Hudbay Minerals Inc. (“Hudbay” or the “company”) (TSX,
NYSE:HBM) today released its first quarter 2019 financial
results. All amounts are in U.S. dollars, unless otherwise noted.
“In the first quarter, Hudbay continued to
maximize the potential of our Peru and Manitoba operating assets
with record copper recoveries at Constancia and record throughput
at both Lalor and our Stall concentrator,” said Alan Hair,
President and Chief Executive Officer. “We achieved several
de-risking milestones at our Rosemont project in Arizona, including
receipt of the federal 404 water permit, receipt of the approved
mine plan of operations, initiation of an early works program and
consolidation of 100% ownership in Rosemont through the acquisition
of the minority joint venture interest. We are pleased to be moving
Rosemont forward, one of the best undeveloped copper projects,
leveraging our industry-leading project development expertise to
generate significant returns for shareholders.”
“Our focus for 2019 is to continue to deliver on
a number of near-term catalysts, including advancing our new Lalor
gold strategy, completing the early works program and finalizing
financing arrangements for Rosemont, developing the high-grade
Pampacancha satellite deposit, continuing to maximize throughput
and recoveries at Constancia, and advancing both near-mine and
greenfield exploration activities,” stated Mr. Hair. “Following the
positive new mine plan for Lalor gold announced in February, we are
pleased with the recent exploration results in Snow Lake and the
potential to unlock further value through resource conversion,
Lalor in-mine extension and definition of other known regional
deposits to maximize the availability of our base metal and gold
concentrators in Snow Lake.”
Operating cash flow before change in non-cash
working capital was $89.6 million during the first quarter of 2019,
reflecting a decrease of $42.2 million compared to the first
quarter of 2018. The decrease in operating cash flow is the result
of lower realized prices and lower sales volumes of copper, gold
and zinc and higher cash costs, compared to the first quarter of
2018. Copper-equivalent production in the first quarter of 2019
decreased by 6% compared to the same period in 2018, primarily as a
result of lower production in Manitoba following the closure of the
Reed mine. Cash generated from operating activities decreased to
$61.7 million in the first quarter of 2019 from $131.4 million in
the same quarter of 2018. The decrease is due lower realized prices
and sales volumes for copper, gold and zinc as well as non-cash
working capital movements. Net loss and loss per share in the first
quarter of 2019 were $13.4 million and $0.05, respectively,
compared to a net profit and earnings per share of $41.4 million
and $0.16, respectively, in the first quarter of 2018.
Net loss and loss per share in the first quarter of 2019 were
affected by, among other things, the following items:
|
|
|
Pre-tax gain (loss) |
|
After-tax gain (loss) |
|
Per share gain (loss) |
|
|
|
|
($ millions) |
($ millions) |
|
($/share) |
|
|
Non-cash deferred tax adjustments |
- |
|
3.2 |
|
0.01 |
|
|
Deferred revenue adjustment from increased
reserves and resources |
(22.3) |
|
(15.9) |
|
(0.06) |
|
|
Pampacancha delivery obligation |
(7.5) |
|
(7.5) |
|
(0.03) |
|
In the first quarter of 2019, consolidated cash
cost per pound of copper produced1, net of by-product credits, was
$1.11, an increase compared to $0.98 in the same period last year.
Cash costs per pound of copper produced, net of by–product credits,
increased as a result of lower copper and zinc production and lower
realized zinc prices. Incorporating sustaining capital, capitalized
exploration, royalties, selling, administrative and regional costs,
consolidated all-in sustaining cash cost per pound of copper
produced1, net of by-product credits, in the first quarter of 2019
was $1.81, which increased from $1.46 in the first quarter of 2018,
driven mainly by the decrease in copper and zinc production as well
as increases to general and administrative expenses arising
primarily from share-based payment expenses.
Net debt1 increased by $26.0 million from
December 31, 2018 to $491.5 million at March 31, 2019, primarily
due to $27.9 million in working capital movements impacting cash
generated. At March 31, 2019, total liquidity, including cash and
available credit facilities, was $940.3 million, up from $937.0
million as at December 31, 2018. During the first quarter of 2019,
Hudbay recorded a non-cash true up adjustment on its streaming
revenues due mainly to a revised, higher estimate of reserves and
resources at the 777 mine, as the company extended the mine life by
four months to the second quarter of 2022. The reduced deferred
revenue drawdown rate for Manitoba which, in accordance with IFRS,
is recalculated back to the inception of the stream, resulted in a
pre-tax revenue reversal of approximately $16.3 million. There was
also a similar non-cash adjustment made to finance costs related to
the stream which resulted in increased finance expense of $6.0
million.
