7 
Other expenses10.6 8.9 18.5 
Depreciation and amortization121.9 113.8 79.4 
Amortization of deferred revenue and variable consideration adjustment(26.5)(16.8)(10.4)
 235.9 221.0 109.9 
Adjusting items (pre-tax):   
Re-evaluation adjustment - environmental provision34.0 (32.4)13.5 
Inventory adjustments1.4 ? ? 
Post-employment plan curtailment? ? (2.4)
Share-based compensation expense 13.1 2.1 3.7 
Adjusted EBITDA274.4 190.7 124.7 

1 Share-based compensation expenses reflected in cost of sales and selling and administrative expenses.

 Year Ended
(in $ millions)Dec. 31, 2023Dec. 31, 2022
Profit (loss) for the period69.5 70.4 
Add back:   
Tax expense82.3 25.4 
Net finance expense145.3 118.5 
Other expenses38.2 32.6 
Depreciation and amortization391.7 337.6 
Amortization of deferred revenue and variable consideration adjustment(77.3)(73.2)
 649.8 511.3 
Adjusting items (pre-tax):  
Impairment losses? 95.0 
Re-evaluation adjustment - environmental provision(11.4)(133.5)
Inventory adjustments2.3 3.6 
Post-employment plan curtailment? (2.4)
Share-based compensation expenses 17.1 1.9 
Adjusted EBITDA647.8 475.9 

1 Share-based compensation expenses reflected in cost of sales and selling and administrative expenses.
Net Debt Reconciliation

(in $ thousands) 
 Dec. 31, 2023Sep. 30, 2023Dec. 31, 2022
Total long-term debt1,287,5361,377,4431,184,162
Less: Cash and cash equivalents249,794245,217225,665
Net debt1,037,7421,132,226958,497
(in $ millions, except net debt to adjusted EBITDA ratio)   
Net debt1,037.71,132.2958.5
Adjusted EBITDA (12 month period)647.8498.5475.9
Net debt to adjusted EBITDA1.62.32.0


Trailing Adjusted EBITDAThree Months EndedLTM1
(in $ millions)Sep. 30, 2023Jun. 30, 2023Mar. 31, 2023Sep. 30, 2023
Profit (loss) for the period45.5 (14.9)5.4 (17.4)18.6 
Add back:     
Tax expense (recovery)38.7 (15.8)12.0 3.1 38.0 
Net finance expense30.9 30.5 35.0 36.7 133.1 
Other expenses8.9 13.9 5.0 18.5 46.3 
Depreciation and amortization113.8 88.7 67.4 79.4 349.3 
Amortization of deferred revenue and variable consideration adjustment(16.8)(18.1)(15.9)(10.4)(61.2)
Adjusting items (pre-tax):     
Re-evaluation adjustment - environmental provision(32.4)(4.7)(8.2)13.5 (31.8)
Inventory adjustments- 0.9 - - 0.9 
Post-employment plan curtailment- - - (2.4)(2.4)
Share-based compensation expenses22.1 0.7 1.2 3.7 7.7 
Adjusted EBITDA190.7 81.2 101.9 124.7 498.5 

1 LTM (last twelve months) as of September 30, 2023.
2 Share-based compensation expense reflected in cost of sales and administrative expenses.

Copper Cash Cost Reconciliation

ConsolidatedThree Months Ended
Net pounds of copper produced1   
(in thousands)Dec. 31, 2023Sep. 30, 2023Dec. 31, 2022
Peru73,20964,11259,628
British Columbia218,75520,510?
Manitoba8,2347,8934,978
Net pounds of copper produced100,19892,51564,606


ConsolidatedYear Ended
Net pounds of copper produced1  
(in thousands)Dec. 31, 2023Dec. 31, 2022
Peru221,536197,082
British Columbia241,995?
Manitoba26,79532,580
Net pounds of copper produced290,326229,662

1 Contained copper in concentrate.
2 Includes 100% of Copper Mountain mine production, Hudbay owns 75% of Copper Mountain mine. As Copper Mountain was acquired on June 20, 2023, there were no comparative 2022 figures.

