Hudbay Minerals Inc. (“Hudbay” or the “company”)
(TSX, NYSE: HBM) today provided an update
on the status of its operations and business preparedness plans in
light of the COVID-19 coronavirus pandemic. The company has been
closely monitoring the status of the virus outbreak and the rapidly
changing environment at all of its operations. Company-wide
business preparedness plans were activated earlier this month as
part of the company’s crisis management protocols. In response to
the challenging environment in Peru following the Peruvian
government’s recent declaration of a state of emergency, the
company has commenced a temporary and orderly shutdown of
operations at Constancia, as described in more detail below.
“It is an uncertain time, but we remain vigilant
and ready to respond to the ever-changing environment to ensure we
protect all of our stakeholders and the continuity of our
business,” said Peter Kukielski, Hudbay’s President and Chief
Executive Officer.
The Peruvian government declared a state of
emergency on March 15th requiring non-essential businesses to be
shut down for 15 days, and subsequently clarified that mining
operations could continue in certain circumstances during this
period. The company has been actively managing the situation and
the Constancia mine continued to operate, and concentrate
transportation activities continued this week, including a vessel
that completed loading yesterday at the port of Matarani. However,
the state of emergency has rapidly changed the environment, causing
the manufacturing and transport of critical supplies to be
suspended. As such, with the limited availability of certain
critical mining supplies, the company has initiated a temporary and
orderly shutdown of operations at Constancia. The shutdown process
is expected to continue over the next three days. A smaller
workforce will be maintained to oversee critical aspects of the
operation, with the overarching goal of facilitating a quick and
efficient ramp up back to normal levels once the regional situation
improves. The Constancia team continues to be focused on the health
and safety of its workforce and to actively engage with local
stakeholders to ensure effective implementation of the business
preparedness plan. The company also expects the government
processes related to Consulta Previa and permitting applications to
be deferred during this state of emergency.
In Manitoba, Hudbay’s mines continue to operate
and ship concentrate and zinc metal. At this point, Manitoba
remains a low-risk jurisdiction with no known cases of COVID-19 in
northern Manitoba. However, the Manitoba team is actively managing
the evolving situation and implementing the business preparedness
plan, including planning activities in the event the company needs
to reduce or cease operations or construction activities in the
future.
Hudbay continues to prudently manage its
liquidity position and currently has more than $300 million in cash
and cash equivalents. The company proactively amended its credit
facilities in February 2020 to provide additional near-term
flexibility and is evaluating a variety of liquidity and capital
spending options if the current environment persists. The company
has the ability to defer a majority of its 2020 growth capital
expenditures at Pampacancha and the New Britannia gold mill and
will continue to monitor the macro-environment and adjust its
spending programs as necessary.
Hudbay’s business preparedness planning is
overseen by its crisis management teams, both at the corporate
level and the business unit level, and it addresses the evaluation,
coordination, communication and implementation of these plans. The
company’s preparedness planning addresses business continuity and
contingency planning for operational disruptions and is reinforced
by daily executive committee meetings, frequent employee
communication with regular updates, and close monitoring of
employee health status together with increased screening by site
medical teams. Plans include recommendations from local health
authorities, such as travel restrictions, promoting social
distancing and increased hygiene practices, implementing
self-isolation practices and increased sanitization of offices and
employee common areas.
Forward-Looking Information
This news release contains forward-looking
information within the meaning of applicable Canadian and United
States securities legislation. Forward-looking information
includes, but is not limited to, expectations regarding the impact
of the COVID-19 coronavirus outbreak on the company’s operations
and financial performance, the impact and duration of the planned
shutdown of operations in Peru, and the ability for the company to
manage its financial and liquidity position. 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 expected timing
for Peru to lift its state of emergency, the availability of
spending reductions and liquidity options and the expected impact
of the COVID-19 coronavirus.
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), risks associated with the COVID 19
coronavirus, the political situation in Peru, 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.
About Hudbay
Hudbay (TSX, NYSE: HBM) is a diversified mining
company primarily producing copper concentrate (containing copper,
gold and silver) and zinc metal. 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, development, operation and
optimization 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 investor and media inquiries, please
contact:
Candace BrûléDirector, Investor Relations
(416) 814-4387 candace.brule@hudbay.com
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