Financial Condition ($000s) |
Mar. 31, 2019 |
Dec. 31, 2018 |
Cash
and cash equivalents |
485,867 |
515,497 |
Total long-term
debt |
977,413 |
981,030 |
Net debt1 |
491,546 |
465,533 |
Working capital |
502,571 |
445,228 |
Total assets |
4,713,899 |
4,685,635 |
Equity |
2,160,898 |
2,178,856 |
1 Net debt is a non-IFRS financial performance measure with no
standardized definition under IFRS. For further information, please
see page 7 of this news release.
Financial Performance |
Three months ended |
($000s except per share and cash cost amounts) |
Mar. 31, 2019 |
Mar. 31, 2018 |
Revenue |
292,258 |
386,656 |
Cost of
sales |
240,446 |
265,885 |
(Loss)
profit before tax |
(18,108) |
73,103 |
(Loss)
profit |
(13,412) |
41,445 |
Basic and
diluted (loss) earnings per share |
(0.05) |
0.16 |
Operating cash flow before change in non-cash working capital |
89,595 |
131,791 |
Production and Cost Performance |
Three months ended |
Three months ended |
|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
|
Peru |
Manitoba |
Total |
Peru |
Manitoba |
Total |
Contained metal in concentrate
produced1 |
|
|
|
|
|
|
|
Copper |
tonnes |
31,843 |
6,129 |
37,972 |
31,551 |
7,655 |
39,206 |
|
|
Gold |
oz |
5,357 |
20,205 |
25,562 |
5,418 |
25,675 |
31,093 |
|
|
Silver |
oz |
634,930 |
284,265 |
919,195 |
645,886 |
331,252 |
977,138 |
|
|
Zinc |
tonnes |
- |
28,037 |
28,037 |
- |
28,782 |
28,782 |
|
|
Molybdenum |
tonnes |
304 |
- |
304 |
64 |
- |
64 |
Payable metal in concentrate
sold |
|
|
|
|
|
|
|
|
Copper |
tonnes |
26,662 |
5,055 |
31,717 |
29,568 |
6,938 |
36,506 |
|
|
Gold |
oz |
6,218 |
16,411 |
22,629 |
4,907 |
21,150 |
26,057 |
|
|
Silver |
oz |
752,259 |
230,647 |
982,906 |
595,630 |
290,826 |
886,456 |
|
|
Zinc2 |
tonnes |
- |
22,954 |
22,954 |
- |
25,452 |
25,452 |
|
|
Molybdenum |
tonnes |
234 |
- |
234 |
137 |
- |
137 |
|
Cash
cost3 |
$/lb |
1.18 |
0.77 |
1.11 |
1.32 |
(0.38) |
0.98 |
Sustaining cash cost3 |
$/lb |
1.39 |
2.82 |
|
1.47 |
1.03 |
|
All-in sustaining cash cost3 |
$/lb |
|
|
1.81 |
|
|
1.46 |
1 Metal
reported in concentrate is prior to deductions associated with
smelter contract terms.2 Includes refined zinc metal sold and
payable zinc in concentrate sold.3 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 page 7 of this news release. |
Peru Operations Review
The Peru operations continued to perform well
with strong mill throughput, record copper recoveries and lower
unit and cash costs in the first quarter of 2019. During the
quarter, Constancia produced 31,843 tonnes of copper, 14,427 ounces
of precious metals and 304 tonnes of molybdenum. Hudbay expects to
meet production and cost guidance for Peru in 2019.
Ore mined at Constancia during the first quarter
of 2019 was 9% lower compared to the same period in 2018 due to
mining from areas with a higher stripping ratio than the areas
mined in the first quarter of 2018, in line with the mine plan.
Milled copper grades in the first quarter were approximately 8%
lower than the same period in 2018 as we continue to mine lower
grade phases, in line with the mine plan. Mill throughput in the
first quarter of 2019 was consistent compared to the same period in
2018.