ConsolidatedThree Months Ended
 Dec. 31, 2023Sep. 30, 2023Dec. 31, 2022
Cash cost per pound of copper produced$000s
$/lb$000s$/lb$000s$/lb
Mining89,587 0.89 104,547 1.13 79,759 1.23 
Milling90,763 0.91 88,021 0.95 65,591 1.02 
G&A38,937 0.39 36,107 0.39 21,269 0.33 
Onsite costs219,287 2.19 228,675 2.47 166,619 2.58 
Treatment & refining35,665 0.36 32,882 0.36 19,968 0.31 
Freight & other32,273 0.32 26,853 0.29 22,055 0.34 
Cash cost, before by-product credits287,225 2.87 288,410 3.12 208,642 3.23 
By-product credits(271,738)(2.71)(187,023)(2.02)(138,990)(2.15)
Cash cost, net of by-product credits15,487 0.16 101,387 1.10 69,652 1.08 


ConsolidatedYear Ended
    Dec. 31, 2023Dec. 31, 2022
Cash cost per pound of copper produced  $000s$/lb$000s$/lb
Mining  332,007 1.14 330,250 1.44 
Milling  309,692 1.07 269,055 1.17 
Refining (zinc)  ? ? 32,755 0.14 
G&A  122,574 0.42 125,454 0.55 
Onsite costs  764,273 2.63 757,514 3.30 
Treatment & refining  113,712 0.39 68,936 0.29 
Freight & other  94,668 0.33 79,815 0.35 
Cash cost, before by-product credits  972,653 3.35 906,265 3.94 
By-product credits  (741,288)(2.55)(708,334)(3.08)
Cash cost, net of by-product credits  231,365 0.80 197,931 0.86 


ConsolidatedThree Months Ended
 Dec. 31, 2023Sep. 30, 2023Dec. 31, 2022
Supplementary cash cost information$000s$/lb1$000s$/lb1$000s$/lb1
By-product credits2:      
Zinc18,474 0.1817,099 0.1824,744 0.38
Gold3216,178 2.16129,954 1.4176,336 1.18
Silver322,698 0.2316,724 0.189,592 0.15
Molybdenum & other14,388 0.1423,246 0.2528,318 0.44
Total by-product credits271,738 2.71187,023 2.02138,990 2.15
Reconciliation to IFRS:      
Cash cost, net of by-product credits15,487  101,387  69,652  
By-product credits271,738  187,023  138,990  
Treatment and refining charges(35,665) (32,882) (19,968) 
Share-based compensation expense301  149  490  
Inventory adjustments1,402  ?  7  
Post employment plan curtailment?  ?  (2,384) 
Change in product inventory29,326  3,374  (16,425) 
Royalties1,032  1,253  1,750  
Depreciation and amortization4121,812  113,753  79,408  
Cost of sales5405,433  374,057  251,520  

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 December 31, 2023, September 30, 2023 and December 31, 2022 the variable consideration adjustments amounted to nil.
4 Depreciation is based on concentrate sold.
5 As per IFRS consolidated financial statements excluding impairment adjustments.

ConsolidatedYear Ended
 Dec. 31, 2023Dec. 31, 2022
Supplementary cash cost information$000s$/lb1$000s$/lb1
By-product credits2:    
Zinc74,842 0.26224,043 0.98
Gold3525,637 1.80353,478 1.53
Silver368,701 0.2462,252 0.27
Molybdenum & other72,108 0.2568,561 0.30
Total by-product credits741,288 2.55708,334 3.08
Reconciliation to IFRS:    
Cash cost, net of by-product credits231,365  197,931  
By-product credits741,288  708,334  
Treatment and refining charges(113,712) (68,936) 
Share-based compensation expense589  420  
Inventory adjustments2,308  3,553  
Post employment plan curtailment?  (2,384) 
Change in product inventory38,405  (3,125) 
Royalties5,569  11,144  
Depreciation and amortization4391,657  337,615  
Cost of sales51,297,469  1,184,552  

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. 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 year ended December 31, 2023 the variable consideration adjustments amounted income of $4,885 (year ended December 31, 2022 - income of $959)
4 Depreciation is based on concentrate sold.
5 As per IFRS consolidated financial statements, excluding impairment adjustments.

