Hudbay Minerals Inc. (“Hudbay” or the “company”) (TSX,
NYSE:HBM) today released its third quarter 2019 financial
results. All amounts are in U.S. dollars, unless otherwise noted.
“In the third quarter, Hudbay continued to
deliver solid operating results with record quarterly mill
throughput at Constancia and strong cost performance in both Peru
and Manitoba,” said Peter Kukielski, Interim President and Chief
Executive Officer. “Constancia continues to operate at full
capacity despite regional logistical challenges during the quarter
and we are proud of the team’s ability to adapt and overcome these
external issues. Manitoba continues to maximize production from the
777 mine and the New Britannia mill refurbishment remains on
schedule for completion in late 2021. At Rosemont, we intend to
appeal the recent court decision as we evaluate next steps for the
project. We are on track to achieve our full year production
guidance and we look forward to advancing the various organic
growth opportunities within our portfolio.”
Cash generated from operating activities
decreased to $43.5 million in the third quarter of 2019 from $113.8
million in the same quarter of 2018. Operating cash flow before
change in non-cash working capital was $69.9 million during the
third quarter of 2019, reflecting a decrease of $52.2 million
compared to the third quarter of 2018. The decrease in operating
cash flow is primarily the result of lower realized prices and
sales volumes compared to the third quarter of 2018. Sales volumes
in the third quarter of 2019 reflected the temporary buildup of
copper concentrate inventory in Peru as a result of previously
disclosed community protests against another company's mining
project that restricted access to the port of Matarani in July and
August. However, Constancia continued to operate at full capacity
during this period and the team actively managed concentrate
logistics to overcome these challenges, resulting in only slightly
elevated concentrate inventory levels as of September 30, 2019.
Copper-equivalent production in the third quarter of 2019 decreased
by 2% compared to the same period in 2018, primarily as a result of
lower grades at Constancia, as planned, and the closure of the Reed
mine.
Net loss and loss per share in the third quarter
of 2019 were $274.8 million and $1.05, respectively, compared to a
net profit and earnings per share of $22.8 million and $0.09,
respectively, in the third quarter of 2018.
Net loss and loss per share in the third quarter
of 2019 were affected by, among other things, the following
items:
|
Pre-tax gain (loss) |
|
After-tax gain (loss) |
|
Per share gain (loss) |
|
|
($ millions) |
($ millions) |
|
($/share) |
|
|
|
|
|
|
|
|
Rosemont impairment |
(322.2 |
) |
|
(242.1 |
) |
|
(0.93 |
) |
|
Non-cash deferred tax
adjustments |
— |
|
|
(2.2 |
) |
|
(0.01 |
) |
|
Dividend withholding
tax |
— |
|
|
(6.9 |
) |
|
(0.03 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
On July 31, 2019, the U.S District Court for the
District of Arizona ("Court") issued a ruling in the lawsuits
challenging the U.S. Forest Service's issuance of the Final Record
of Decision ("FROD") for the Rosemont project in Arizona. The
Court ruled to vacate and remand the FROD thereby delaying the
expected start of construction of Rosemont. Although Hudbay intends
on appealing the Court's decision, the July 31st ruling and the
subsequent impact to the company's market capitalization gave rise
to an indicator of impairment. Following an impairment test
conducted as of September 30, 2019, it was determined that the
recoverable amount of the Arizona cash generating unit was lower
than its carrying value, causing the company to recognize an
after-tax impairment loss of $242.1 million related to these
assets.
During the third quarter of 2019, Hudbay
incurred $6.9 million in withholding tax associated with the
repatriation of $137.5 million by way of an intercompany dividend.
Cash and cash equivalents decreased from $489.5 million at June 30,
2019 to $398.4 million at September 30, 2019, due to seasonally
elevated sustaining capital expenditures and interest payments on
long-term debt.
In the third quarter of 2019, consolidated cash
cost per pound of copper produced, net of by-product credits1, was
$0.98, an increase compared to $0.88 in the same period last year.
This increase was a result of lower copper and precious metal
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 produced, net of by-product credits1,
in the third quarter of 2019 was $1.90, which increased from $1.45
in the same period last year, driven mainly by increased sustaining
capital expenditures.
_______________1 Cash cost, all-in sustaining
cash cost per pound of copper produced, net of by-product credits,
and net debt are non-IFRS financial performance measures with no
standardized definition under IFRS. For further information, please
see page 8 of this new release.