Copper, gold and silver recoveries in the first
quarter of 2019 improved by 7%, 16% and 12%, respectively, compared
to the same period in 2018 as a result of several metallurgical
initiatives. While recoveries vary from quarter to quarter
depending on the complexity and grade of the ore feed, the company
is seeing results from recovery improvement initiatives. These
initiatives are part of key operational strategies that include
continuous improvement efforts targeting flotation operating
efficiencies (improvement at the washing station in column cells
and water distribution in the processing plant), and the
integration of an automated, advanced process control system in the
grinding and bulk flotation circuits.
Combined mine, mill and general and
administrative (“G&A”) unit operating costs in the first
quarter of 2019 were consistent with the same period in 2018.
Higher molybdenum costs were due to higher production and were
offset by lower administrative costs primarily driven by lower
community relations spending during the quarter.
Cash cost per pound of copper produced, net of
by-product credits, for the three months ended March 31, 2019 was
$1.18, decreasing by 11% from the same period in 2018. The decrease
in the quarter is primarily due to higher by-product credits and
lower administrative costs. Sustaining cash cost per pound of
copper produced, net of by-product credits, for the three months
ended March 31, 2019 was $1.39. This represents a decrease of 5%
from the same period in 2018, due to the same factors mentioned
above.
During the second quarter of 2019, a six-day
maintenance shutdown of the Constancia mill is planned. In addition
to regular semi-annual maintenance work, Hudbay plans to install
new equipment in support of efforts to optimize recoveries at
Constancia. Combined unit costs in the second quarter of 2019 are
expected to reflect correspondingly lower ore throughput and higher
maintenance costs. In addition, in line with the mine plan, mined
copper grades are expected to be lower than the annual average
during the second quarter of 2019, which is expected to affect
contained metal production and cash costs compared to other
quarters in 2019. The maintenance shutdown and the variations in
copper grade are consistent with the full year plan for Constancia,
and Hudbay continues to expect production and cost guidance to be
met for the full year 2019.
Manitoba Operations Review
The Manitoba operations reflect Lalor’s
achievement of 4,500 tonnes per day during the first quarter of
2019. During the quarter, the Manitoba operations produced 28,037
tonnes of zinc, 6,129 tonnes of copper and 24,266 ounces of
gold-equivalent precious metals. Copper, gold and silver were lower
compared to the same period in 2018 due to the closure of the Reed
mine, partially offset by increased production at 777 and Lalor.
Zinc production was slightly lower compared to the same period in
2018 due to lower zinc grades at 777, partially offset by higher
grades at Lalor. Precious metals production was also affected by
the stope sequencing of Lalor gold zone ores and the timing of
processing as this material is currently transported to the Flin
Flon mill and blended to achieve optimal recoveries. Full year
production for all metals is expected to be within guidance ranges
for Manitoba in 2019.
Ore mined at the Manitoba operations during the
first quarter of 2019 decreased by 5% compared to the same period
in 2018. This decrease is due to the closure of the Reed mine,
which was partially offset by higher production volumes at both 777
and Lalor. The higher production at 777 is attributable to improved
availability of the scoop and truck fleet, and a focus on
increasing the key performance indicators in the drilling, blasting
and backfilling processes. Higher production volume at Lalor was
due to having more mining fronts available and improvements to the
stope cycle time. Overall, copper, gold and silver grades were 18%,
8%, and 4% lower, respectively, in the first quarter of 2019
compared to the same period of 2018. Zinc grade was 15% higher in
the first quarter of 2019 compared to the same period of 2018.
Grade variances for copper reflect anticipated grade decline due to
the cessation of high-grade copper production from Reed following
its closure, while grade variances for zinc, gold and silver were
due to planned stope sequencing at 777 and Lalor.
Ore processed in Flin Flon in the first quarter
of 2019 was 26% lower than the same period in 2018. The lower
processing volumes are a result of the Reed mine closure, and
sustained improvements at the Stall concentrator resulting in less
ore transported to Flin Flon for processing, partially offset by
increased ore from the 777 mine. Ore processed at the Stall
concentrator was 16% higher, copper recoveries were 2% higher and
zinc recoveries were 2% lower in the first quarter of 2019 compared
with the same period in 2018, as a result of ongoing operational
and maintenance improvements.
Manitoba combined mine, mill and G&A unit
operating costs in the first quarter of 2019 were 6% higher than in
the same period in 2018 due mainly to the Reed closure and higher
mining costs at Lalor associated with the production ramp up. In
addition, combined unit costs were negatively impacted due to
transportation delays as excess ore from Lalor had to be
transported to Flin Flon for processing, causing mined ore to
exceed milled ore by 9% in the first quarter of 2019. The related
mining costs are included in combined unit costs in the first
quarter of 2019, while the excess ore inventory is expected to be
drawn down in the second quarter. Combined unit costs for Manitoba
are expected to be within the guidance range for the full year
2019.