PeruThree Months Ended
(in thousands)Dec. 31, 2023Sep. 30, 2023Dec. 31, 2022
Net pounds of copper produced1 73,20964,11259,628

1 Contained copper in concentrate.

PeruYear Ended
(in thousands)Dec. 31, 2023Dec. 31, 2022
Net pounds of copper produced1 221,536197,082

1 Contained copper in concentrate.

PeruThree Months Ended
 Dec. 31, 2023Sep. 30, 2023Dec. 31, 2022
Cash cost per pound of copper produced$000s$/lb$000s$/lb$000s$/lb
Mining30,336 0.41 33,875 0.53 41,647 0.70 
Milling50,199 0.69 46,996 0.73 50,723 0.85 
G&A24,909 0.34 20,912 0.33 14,817 0.25 
Onsite costs105,444 1.44 101,783 1.59 107,187 1.80 
Treatment & refining19,626 0.27 19,143 0.30 11,962 0.20 
Freight & other20,854 0.28 17,040 0.26 15,607 0.26 
Cash cost, before by-product credits145,924 1.99 137,966 2.15 134,756 2.26 
By-product credits(106,227)(1.45)(84,793)(1.32)(54,563)(0.92)
Cash cost, net of by-product credits39,697 0.54 53,173 0.83 80,193 1.34 


PeruYear Ended
 Dec. 31, 2023
Dec. 31, 2022
Cash cost per pound of copper produced$000s$/lb$000s$/lb
Mining122,651 0.55 137,546 0.70 
Milling198,062 0.90 195,152 0.99 
G&A77,154 0.35 63,015 0.32 
Onsite costs397,867 1.80 395,713 2.01 
Treatment & refining66,469 0.30 39,587 0.20 
Freight & other62,745 0.28 50,284 0.25 
Cash cost, before by-product credits527,081 2.38 485,584 2.46 
By-product credits(289,112)(1.31)(173,488)(0.88)
Cash cost, net of by-product credits237,969 1.07 312,096 1.58 


PeruThree Months Ended
 Dec. 31, 2023
Sep. 30, 2023
Dec. 31, 2022
Supplementary cash cost information$000s
$/lb1$000s$/lb1$000s$/lb1
By-product credits2:      
Gold377,517 1.0551,459 0.8019,934 0.33
Silver314,322 0.2010,088 0.167,025 0.12
Molybdenum14,388 0.2023,246 0.3627,604 0.47
Total by-product credits106,227 1.4584,793 1.3254,563 0.92
Reconciliation to IFRS:      
Cash cost, net of by-product credits39,697  53,173  80,193  
By-product credits106,227  84,793  54,563  
Treatment and refining charges(19,626) (19,143) (11,962) 
Share-based compensation expenses85  45  95  
Change in product inventory8,048  4,137  (15,685) 
Royalties1,456  1,015  1,656  
Depreciation and amortization485,722  80,625  58,256  
Cost of sales5221,609  204,645  167,116  

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 financial statements.

PeruYear Ended
 Dec. 31, 2023Dec. 31, 2022
Supplementary cash cost information$000s$/lb1$000s$/lb1
By-product credits2:    
Gold3169,915 0.7768,630 0.35
Silver347,328 0.2141,671 0.21
Molybdenum71,869 0.3363,187 0.32
Total by-product credits289,112 1.31173,488 0.88
Reconciliation to IFRS:    
Cash cost, net of by-product credits237,969  312,096  
By-product credits289,112  173,488  
Treatment and refining charges(66,469) (39,587) 
Inventory adjustments?  (558) 
Share-based compensation expenses145  77  
Change in product inventory28,128  (31,348) 
Royalties5,615  5,367  
Depreciation and amortization4275,647  211,043  
Cost of sales5770,147  630,578  

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 financial statements, excluding impairment adjustments.

