CAUTIONARY INFORMATION

Transcription

1 Q P r e s e n t a t i o n November 1, 2018

2 CAUTIONARY INFORMATION This presentation contains forward-looking information within the meaning of applicable Canadian and United States securities legislation. All information contained in this presentation, 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 presentation 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 Hudbay s mines and processing facilities, the expected benefits of implementing the metallurgical recovery initiatives at the Constancia processing plant, the anticipated timing, cost and benefits of developing the Rosemont project and the Pampacancha deposit, the anticipated impact of any delays to the start of mining the Pampacancha deposit, the anticipated results of litigation challenging the Rosemont permitting process, anticipated exploration and development plans, including the exploration and development strategy for the Lalor gold zones, the possible refurbishment of the New Britannia mill and the possibility of optimizing the value of the company s gold resources in Manitoba, the possibility of converting inferred and historical mineral resource estimates to higher confidence categories, the potential and Hudbay s anticipated plans for 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 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 we identified and were applied by us in drawing conclusions or making forecasts or projections set out in the forward-looking information include, but are not limited to: the anticipated results of the planned technical and economic studies on the Lalor gold zone and New Britannia mill; the successful completion of the Mason transaction; 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, governmental and joint venture partner approvals; the availability of personnel for the exploration, development and operational projects and ongoing employee relations; the ability to secure required land rights to develop the Pampacancha deposit; 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 exploration and development program at Lalor, including the ability to establish a business case for the refurbishment of the New Britannia mill and convert inferred and historical mineral resource estimates to higher confidence categories, risks related to the maturing nature of the 777 mine and its impact on the related Flin Flon metallurgical complex, dependence on key personnel and employee and union relations, 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), 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 presentation or to explain any material difference between subsequent actual events and any forward-looking information, except as required by applicable law. This presentation 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. This presentation contains certain financial measures which are not recognized under IFRS, such as net debt, cash cost and sustaining cash cost, net of by-product credits, per pound of copper produced. For further details on how Hudbay calculates these measures in respect of its operating assets, please refer to page 30 of Hudbay s management s discussion and analysis for the three and nine months ended September 30, 2018 available on SEDAR at and EDGAR at All amounts are in U.S. dollars unless otherwise noted. 2

3 STRONG Q3 RESULTS EXECUTED WELL AGAINST OUR STRATEGIC PRIORITIES CONTINUED TO FOCUS ON DEVELOPING AND OPERATING OUR PORTFOLIO OF HIGH-QUALITY ASSETS IN SAFE JURISDICTIONS: Demonstrated ongoing progress in optimizing Constancia by generating record mill throughput and record copper recoveries Delivered solid results from the Manitoba business and believe the optimal processing scenario for Lalor gold and copper-gold zones is to refurbish the New Britannia gold mill Positioned to move into construction of Rosemont soon after permitting is complete ANNOUNCED TRANSACTION TO ACQUIRE 100% OF MASON RESOURCES Ownership of a deposit in a mining friendly jurisdiction that is similar in scale to Constancia and Rosemont, at a cost of less than half of 2018 exploration budget Strongly accretive to resources per share, at a minimal cost Driving value creation and adding to the company s high quality project pipeline SOLID PRODUCTION AND EARNINGS; LOW COSTS 3

4 Q CONSOLIDATED RESULTS KEY RESULTS SUMMARY Consolidated production of copper-equivalent contained metal in concentrate of 59.3 kt Consolidated cash cost of $0.88/lb Cu and sustaining cash cost of $1.43/lb Cu, both decreased from Q Net profit of $22.8 million, or $0.09 per share Operating cash flow 1 of $122 million Production 2 Q Q Copper kt Zinc kt Precious Metals 3 koz Copper-Eq 4 kt Cash Cost 5 $lb/ Cu $0.88 $0.96 All-in Sustaining Cash cost $lb/ Cu $1.43 $1.48 EPS Reported $/sh $0.09 $0.09 Operating cash flow $m $122 $132 Cash $m $460 $ Operating cash flow before change in non-cash working capital. 2. Contained metal in concentrate. 3. Includes gold and silver production on a gold-equivalent basis. Silver converted to gold at a ratio of 70:1. 4. Production on a copper-equivalent basis is calculated by converting contained metal in concentrate produced using LME average prices. 5. Cash cost and all-in sustaining cash cost per pound of copper produced, net of by-product credits. All-in sustaining cash cost includes sustaining capital expenditures, capitalized exploration, royalties and corporate G&A. Net Debt $m $516 $536 Liquidity $m $878 $859 4