Financial Condition ($000s) |
Sep. 30, 2019 |
Dec. 31, 2018 |
Cash
and cash equivalents |
398,438 |
515,497 |
Total long-term
debt |
976,272 |
981,030 |
Net debt1 |
577,834 |
465,533 |
Working capital |
367,856 |
445,228 |
Total assets |
4,386,546 |
4,685,635 |
Equity |
1,857,481 |
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 8 of this news release.
Financial Performance |
Three months ended |
Nine months ended |
($000s except per share and cash cost amounts) |
Sep. 30 |
Sep. 30 |
|
2019 |
2018 |
2019 |
2018 |
Revenue |
291,282 |
|
362,649 |
912,953 |
|
1,120,593 |
Cost of sales |
260,327 |
|
277,367 |
787,045 |
|
822,079 |
Profit before tax (loss) |
(348,367 |
) |
30,287 |
(410,409 |
) |
153,187 |
Profit (loss) |
(274,796 |
) |
22,808 |
(342,355 |
) |
88,926 |
Basic and diluted (loss) earnings per share |
(1.05 |
) |
0.09 |
(1.31 |
) |
0.34 |
Operating cash flow before change in non-cash working capital |
69,910 |
|
122,097 |
240,649 |
|
385,524 |
|
|
|
|
|
|
|
Production and Cost Performance |
Three months ended |
Three months ended |
|
Sep. 30, 2019 |
Sep. 30, 2018 |
|
Peru |
Manitoba |
Total |
Peru |
Manitoba |
Total |
Contained metal in concentrate produced1 |
|
|
|
|
|
Copper |
tonnes |
31,091 |
5,331 |
|
36,422 |
32,976 |
7,506 |
|
40,482 |
Gold |
oz |
5,565 |
22,754 |
|
28,319 |
6,059 |
22,199 |
|
28,258 |
Silver |
oz |
686,258 |
237,933 |
|
924,191 |
736,657 |
274,330 |
|
1,010,987 |
Zinc |
tonnes |
— |
28,639 |
|
28,639 |
— |
26,228 |
|
26,228 |
Molybdenum |
Tonnes |
262 |
— |
|
262 |
370 |
— |
|
370 |
Payable metal in concentrate sold |
|
|
|
|
|
|
Copper |
tonnes |
25,314 |
4,602 |
|
29,916 |
30,222 |
9,376 |
|
39,598 |
Gold |
oz |
3,858 |
21,630 |
|
25,488 |
4,486 |
26,996 |
|
31,482 |
Silver |
oz |
529,139 |
227,157 |
|
756,296 |
548,782 |
338,131 |
|
886,913 |
Zinc2 |
tonnes |
— |
29,140 |
|
29,140 |
— |
30,969 |
|
30,969 |
Molybdenum |
tonnes |
334 |
— |
|
334 |
237 |
— |
|
237 |
|
Cash cost3 |
$/lb |
1.26 |
(0.68 |
) |
0.98 |
1.22 |
(0.61 |
) |
0.88 |
Sustaining cash cost3 |
$/lb |
1.73 |
2.40 |
|
|
1.38 |
1.23 |
|
|
All-in sustaining cash cost3 |
$/lb |
|
|
1.90 |
|
|
1.45 |
|
Nine months ended |
Nine months ended |
|
Sep. 30, 2019 |
Sep. 30, 2018 |
|
Peru |
Manitoba |
Total |
Peru |
Manitoba |
Total |
Contained metal in concentrate produced1 |
|
|
|
|
|
Copper |
tonnes |
87,166 |
17,591 |
|
104,757 |
91,344 |
25,968 |
|
117,312 |
Gold |
oz |
14,716 |
67,264 |
|
81,980 |
16,667 |
75,164 |
|
91,831 |
Silver |
oz |
1,872,995 |
782,198 |
|
2,655,193 |
1,979,112 |
960,673 |
|
2,939,785 |
Zinc |
tonnes |
— |
88,514 |
|
88,514 |
— |
88,180 |
|
88,180 |
Molybdenum |
tonnes |
900 |
— |
|
900 |
575 |
— |
|
575 |
Payable metal in concentrate sold |
|
|
|
|
|
|
Copper |
tonnes |
77,754 |
17,050 |
|
94,804 |
85,197 |
26,376 |
|
111,573 |
Gold |
oz |
14,132 |
64,523 |
|
78,655 |
13,158 |
74,078 |
|
87,236 |
Silver |
oz |
1,785,657 |
757,846 |
|
2,543,503 |
1,582,944 |
879,909 |
|
2,462,853 |
Zinc2 |
tonnes |
— |
76,318 |
|
76,318 |
— |
84,589 |
|
84,589 |
Molybdenum |
tonnes |
987 |
— |
|
987 |
372 |
— |
|
372 |
|
Cash cost3 |
$/lb |
1.33 |
0.01 |
|
1.11 |
1.38 |
(0.58 |
) |
0.94 |
Sustaining cash cost3 |
$/lb |
1.71 |
2.46 |
|
|
1.54 |
0.82 |
|
|
All-in sustaining cash cost3 |
$/lb |
|
|
1.98 |
|
|
1.47 |
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 8 of this news release. |
|
Peru Operations Review
During the quarter, the Constancia mine produced
31,091 tonnes of copper, 15,369 ounces of precious metals and 262
tonnes of molybdenum. Production results were lower than the same
period last year mainly due to lower copper grades, mined and
milled, as per the mine plan, partially offset by record mill
throughput and higher copper recoveries from recent metallurgical
initiatives. However, production results were higher than the
second quarter of 2019 due to higher grades, increased recoveries
and record quarterly mill throughput. Hudbay expects production of
all metals and costs at Constancia to be in line with the full year
guidance for 2019.