British ColumbiaThree Months EndedYear Ended
(in thousands)Dec. 31, 2023Sep. 30, 2023Dec. 31, 2023
Net pounds of copper produced1 18,75520,51041,995

1 Contained copper in concentrate.

British ColumbiaThree Months EndedYear Ended
 Dec. 31, 2023Sep. 30, 2023Dec. 31, 2023
Cash cost per pound of copper produced$000s$/lb$000s$/lb$000s$/lb
Mining19,015 1.01 29,251 1.43 48,266 1.15 
Milling25,218 1.35 24,102 1.17 49,320 1.17 
G&A5,643 0.30 5,050 0.25 10,693 0.25 
Onsite costs49,876 2.66 58,403 2.85 108,279 2.57 
Treatment & refining4,850 0.26 4,905 0.24 9,755 0.23 
Freight & other4,654 0.25 3,693 0.18 8,347 0.20 
Cash cost, before by-product credits59,380 3.17 67,001 3.27 126,381 3.00 
By-product credits(9,286)(0.50)(12,234)(0.60)(21,520)(0.51)
Cash cost, net of by-product credits50,094 2.67 54,767 2.67 104,861 2.49 


British ColumbiaThree Months EndedYear Ended
 Dec. 31, 2023Sep. 30, 2023Dec. 31, 2023
Supplementary cash cost information$000s$/lb$000s$/lb$000s$/lb
By-product credits2:      
Gold6,876 0.3710,120 0.5016,996 0.40
Silver2,410 0.132,114 0.104,524 0.11
Total by-product credits9,286 0.5012,234 0.6021,520 0.51
Reconciliation to IFRS:      
Cash cost, net of by-product credits50,094  54,767  104,861  
By-product credits9,286  12,234  21,520  
Treatment and refining charges(4,850) (4,905) (9,755) 
Change in product inventory8,469  3  8,472  
Royalties(424) 237  (187) 
Depreciation and amortization35,489  6,255  11,744  
Cost of sales468,064  68,591  136,655  

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 Depreciation is based on concentrate sold.
4 As per consolidated financial statements.

Sustaining and All-in Sustaining Cash Cost Reconciliation

ConsolidatedThree Months Ended
 Dec. 31, 2023Sep. 30, 2023Dec. 31, 2022
All-in sustaining cash cost per pound of copper produced $000s$/lb$000s$/lb$000s$/lb
Cash cost, net of by-product credits15,4870.15101,3871.1069,6521.08
Cash sustaining capital expenditures87,6090.8872,1930.7860,0020.92
Capitalized exploration5,1500.05??11,5000.18
Royalties1,0320.011,2530.011,7500.03
Sustaining cash cost, net of by-product credits109,2781.09174,8331.89142,9042.21
Corporate selling and administrative expenses & regional costs12,7270.1310,9710.1211,8760.19
Accretion and amortization of decommissioning and community agreements18,9670.093,3090.037220.01
All-in sustaining cash cost, net of by-product credits130,9721.31189,1132.04155,5022.41
Reconciliation to property, plant and equipment additions:      
Property, plant and equipment additions53,680 77,454 76,933 
Capitalized stripping net additions41,221 21,762 15,169 
Total accrued capital additions94,901 99,216 92,102 
Less other non-sustaining capital costs219,945 37,968 41,850 
Total sustaining capital costs74,956 61,248 50,252 
Capitalized lease cash payments - operating sites8,708 7,199 5,848 
Community agreement cash payments2,274 1,953 2,854 
Accretion and amortization of decommissioning and restoration obligations31,671 1,793 1,048 
Cash sustaining capital expenditures87,679 72,193 60,002 

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 expenditures.
3 Includes amortization of decommissioning and restoration PP&E assets and accretion of decommissioning and restoration liabilities related to producing sites.