5 GROWING FREE CASH FLOW & REDUCING DEBT Continued to grow free cash flow through un-hedged production and stable low-cost operations Reduced net debt position by more than $700 million since 2016 OPERATING AND FREE CASH FLOW 1 ($M) NET DEBT 2 ($M) Operating Cash Flow Free Cash Flow Net Debt ,228 1,168 1,105 1,085 1, Q1/16 LTM Q2/16 LTM Q3/16 LTM 2016 Q1/17 LTM Q2/17 LTM Q3/17 LTM 2017 Q1/18 LTM Q2/18 LTM Q3/18 LTM Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Note: LTM = Last Twelve Months. 1. Operating cash flow is operating cash flow before change in non-cash working capital. Free cash flow calculated as operating cash flow less sustaining capital expenditures and less interest paid. 2. Net debt calculated as total long-term debt less cash and cash equivalents. Net debt is a non-ifrs financial performance measure with no standardized definition under IFRS. For further information and a detailed reconciliation, please refer to Hudbay s management s discussion and analysis for the three and nine months ended September 30,

6 PERU OPERATIONS REVIEW PERU SUMMARY OPERATING STATISTICS Copper production of 33kt, an increase quarter-over-quarter primarily due to record mill throughput and record recoveries Copper recoveries reached record levels in Q as a result of several metallurgical initiatives intended to improve recoveries Combined unit operating costs decreased compared to Q given higher mill throughput and recoveries Production results to date on track to meet 2018 guidance Pampacancha negotiations ongoing Q Q Ore mined (million tonnes) Ore milled (million tonnes) Copper grade milled 0.48% 0.44% Gold grade milled (g/t) Silver grade milled (g/t) Copper recovery 85.0% 79.7% Gold recovery 51.1% 44.8% Silver recovery 70.3% 61.2% Copper contained in conc. (kt) Precious metals contained in conc. (koz) Combined unit operating costs ($/tonne) 3 $8.68 $10.33 Cash cost ($/lb) 4 $1.22 $ Reported tonnes for ore mined are based on mine plan assumptions and may not reconcile fully to ore milled. 2. Precious metals production includes gold and silver production on a gold-equivalent basis. Silver is converted to gold at a 70:1 ratio. 3. Reflects combined mine, mill and G&A costs per tonne of ore milled. Unit costs reflect the deduction of expected capitalized stripping costs. 4. Cash cost and sustaining cash cost per pound of copper produced, net of by-product credits. Sustaining cash cost ($/lb) 4 $1.38 $1.82 6

7 EXPEDITED TIMELINE FROM FIRST PRODUCTION TO FULL CAPACITY Constancia s timeline from feasibility to first production and the subsequent ramp-up to nameplate capacity production was the fastest among recently built projects TIME FROM FIRST PRODUCTION TO FULL CAPACITY OPERATIONS (MONTHS) Constancia Las Bambas Ministro Hales Sierra Gorda Antucoya Toromocho Mt. Milligan Red Chris Boleo Caserones Source: SNL, Wood Mackenzie, public filings and BMO Capital Markets report In 2018, It s All About Cobre Panama dated January 11, Full capacity date as disclosed by the producing company (when available) Boleo and Caserones have not achieved full capacity. 7

8 Mill Throughput (ktpd) Processing Utilization (%) Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Copper Production (kt) Copper Head Grades (%) CONTINUOUS IMPROVEMENT AT CONSTANCIA Constancia throughput and processing plant utilization have improved since first production was achieved at the end of 2014 Quarterly copper production remains robust even as copper head grades decline in accordance with the mine plan CONSTANCIA S QUARTERLY COPPER PRODUCTION AND COPPER HEAD GRADES % 0.63% 0.62% 0.62% 0.61% 0.57% 0.58% 0.54% 0.53% 0.54% 0.49% 0.50% 0.48% 0.44% 0.44% % 0.70% 0.60% 0.50% 0.40% 0.30% 0.20% 0.10% 0.00% CONSTANCIA S ANNUAL THROUGHPUT AND PROCESSING PLANT UTILIZATION % 90% 95% 76% % 80% 60% 40% 20% % 8