Ore mined at the Constancia mine during the
third quarter of 2019 was 4% lower compared to the same period in
2018 due to mining from areas with a higher stripping ratio than
the areas mined in the third quarter of 2018, in line with the mine
plan. Milled copper grades in the third quarter were approximately
8% lower than the same period in 2018 as lower grade phases
continue to be mined, in line with the mine plan. Mill throughput
in the third quarter of 2019 was 2% higher compared to the same
period in 2018, a quarterly throughput record, due to higher plant
availability through the continued successful implementation of
optimization initiatives.
Copper recoveries in the third quarter of 2019
improved by 1% compared to the same period in 2018. The increased
copper recoveries were a result of sustained metallurgical
improvements initiated in 2018. While recoveries vary from quarter
to quarter depending on the complexity and grade of the ore feed,
the company is seeing results from ongoing recovery optimization
initiatives. Highlights of the initiatives include the continued
integration of an automated, advanced process control system in the
grinding and bulk flotation circuits, and flotation improvements
such as optimizing the water recovery in the tailings thickener and
the installation of enhanced equipment in the rougher circuit.
Year-to-date mill throughput, copper grades and
copper recoveries are achieving mine plan expectations for
2019.
Combined mine, mill and general and
administrative (“G&A”) unit operating costs in the third
quarter of 2019 were slightly lower than the same period in 2018,
reflecting higher ore throughput and lower expensed stripping costs
(higher capitalized stripping), offset by higher mine, plant and
administrative costs. Due to our focus on cost control and
throughput optimization initiatives, combined unit costs in the
third quarter of 2019 were the lowest quarterly unit costs reported
in the past eight quarters.
During the fourth quarter of 2019, a four-day
regularly scheduled maintenance shutdown of the Constancia mill is
planned, and production and combined unit costs in the fourth
quarter of 2019 are expected to reflect correspondingly lower ore
throughput. In addition to regular semi-annual maintenance work,
Hudbay plans to install new equipment relating to the ongoing
throughput and recovery optimization initiatives at Constancia. The
maintenance shutdown is consistent with the full year plan for
Constancia, and the company continues to expect production and cost
guidance to be met for the full year 2019.
Cash cost per pound of copper produced, net of
by-product credits, for the third quarter of 2019 was $1.26,
slightly higher than the same period in 2018 due to lower copper
production as per the mine plan, partially offset by higher
by-product credits. Sustaining cash cost per pound of copper
produced, net of by-product credits, was $1.73 in the third quarter
of 2019. This represents an increase of 25% from the same period in
2018, due to timing of payments on long-term community agreements
and leases, as well as higher sustaining costs in heavy civil works
and capitalized stripping costs.
The southern Peru copper mining corridor
continued to see heightened political activity around other
companies’ mining projects and operations during the quarter. This
included large protests against the granting of a permit for
another company’s mining project. These protests blocked the
entrance to the port of Matarani in July and August, and, while
unrelated to Constancia, they impacted the company’s ability to
ship copper concentrates. Constancia continued to operate at full
capacity during this period and the team actively managed
concentrate logistics to overcome these challenges, drawing down
inventory levels at a higher rate than normal once access to the
port was restored. As a result, concentrate inventory levels
remained only slightly elevated at September 30, 2019. Since the
end of October, these protests have reinitiated but haven’t
affected access to the port of Matarani. Hudbay will continue to
monitor the situation and actively manage logistics around any
potential impacts.