Consolidated
Year Ended
  Dec. 31, 2023Dec. 31, 2022
All-in sustaining cash cost per pound of copper produced$000s$/lb$000s$/lb
Cash cost, net of by-product credits231,3650.80197,9310.86
Cash sustaining capital expenditures255,9240.88255,7251.11
Capitalized exploration5,1500.0211,5000.05
Royalties5,5690.0211,1440.05
Sustaining cash cost, net of by-product credits498,0081.72476,3002.07
Corporate selling and administrative expenses & regional costs43,5160.1438,7990.17
Accretion and amortization of decommissioning and community agreements116,0360.064,4160.02
All-in sustaining cash cost, net of by-product credits557,5601.92519,5152.26
Reconciliation to property, plant and equipment additions:    
Property, plant and equipment additions212,261 259,281 
Capitalized stripping net additions111,607 89,262 
Total accrued capital additions323,868 348,543 
Less other non-sustaining capital costs2105,767 147,749 
Total sustaining capital costs218,101 200,794 
Capitalized lease cash payments - operating sites24,983 33,271 
Community agreement cash payments6,706 9,486 
Accretion and amortization of decommissioning and restoration obligations36,165 12,174 
Cash sustaining capital expenditures255,994 255,725 

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 expenditures.
3 Includes amortization of decommissioning and restoration PP&E assets and accretion of decommissioning and restoration liabilities related to producing sites.

PeruThree Months Ended
 Dec. 31, 2023
Sep. 30, 2023Dec. 31, 2022
Sustaining cash cost per pound of copper produced$000s$/lb$000s$/lb$000s$/lb
Cash cost, net of by-product credits39,6970.5453,1730.8380,1931.34
Cash sustaining capital expenditures42,3510.5842,6070.6631,2400.53
Capitalized exploration15,1500.07??11,5000.19
Royalties1,4560.021,0150.021,6560.03
Sustaining cash cost per pound of copper produced88,6541.2196,7951.51124,5892.09

1 Only includes exploration costs incurred for locations near to existing mine operations.

PeruYear Ended
 Dec. 31, 2023Dec. 31, 2022
Sustaining cash cost per pound of copper produced$000s$/lb$000s$/lb
Cash cost, net of by-product credits237,9691.07312,0961.58
Cash sustaining capital expenditures151,9470.69133,3130.68
Capitalized exploration15,1500.0211,5000.06
Royalties5,6150.035,3670.03
Sustaining cash cost per pound of copper produced400,6811.81462,2762.35

1 Only includes exploration costs incurred for locations near to existing mine operations.

British Columbia
Three Months Ended
Year Ended
 Dec. 31, 2023Sep. 30, 2023Dec. 31, 2023
Sustaining cash cost per pound of copper produced$000s$/lb$000s$/lb$000s$/lb
Cash cost, net of by-product credits50,094 2.67 54,7672.67104,861 2.49
Royalties(424)(0.02)2370.01(187)?
Cash sustaining capital expenditures24,063 1.28 14,4870.7138,550 0.92
Sustaining cash cost per pound of copper produced73,733 3.93 69,4913.39143,224 3.41

Gold Cash Cost and Sustaining Cash Cost Reconciliation

Manitoba
Three Months Ended
(in thousands)Dec. 31, 2023Sep. 30, 2023Dec. 31, 2022
Net ounces of gold produced159,86356,21333,060

1 Contained gold in concentrate and doré.

ManitobaYear Ended
(in thousands)Dec. 31, 2023Dec. 31, 2022
Net ounces of gold produced1187,363161,471