Cash cost per pound of copper produced, net of
by-product credits, in the first quarter of 2019 was $0.77 per
pound of copper produced. These costs were higher compared to the
same period in 2018, primarily as a result of lower zinc and gold
by-product revenue. Sustaining cash cost per pound of copper
produced, net of by-product credits, in the first quarter of 2019
was $2.82, which is substantially higher than the prior year period
due to higher cash costs and increased capital development
expenditures at Lalor.
Pampacancha Developments
Negotiations with a local community to secure
surface rights over the Pampacancha deposit are progressing,
following the election of a new community council in the fourth
quarter of 2018. Hudbay is continuing to take a disciplined,
measured and patient approach to these negotiations, as this has
proven to be an effective way of engaging in previous instances and
is consistent with the company’s proven long-term strategy for
securing social license and developing its business in Peru. The
southern Peru copper mining corridor has seen heightened political
activity over the past several months; to date these activities
have not impacted operations at the Constancia mine.
During April 2019, the local community with whom
Hudbay is negotiating Pampacancha surface rights was added to a
list of communities designated as indigenous by the Ministry of
Culture for the purposes of Peru’s Consulta Previa law, which
implements Peru’s commitment to ILO Convention 169 consultation
requirements. As a result, once an agreement is reached with the
local community to acquire the surface rights, the Consulta Previa
law requires additional consultation between the Peruvian
government and the local community before work can begin.
As a result of this change, although Pampacancha
development activities may still be able to commence in 2019,
Hudbay expects that ore production at Pampacancha will not begin
until 2020 and has accordingly recognized an obligation to deliver
additional precious metal credits to Wheaton Precious Metals in
2020.
Rosemont Developments
Hudbay concluded the permitting process at
Rosemont in March 2019 with the receipt of the Section 404 Water
Permit from the U.S. Army Corps of Engineers and the Mine Plan of
Operations from the U.S. Forest Service. The company is now in a
position to proceed with development of the mine.
As part of the initial development plans,
Hudbay’s Board has approved an early works program with spending of
$122 million over and above the $20 million of Rosemont spending
previously included in 2019 growth capital expenditure guidance.
The early works program will be funded from cash on hand and is
part of Rosemont’s total project capital cost estimate of $1,921
million as disclosed in the National Instrument ("NI") 43-101
technical report for Rosemont dated March 30, 2017. Hudbay plans to
move ahead with early works and financing activities in parallel in
2019 and expects to seek Board approval to commence the
construction of Rosemont by the end of the year; this would enable
first production by the end of 2022.
On April 25, 2019, Hudbay completed the
previously announced acquisition of United Copper & Moly LLC’s
(“UCM”) 7.95% joint venture interest in Rosemont and paid UCM
initial cash consideration of $45 million. This provides Hudbay
with 100% ownership of Rosemont, allowing greater strategic
flexibility with respect to capital structure and project financing
alternatives. The company intends to evaluate a variety of options,
including the addition of a new, committed joint venture partner
for the development of Rosemont. Hudbay expects to carry out this
process in parallel with advancing the early works, with the
objective to ultimately hold an approximate 70% interest in the
project while maintaining operatorship.
On March 27, 2019, opponents of the Rosemont
project filed a further lawsuit against the U.S. Army Corps of
Engineers challenging, among other things, the issuance of the
Section 404 Water Permit in respect of Rosemont. This lawsuit is
one of several outstanding challenges against the Rosemont
permitting process and Hudbay is confident the permits will
continue to be upheld.
Snow Lake Exploration
Update
In February 2019, the company announced the
discovery of 1901 Zone, located between the former producing Chisel
North mine and Lalor mine. The discovery is situated less than
1,000 metres from an existing active underground ramp at a depth
ranging from 520 to 620 metres and within 15 kilometres of the
Stall concentrator.
The mineralization was first discovered in drill
hole CH1901 completed in February 2019 and is interpreted as a
volcanogenic massive sulphide deposit fed by a system of discrete
copper-gold rich feeder zones intersected during previous drilling.
Hudbay continues to delineate the deposit with several significant
intersections to-date. The zone remains characterized by high-grade
zinc with locally high-grade gold and silver content. The
mineralization occurs along the hanging wall contact of the
stratigraphic horizon hosting the Chisel North deposit.