9 Constancia Caserones Toromocho Chapada Cerro Verde Antapaccay Cuajone Los Bronces Alumbrera Carmen de Andacollo Candelaria Los Pelambres Chuquicamata Antamina Radomiro Tomic Centinela Mina Ministro Hales Las Bambas Sierra Gorda Salobo Operating Costs 1 (US$/t Milled) INDUSTRY LEADING COST PERFORMANCE Constancia is the lowest cost copper mine in South America Continuous operational improvements at Constancia have driven costs down, while increasing efficiencies and productivity LOWEST COST OPEN PIT COPPER MINES IN SOUTH AMERICA (2018E) $20.00 $18.00 $16.00 $14.00 $12.00 $10.00 $8.00 $8.89 $9.22 $9.74 $10.28 $10.43 $11.07 $11.63 $11.98 $12.24 $19.01 $16.67 $17.00 $17.73 $15.63 $16.14 $14.35 $14.63 $14.68 $14.71 $13.13 $6.00 $4.00 $2.00 $ forecasted operating costs include mining, processing and general and administrative expenditures on a per tonne bas is. Source: Wood Mackenzie (Q dataset; primary copper, open pit sulphide mines in South America). Wood Mackenzie s costing methodology may be different than the methodology reported by Hudbay or its peers in their public disclosure. For details regarding Hudbay s costs, refer to Hudbay s management discussion and analysis for the three and nine months ended September 30,

10 PERU COMMUNITY RELATIONS We work with all levels of government and the communities to develop stable operations and to maximize the impact of our social investment in our area of influence and beyond Since 2012, executed over 90 social agreements with local governments and communities Pleased with progress on Pampacancha negotiations to date Exploration work to be conducted on newly acquired properties near Constancia with potential to provide higher-grade feed to the Constancia mill post-pampacancha Recently entered into agreement with Quehuincha in respect of Kusiorcco target MINERAL PROPERTIES WITHIN TRUCKING DISTANCE OF CONSTANCIA PROCESSING FACILITY 10

11 MANITOBA OPERATIONS REVIEW Manitoba Summary Operating Statistics Ore mined decreased versus Q2 2018; increased production at the 777 mine was offset by decreased production at the Lalor and Reed mines Combined unit operating costs increased slightly compared to Q2 2018, mainly due to maintenance expenditures and decreased throughput Cash cost, net of by-product credits, increased from Q due to decreased copper production Sustaining cash cost, net of by-product credits, increased from Q as the lower cash cost was more than offset by higher sustaining capital expenditures Q Q Ore mined (kt) Ore milled (kt) Copper grade milled 1.32% 1.56% Zinc grade milled 4.73% 4.85% Gold grade milled (g/t) Silver grade milled (g/t) Copper recovery 90.6% 91.5% Zinc recovery 88.6% 90.3% Gold recovery 60.2% 60.2% Silver recovery 60.1% 60.8% Copper contained in conc. (kt) Zinc contained in conc. (kt) Precious metals contained in conc. (koz) 1, Combined unit operating costs ($/tonne) 3 $ $ Cash cost ($/lb) 4 $(0.61) $(0.71) 1. Reported tonnes for ore mined are based on mine plan assumptions and may not reconcile fully to ore milled. 2. Precious metals production includes gold and silver production on a gold-equivalent basis. Silver is converted to gold at a 70:1 ratio. 3. Reflects combined mine, mill and G&A costs per tonne of ore milled. Unit costs reflect the deduction of expected capitalized stripping costs. 4. Cash cost and sustaining cash cost per pound of copper produced, net of by-product credits. Sustaining cash cost ($/lb) 4 $1.23 $

12 MANITOBA COMMUNITY RELATIONS LONG HISTORY OF MINING IN MANITOBA Discovered, mined and reclaimed mines in Manitoba over the past 90 years Reed closure activities proceeding ahead of schedule and under budget, with reclamation continuing in 2019 REED PORTAL POLISHING POND DURING PRODUCTION 2 MONTHS AFTER LAST ORE 12