1 Contained gold in concentrate and doré.

ManitobaThree Months Ended
 Dec. 31, 2023Sep. 30, 2023Dec. 31, 2022
Cash cost per ounce of gold produced$000s$/oz$000s$/oz$000s$/oz
Mining40,236 673 41,421 737 38,112 1,153 
Milling15,346 256 16,923 301 14,868 450 
Refining (Zinc)? ? ? ? ? ? 
G&A8,385 140 10,145 180 6,452 195 
Onsite costs63,967 1,069 68,489 1,218 59,432 1,798 
Treatment & refining11,189 186 8,834 157 8,006 242 
Freight & other6,765 113 6,120 109 6,448 195 
Cash cost, before by-product credits81,921 1,368 83,443 1,484 73,886 2,235 
By-product credits(55,928)(934)(45,779)(814)(43,407)(1,313)
Gold cash cost, net of by-product credits25,993 434 37,664 670 30,479 922 


Manitoba Year Ended
 Dec. 31, 2023
Dec. 31, 2022
Cash cost per ounce of gold produced$000s$/oz$000s$/oz
Mining161,090 860 192,704 1,193 
Milling62,310 333 73,903 458 
Refining (zinc)? ? 32,755 203 
G&A34,727 185 62,439 387 
Onsite costs258,127 1,378 361,801 2,241 
Treatment & refining37,488 200 29,349 181 
Freight & other23,576 126 29,531 183 
Cash cost, before by-product credits319,191 1,704 420,681 2,605 
By-product credits(183,056)(977)(372,783)(2,308)
Gold cash cost, net of by-product credits136,135 727 47,898 297 


ManitobaThree Months Ended
 Dec. 31, 2023Sep. 30, 2023Dec. 31, 2022
Supplementary cash cost information$000s$/oz1$000s$/oz1$000s$/oz1
By-product credits2:      
Copper31,489 52624,158 43015,382 465
Zinc18,473 30817,099 30424,744 748
Silver35,966 1004,522 802,567 78
Other? ?? ?714 22
Total by-product credits55,928 93445,779 81443,407 1,313
Reconciliation to IFRS:      
Cash cost, net of by-product credits25,993  37,664  30,479  
By-product credits55,928  45,779  43,407  
Treatment and refining charges(11,189) (8,834) (8,006) 
Inventory adjustments1,402  ?  7  
Share-based compensation expenses216  104  395  
Past service curtailment?  ?  (2,384) 
Change in product inventory12,809  (766) (740) 
Royalties?  1  94  
Depreciation and amortization430,601  26,873  21,152  
Cost of sales5115,760  100,821  84,404  

1 Per ounce of gold produced.
2 By-product credits are computed as revenue per consolidated financial statements, amortization of deferred revenue and pricing and volume adjustments.
3 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 financial statements, excluding impairment adjustments.

ManitobaYear Ended
 Dec. 31, 2023Dec. 31, 2022
Supplementary cash cost information$000s$/oz1$000s$/oz1
By-product credits2:    
Copper91,126 487122,785 760
Zinc74,842 399224,043 1,388
Silver316,849 9020,581 127
Other239 15,374 33
Total by-product credits183,056 977372,783 2,308
Reconciliation to IFRS:    
Cash cost, net of by-product credits136,135  47,898  
By-product credits183,056  372,783  
Treatment and refining charges(37,488) (29,349) 
Inventory adjustments2,308  4,111  
Share-based compensation expenses444  343  
Past service curtailment?  (2,384) 
Change in product inventory1,805  28,223  
Royalties141  5,777  
Depreciation and amortization4104,266  126,572  
Cost of sales5390,667  553,974  

1 Per ounce of gold produced.
2 By-product credits are computed as revenue per consolidated financial statements, amortization of deferred revenue and pricing and volume adjustments.
3 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 financial statements, excluding impairment adjustments.