The drill program continues from surface to
define the lateral extent of this new discovery and establish the
spatial continuity of the high-grade lenses located within the
mineralized zone. Based on drilling success, an underground
exploration platform may be developed later this year from the
Chisel-Lalor ramp in order to access and further define the
deposit. Hudbay expects to publish an initial resource estimate for
the 1901 Zone in the second half of 2019.
During the first quarter of 2019, the company
reported mineral resource estimates for other 100%-owned deposits
in the Snow Lake area, including the WIM, PEN II and New Britannia
mine properties. Drilling activities for metallurgical testing,
geotechnical investigations and engineering studies are underway at
all three of these deposits with the expectation to upgrade the
mineral resource estimates to mineral reserves with the 2019 annual
year-end reserve and resource update. For additional information,
please refer to the NI 43-101 technical report filed by Hudbay on
SEDAR on March 28, 2019.
The company also continues to advance
exploration activities at Lalor where drilling has confirmed the
extension of known high-grade lenses. Lalor in-mine exploration
drilling will continue throughout the year and is expected to be
incorporated in the annual mineral reserve and resource estimate at
the end of the year.
777 Mine Life Extension
The 777 mine life has been extended to the
second quarter of 2022, from the end of 2021, based on the most
recent estimate of mineral reserves. The Flin Flon mill and zinc
plant are also expected to continue operations until then.
Settlement Agreement with
Waterton
Hudbay and Waterton Precious Metals Fund II
Cayman, LP and Waterton Mining Parallel Fund Offshore Master, LP,
each of which are managed by Waterton Global Resource Management,
Inc., announced a settlement agreement on May 3, 2019 that will
result in the election of eleven nominees to Hudbay’s Board at the
annual and special meeting of shareholders. A copy of the
settlement agreement is available under Hudbay’s profile on
SEDAR.
Non-IFRS Financial Performance
Measures
Net debt is shown in this news release because
it is a performance measure used by the company to assess its
financial position. 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. Combined unit operating costs are
shown because the measures are used by the company as a key
performance indicator to assess the performance of its mining and
milling operations. 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. For
further details on these measures, including reconciliations to the
most comparable IFRS measures, please refer to page 30 of Hudbay’s
management’s discussion and analysis for the three months ended
March 31, 2019 available on SEDAR at www.sedar.com and EDGAR at
www.sec.gov.
Website Links
Hudbay:
www.hudbay.com
Management’s Discussion and Analysis:
http://www.hudbayminerals.com/files/doc_financials/2019/Q1/MDA191.pdf
Financial Statements:
http://www.hudbayminerals.com/files/doc_financials/2019/Q1/FS191.pdf
Conference Call and Webcast
Date: |
Tuesday, May 7, 2019 |
Time: |
8:00 a.m. ET |
Webcast: |
www.hudbay.com |
Dial in: |
647-794-1827 or
1-800-347-6311 |
Qualified Person
The technical and scientific information in this
news release related to the Constancia mine and Rosemont project
has been approved by Cashel Meagher, P. Geo, Hudbay’s Senior Vice
President and Chief Operating Officer. The technical and scientific
information related to the company’s other material mineral
projects contained in this news release has been approved by
Olivier Tavchandjian, P. Geo, Hudbay’s Vice-President Exploration
and Geology. Messrs. Meagher and Tavchandjian are qualified persons
pursuant to 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.sedar.com.