Manitoba Operations Review
Ore mined at the Manitoba operations during the
third quarter of 2019 increased by 4% compared to the same period
in 2018. This increase is due to higher production volumes at both
777 and Lalor, partially offset by the closure of the Reed mine in
August 2018. The combined Manitoba operations produced 28,639
tonnes of zinc, 5,331 tonnes of copper and 26,153 ounces of
gold-equivalent precious metals. Total copper and silver production
were 29% and 13% lower, respectively, compared to the same period
in 2018 due to the closure of Reed mine, partially offset by
increased production at 777 and Lalor. Gold production was
consistent over the period, while zinc production increased by 9%.
Full year production of all metals is expected to be within the
annual guidance ranges.
Overall, copper, zinc, and silver grades were
21%, 3%, and 10%, lower, respectively, in the third quarter of 2019
compared to the same period of 2018 while gold grades were 4%
higher. Lower copper grades reflect the cessation of high-grade
copper production from Reed following its closure, while grade
variances for zinc and silver were due to planned stope sequencing
based on life of mine production schedules at 777 and Lalor.
Ore mined at 777 in the third quarter of 2019
increased by 9%, compared to the same period last year. The higher
production is attributable to implementation of management systems
designed to improve mobile equipment availability and key
performance indicators for drilling, blasting and backfilling
processes. Ore mined at Lalor in the third quarter of 2019
increased by 23% compared to the same period last year. The higher
production is attributable to a number of initiatives implemented
as part of the production ramp up to 4,500 tonnes per day,
including mine design changes, contract strategies, asset integrity
and work management programs.
Ore processed in Flin Flon in the third quarter
of 2019 was consistent with the same period of 2018 as the Reed
mine closure in August 2018 was offset by increased production from
the 777 mine and zinc ore feed from Lalor. Copper, gold and silver
recoveries in the third quarter of 2019 were 4%, 8%, and 22% lower,
respectively, compared with the same period in 2018 due to lower
head grades. Zinc recoveries were 6% higher quarter-over-quarter.
The Stall concentrator ore throughput was 9% higher than the same
period in 2018 due to ongoing operational and maintenance
improvements.
Manitoba combined mine, mill and G&A unit
operating costs in the third quarter of 2019 were 6% higher than in
the same period in 2018 mainly due to the Reed closure and higher
mining costs at 777 and Lalor. However, combined unit costs have
been trending lower following Lalor’s ramp up, with third quarter
unit costs well below the levels reported in the first half of
2019. Manitoba combined unit costs are expected to be at or
slightly above the upper range of guidance for the full year
2019.
Cash cost per pound of copper produced, net of
by-product credits, in the third quarter of 2019 was negative
$0.68. These costs were lower compared to the same period in 2018,
primarily as a result of lower treatment, refining and freight
costs and higher by-product credits on a per pound of copper basis.
Sustaining cash cost per pound of copper produced, net of
by-product credits, in the third quarter of 2019 was $2.40, which
is higher than the prior year period due to increased capital
development expenditures at Lalor and lower copper production.
Copper produced in the third quarter of 2019 was 29% lower than the
same quarter in 2018 as a result of the closure of Reed mine,
partially offset by increased production at 777 and Lalor.
Appointment of Chair of the Board of
Directors
On October 3, 2019, Stephen A. Lang was
appointed as Chair of Hudbay's Board of Directors. Mr. Lang has
over 40 years of experience in the mining industry, including
engineering, development and production at gold, copper, coal and
platinum group metals operations. In connection with the
appointment, Alan Hibben has stepped down as Chair of Hudbay's
Board of Directors.
The Board continues to advance its search for a
permanent CEO, which includes internal and external candidates.
Peter Kukielski was appointed Interim CEO on July 10, 2019 after
Alan Hair stepped down as Hudbay's President and CEO and as a
director of the company.
Rosemont Developments
On July 31, 2019, the Court issued a ruling in
the lawsuits challenging the U.S. Forest Service’s issuance of the
FROD for the Rosemont project in Arizona. The Court ruled to vacate
and remand the FROD such that Rosemont cannot proceed with
construction at this time. Hudbay strongly believes that the Court
has misinterpreted federal mining laws and Forest Service
regulations as they apply to Rosemont. As such, the company filed a
motion for reconsideration of certain issues in the Court's
decision, which has since been denied. Hudbay intends to appeal the
Court's decision to the U.S. Ninth Circuit Court of Appeals as the
company evaluates next steps for the project. The company has
deferred the previously announced process to identify a joint
venture partner for Rosemont.