ManitobaThree Months Ended
 Dec. 31, 2023Sep. 30, 2023
Dec. 31, 2022
Sustaining cash cost per pound of gold produced$000s$/oz$000s$/oz$000s$/oz
Gold cash cost, net of by-product credits25,99343437,66467030,479922
Cash sustaining capital expenditures21,19535415,10026928,762870
Royalties??1?943
Sustaining cash cost per pound of gold produced47,18878852,76593959,3351,795


ManitobaYear Ended
 Dec. 31, 2023
Dec. 31, 2022
Sustaining cash cost per pound of gold produced$000s$/oz$000s$/oz
Gold cash cost, net of by-product credits136,13572747,898297
Cash sustaining capital expenditures65,427349122,412758
Royalties14115,77736
Sustaining cash cost per pound of gold produced201,7031,077176,0871,091


Combined Unit Cost Reconciliation

PeruThree Months Ended
(in thousands except ore tonnes milled and unit cost per tonne)
Combined unit cost per tonne processedDec. 31, 2023Sep. 30, 2023Dec. 31, 2022
Mining30,336 33,875 41,647 
Milling50,199 46,996 50,723 
G&A124,909 20,912 14,817 
Other G&A2(8,303)(5,440)(152)
 97,141 96,343 107,035 
Less: Covid related costs? ? 689 
Unit cost97,141 96,343 106,346 
Tonnes ore milled7,939 7,895 7,796 
Combined unit cost per tonne12.24 12.20 13.64 
Reconciliation to IFRS:   
Unit cost97,141 96,343 106,346 
Freight & other20,854 17,040 15,607 
Covid related costs? ? 689 
Other G&A8,303 5,440 152 
Share-based compensation expenses85 45 95 
Change in product inventory8,048 4,137 (15,685)
Royalties1,456 1,015 1,656 
Depreciation and amortization85,722 80,625 58,256 
Cost of sales3221,609 204,645 167,116 

1 G&A as per cash cost reconciliation above.
2 Other G&A primarily includes profit sharing costs.
3 As per IFRS consolidated financial statements, excluding impairment adjustments.

Peru Year Ended
(in thousands except ore tonnes milled and unit cost per tonne)
Combined unit cost per tonne processed Dec. 31, 2023Dec. 31, 2022
Mining 122,651 137,546 
Milling 198,062 195,152 
G&A1 77,154 63,015 
Other G&A2 (14,824)(414)
  383,043 395,299 
Less: Covid related costs ? 5,214 
Unit cost 383,043 390,085 
Tonnes ore milled 30,721 30,522 
Combined unit cost per tonne 12.47 12.78 
Reconciliation to IFRS:   
Unit cost 383,043 390,085 
Freight & other 62,745 50,284 
Covid related costs ? 5,214 
Other G&A 14,824 414 
Share-based compensation expenses 145 77 
Inventory adjustments ? (558)
Change in product inventory 28,128 (31,348)
Royalties 5,615 5,367 
Depreciation and amortization 275,647 211,043 
Cost of sales3 770,147 630,578 

1 G&A as per cash cost reconciliation above.
2 Other G&A primarily includes profit sharing costs.
3 As per IFRS consolidated financial statements, excluding impairment adjustments.

British ColumbiaThree Months Ended
Year Ended
(in thousands except unit cost per tonne)
Combined unit cost per tonne processedDec. 31, 2023Sep. 30, 2023Dec. 31, 2023
Mining19,015 29,25148,266 
Milling25,218 24,10249,320 
G&A15,643 5,05010,693 
Unit cost49,876 58,403108,279 
USD/CAD implicit exchange rate1.37 1.351.36 
Unit cost - C$68,168 78,566146,734 
Tonnes ore milled3,262 3,1586,862 
Combined unit cost per tonne - C$20.90 24.8821.38 
Reconciliation to IFRS:   
Unit cost49,876 58,403108,279 
Freight & other4,654 3,6938,347 
Change in product inventory8,469 38,472 
Royalties(424)237(187)
Depreciation and amortization5,489 6,25511,744 
Cost of sales268,064 68,591136,655 

1 G&A as per cash cost reconciliation above
2 Other G&A primarily includes profit sharing costs.
3 As per consolidated financial statements.