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, production, cost and capital and exploration
expenditure guidance, anticipated production at the company’s mines
and processing facilities, the expected benefits of implementing
the metallurgical recovery and optimization initiatives at
Constancia processing plant and expectations regarding the schedule
for acquiring the Pampacancha surface rights and mining the
Pampacancha deposit, the anticipated timing, cost and benefits of
developing the Rosemont project and any litigation challenging
Rosemont's permits, expectations regarding the financing,
sanctioning and schedule for developing the Rosemont project,
expectations regarding the Lalor gold strategy, including the
refurbishment of the New Britannia mill, the low costs of the
operation and the possibility of optimizing the value of the
company's gold resources in Manitoba, the future potential of Zone
1901, the possibility of converting inferred mineral resource
estimates to higher confidence categories, the potential and the
company’s anticipated plans for advancing its mining properties
surrounding Constancia and the Ann Mason project, anticipated mine
plans, anticipated metals prices and the anticipated sensitivity of
the company’s financial performance to metals prices, events that
may affect the 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
identified and were applied by the company in drawing conclusions
or making forecasts or projections set out in the forward-looking
information include, but are not limited to:
- the schedule for the refurbishment of the New Britannia
mill;
- the success of the Lalor gold strategy;
- successfully advancing the early works program and financing
plan for Rosemont;
- the ability to secure required land rights to develop and
commence mining the Pampacancha deposit;
- the success of mining, processing, exploration and development
activities;
- the scheduled maintenance and availability of the processing
facilities;
- the accuracy of geological, mining and metallurgical
estimates;
- anticipated metals prices and the costs of production;
- the supply and demand for metals the company produces;
- the supply and availability of all forms of energy and fuels at
reasonable prices;
- no significant unanticipated operational or technical
difficulties;
- the execution of Hudbay’s business and growth strategies,
including the success of its strategic investments and
initiatives;
- the availability of additional financing, if needed;
- the ability to complete project targets on time and on budget
and other events that may affect the company’s ability to develop
its projects;
- the timing and receipt of various regulatory and governmental
approvals;
- the availability of personnel for the exploration, development
and operational projects and ongoing employee relations;
- maintaining good relations with the communities in which the
company operates, including the communities surrounding the
Constancia mine and Rosemont project and First Nations communities
surrounding the Lalor mine;
- no significant unanticipated challenges with stakeholders at
the company’s various projects;
- no significant unanticipated events or changes relating to
regulatory, environmental, health and safety matters;
- no contests over title to the company’s properties, including
as a result of rights or claimed rights of aboriginal peoples;
- the timing and possible outcome of pending litigation and no
significant unanticipated litigation;
- certain tax matters, including, but not limited to current tax
laws and regulations and the refund of certain value added taxes
from the Canadian and Peruvian governments; and
- no significant and continuing adverse changes in general
economic conditions or conditions in the financial markets
(including commodity prices and foreign exchange rates).
The risks, uncertainties, contingencies and
other factors that may cause actual results to differ materially
from those expressed or implied by the forward-looking information
may include, but are not limited to, risks generally associated
with the mining industry, such as economic factors (including
future commodity prices, currency fluctuations, energy prices and
general cost escalation), uncertainties related to the development
and operation of the company’s projects (including risks associated
with the permitting, development and economics of the Rosemont
project and related legal challenges), risks related to the new
Lalor mine plan, including the schedule for the refurbishment of
the New Britannia mill and the ability to convert inferred mineral
resource estimates to higher confidence categories, risks related
to the schedule for mining the Pampacancha deposit (including the
timing and cost of acquiring the required surface rights and the
impact of any schedule delays), dependence on key personnel and
employee and union relations, risks related to political or social
unrest or change, risks in respect of aboriginal and community
relations, rights and title claims, operational risks and hazards,
including 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 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 Hudbay’s most recent Annual
Information Form.
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 an integrated mining
company primarily producing copper concentrate (containing copper,
gold and silver), molybdenum concentrate and zinc metal. With
assets in North and South America, the company is focused on the
discovery, production and marketing of base and precious metals.
Directly and through its subsidiaries, Hudbay owns three
polymetallic mines, four ore concentrators and a zinc production
facility in northern Manitoba and Saskatchewan (Canada) and Cusco
(Peru), and copper projects in Arizona and Nevada (United States).
The company’s growth strategy is focused on the exploration and
development of properties it already controls, as well as other
mineral assets it may acquire that fit its strategic criteria.
Hudbay’s vision is to be a responsible, top-tier operator of
long-life, low-cost mines in the Americas. Hudbay’s mission is to
create sustainable value through the acquisition, development and
operation of high-quality, long-life deposits with exploration
potential in jurisdictions that support responsible mining, and to
see the regions and communities in which the company operates
benefit from its presence. The company is governed by the Canada
Business Corporations Act and its shares are listed under the
symbol "HBM" on the Toronto Stock Exchange, New York Stock Exchange
and Bolsa de Valores de Lima. Further information about Hudbay can
be found on www.hudbay.com.
For further information, please contact:
Candace BrûléDirector, Investor Relations(416)
814-4387candace.brule@hudbay.com
1 Cash cost, all-in sustaining cash cost and net debt are
non-IFRS financial performance measures with no standardized
definition under IFRS. For further information, please see page 7
of this news release.
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