As announced in August, Hudbay has suspended
most of its early works activities at Rosemont and, at that time,
expected a decrease of its Rosemont project capital spending in
2019 to $30 million. The company now expects Rosemont project
spending to further be reduced to $20 million in 2019, including
costs to demobilize engineering work and complete committed
procurement. These costs are in addition to $20 million of Rosemont
non-project costs that are expected to be incurred in 2019, for a
total of $40 million expected to be spent at Rosemont in 2019.
Other Key Strategic
Initiatives
Hudbay continues to advance discussions with the
community of Chilloroya on a land access agreement for the
Pampacancha satellite deposit. The discussions are progressing and
the company expects to be mining ore at Pampacancha in 2020.
New Britannia mill refurbishment activities are
progressing in line with the development schedule laid out in the
February 2019 mine plan. Detailed engineering is on track to be
completed in the first quarter of 2020 and environmental permits
are expected in the second quarter of 2020. Construction activities
are expected to commence mid-2020 and continue until the third
quarter of 2021, with plant commissioning and ramp-up during the
fourth quarter of 2021. Once the New Britannia mill is
commissioned, average annual gold production from Snow Lake is
expected to be approximately 140,000 ounces during the first five
years at a sustaining cash cost, net of by-product credits, of
approximately $450 per ounce of gold.
Exploration activities on the regional deposits
in Snow Lake continue to progress, including feasibility studies on
the recently discovered 1901 Deposit, which contains an initial
inferred resource of 2.1 million tonnes at 9.67% zinc, as announced
in August 2019. Drilling on the 1901 Deposit continues to test the
size of the deposit, with the intention to confirm the presence of
gold and copper-gold mineralization and upgrade the mineral
resource estimate to a higher category. Exploration and engineering
studies are also progressing at Lalor in-mine exploration targets
and other 100%-owned deposits in the Snow Lake area, with results
expected to be incorporated in the annual mineral reserve and
resource estimate in March 2020.
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 31 of Hudbay’s
management’s discussion and analysis for the three and nine months
ended September 30, 2019 available on SEDAR at www.sedar.com.
Website Links
Hudbay:
www.hudbay.com
Management’s Discussion and Analysis:
http://www.hudbayminerals.com/files/doc_financials/2019/Q3/MDA193.pdf
Financial Statements:
http://www.hudbayminerals.com/files/doc_financials/2019/Q3/FS193.pdf
Conference Call and Webcast
Date: |
Tuesday, November 12, 2019 |
Time: |
10:00 a.m. ET |
Webcast: |
http://services.choruscall.ca/links/hudbay20191112.html |
Dial in: |
1-416-915-3293 or
1-800-319-4610 |
|
|
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, expectations regarding the company's CEO
transition, 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 the outcome of litigation challenging Rosemont's
permits, the company’s intention to appeal the recent U.S. district
court decision overturning the U.S. Forest Service's FROD for
Rosemont and to evaluate other options available to advance the
project, expectations regarding the Lalor gold strategy, including
the refurbishment of the New Britannia mill, and the possibility of
optimizing the value of the gold resources in Manitoba, the future
potential of the 1901 deposit, including the possibility of
identifying additional gold resources, 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:
- Hudbay’s ability to appeal the U.S.
district court’s decision setting aside the U.S. Forest Service’s
FROD for Rosemont;
- the availability of other options
to advance Rosemont notwithstanding the U.S. district court’s
recent decision;
- the ability to continue to access
the Port of Matarani and ship Constancia copper concentrate
production in the ordinary course of business;
- 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 company’s processing facilities;
- the accuracy of geological, mining
and metallurgical estimates;
- anticipated metals prices and the
costs of production;
- the supply and demand for metals
the company produces;
- the supply and availability of all
forms of energy and fuels at reasonable prices;
- no significant unanticipated
operational or technical difficulties;
- the execution of the company’s
business and growth strategies, including the success of its
strategic investments and initiatives;
- the availability of additional
financing, if needed;
- the 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 or challenges to the validity of the
company’s unpatented mining claims;
- the timing and possible outcome of
pending litigation and no significant unanticipated
litigation;
- certain tax matters, including, but
not limited to current tax laws and regulations 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), the appointment of a permanent CEO and
any changes related thereto, uncertainties related to the
development and operation of the company’s projects (including
risks associated with the permitting, development and financing of
the Rosemont project), risks related to the U.S. district court's
recent decision to set aside the U.S. Forest Service's FROD for
Rosemont and other legal challenges related to Rosemont's permits,
risks related to the new Lalor mine plan, including the schedule
and cost 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 the cost of maintaining
and upgrading the company’s tailings management facilities and any
unanticipated environmental, industrial and geological events, 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 the
company’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. The company 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
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