ManitobaThree Months Ended
(in thousands except tonnes ore milled and unit cost per tonne)
Combined unit cost per tonne processedDec. 31, 2023Sep. 30, 2023Dec. 31, 2022
Mining40,236 41,421 38,112 
Milling15,346 16,923 14,868 
G&A18,385 10,145 6,452 
Less: Other G&A related to profit sharing costs(1,522)(3,308)1,939 
Unit cost62,445 65,181 61,371 
USD/CAD implicit exchange rate1.36 1.34 1.36 
Unit cost - C$85,013 87,363 83,363 
Tonnes ore milled393,837 402,443 345,492 
Combined unit cost per tonne - C$216 217 241 
Reconciliation to IFRS:   
Unit cost62,445 65,181 61,371 
Freight & other6,765 6,120 6,448 
Other G&A related to profit sharing1,522 3,308 (1,939)
Share-based compensation expenses216 104 395 
Inventory adjustments1,402 ? 7 
Past service pension/Curtailment? ? (2,384)
Change in product inventory12,809 (766)(740)
Royalties? 1 94 
Depreciation and amortization30,601 26,873 21,152 
Cost of sales2115,760 100,821 84,404 

1 G&A as per cash cost reconciliation above.
2 As per IFRS consolidated financial statements, excluding impairment adjustments.

Manitoba Year Ended
(in thousands except tonnes ore milled and unit cost per tonne)
Combined unit cost per tonne processed Dec. 31, 2023Dec. 31, 2022
Mining 161,090 192,704 
Milling 62,310 73,903 
G&A1 34,727 62,439 
Less: G&A allocated to zinc metal production and other areas ? (6,523)
Less: Other G&A related to profit sharing costs (6,650)(20,075)
Unit cost 251,477 302,448 
USD/CAD implicit exchange rate 1.35 1.30 
Unit cost - C$ 339,229 391,782 
Tonnes ore milled 1,562,479 2,008,251 
Combined unit cost per tonne - C$ 217 195 
Reconciliation to IFRS:   
Unit cost 251,477 302,448 
Freight & other 23,576 29,531 
Refined zinc ? 32,755 
G&A allocated to zinc metal production ? 6,523 
Other G&A related to profit sharing 6,650 20,075 
Share-based compensation expenses 444 343 
Inventory adjustments 2,308 4,111 
Past service pension/Curtailment ? (2,384)
Change in product inventory 1,805 28,223 
Royalties 141 5,777 
Depreciation and amortization 104,266 126,572 
Cost of sales2 390,667 553,974 

1 G&A as per cash cost reconciliation above.
2 As per IFRS consolidated financial statements, excluding impairment adjustments.

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 and achieve operating synergies, the fleet production ramp up plan and the accelerated stripping strategies at the Copper Mountain site, the ability of the company to complete business integration activities at the Copper Mountain mine, 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 advancement of the development and exploration drift at the 1901 deposit; the anticipated use of proceeds from the flow-through financing completed during the fourth quarter of 2023, the company's future deleveraging strategies and the company's ability to deleverage and repay debt as needed, expectations regarding the company's cash balance and liquidity, the company's ability to increase the mining rate at Lalor, the anticipated benefits from completing the Stall recovery improvement program, 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, 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 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 and the process for designing, implementing and maintaining effective internal controls for Copper Mountain, the failure to effectively complete the integration and optimization of the Copper Mountain operations or to achieve anticipated operating synergies, 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, risks related to the renegotiation of collective bargaining agreements with the labour unions representing certain of our employees in Manitoba and Peru, 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, 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 and under the heading "Financial Risk Management" in the company's most recent management's discussion and analysis, each of 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
[email protected]

____________________
i Adjusted net earnings (loss) and adjusted net earnings (loss) per share; 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 Calculated using the mid-point of the guidance range.
iii Sourced from S&P Global, August 2023.



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