13 CU-AU AND AU RICH LENSES AT LALOR: FOUNDATION OF HUDBAY S GOLD STRATEGY IN MANITOBA Test Zone in Lens 25 New model of Lens 27 BASE METAL LENSES Mineral Reserves Base Metal Zones (kt) Au (g/t) Ag (g/t) Cu (%) Zn (%) Proven & Probable 10, Mineral Resource Base Metal Zones (kt) Au (g/t) Ag (g/t) Cu (%) Zn (%) Measured & Indicated 2, COPPER-GOLD LENSES + GOLD LENSES Mineral Reserves Gold-Copper Zones (kt) Au (g/t) Ag (g/t) Cu (%) Proven & Probable 2, Mineral Resource Gold-Copper Zones (kt) Au (g/t) Ag (g/t) Cu (%) Measured & Indicated 1, Inferred Using a 4.1% zinc equivalency cutoff Inferred 4, Using a 2.4 g/t gold equivalency cutoff Over the past 12 months, we focused on infill drilling and test mining the Au rich Lens 25 and remodeling the Cu-Au rich Lens 27 In parallel, we have continued to advance the permit modifications of the New Britannia mill and a regional Au exploration program For additional detail on the Lalor mineral reserves and mineral resources, see Hudbay s 2017 Annual Information Form dated March 29, 2018 and Hudbay s NI Technical Report, Lalor Mine, Snow Lake, Manitoba, Canada dated March 30, 2017, available on 13

14 STRATEGY: MAXIMIZE NPV PROCESS ALL CU-AU ORE THROUGH NEW BRITANNIA MILL Trade-off studies have been completed and Hudbay believes the refurbishment of the New Britannia mill is the optimal processing scenario for the Lalor gold and copper-gold zones The New Britannia mill refurbishment would increase gold production at Lalor substantially and provide enhanced optionality to create value: Additional resources and exploration potential from nearby satellite deposits Gold exploration potential of the Snow Lake belt (historical resources at New Britannia Mine and the WIM deposit) 14

15 SIGNIFICANT EXPLORATION POTENTIAL CU-AU MINERALIZATION BETWEEN CHISEL AND LALOR Area of high conductivity Photo Lalor South Bulls Eye Chisel CH1807 and 1.2g/tAu) Chisel Deep 600 metres Red dots are %Cu+g/t Au >=3 Between Lalor and the old Chisel mine, several potential copper and gold occurrences beneath the existing ramp will be drilled this winter These Cu-Au occurrences may represent the classic pathways to VMS deposits (either to the previously mined Chisel deposit or to another deposit since then eroded) Chisel Deep (1,200m depth): CH1807 intersected 2.7% Cu, 1.2g/t Au, still 600m away from center of conductivity (large EM plate) South Bull s eye (600m depth): Potential for low tonnage but high Cu-Au grade 15

16 SIGNIFICANT EXPLORATION POTENTIAL AU AND CU MINERALIZED OCCURRENCES IN THE SNOW LAKE BELT Hudbay has a large prospective land package in the Snow Lake belt with significant gold exploration potential Data compilation and modeling over the past producing areas of the New Britannia mine lead to the development of a genetic model for the emplacement of gold mineralization Geochemical sampling and geophysical surveys conducted in high priority areas in Q will be used to define drill targets to be tested during the winter 16

17 ROSEMONT PROJECT High-quality development project with well-established infrastructure March demonstrates robust project economics 19 year mine life generating 15.5% after-tax project IRR and 17.7% IRR to Hudbay at $3.00/lb Cu Years 1-10 avg. annual production of 140,000 tons (127,000 metric tonnes) Cu at a cash cost of $1.14/lb Permitting and community engagement progressing Positioned to move into construction soon after permitting is complete PROJECT ECONOMICS 1 HUDBAY NPV 8% $769m $719m NPV 10% $496m $499m IRR (after-tax) 15.5% 17.7% Payback period 5.2 years 4.9 years Location Tucson, Arizona Ownership 80% 2 Type of deposit Processing End products Copper-molybdenum skarn deposit On-site processing plant Copper and molybdenum concentrates Avg. LOM Strip Ratio 2.0 Avg. LOM annual Cu production 3 Avg. LOM Unit operating cost 4 Avg. LOM Cash cost per lb Cu 5 112kt $7.92/t $1.29/lb Avg. LOM Annual sustaining capital 6 $61m Avg. LOM Sustaining cash cost 7 $1.65/lb Current mine life 19 years Note: Tons or t on this page refer to short tons, not metric tonnes, unless otherwise noted. LOM = Life of Mine. As per NI Technical Report on the Rosemont Project dated March 30, Economic analysis assumes $3.00/lb Cu, $11.00/lb Mo, and precious metal streaming price of $3.90/oz Ag, subject to 1% annual inflation adjustment after three years. Hudbay basis adjusts for joint venture partner expected payments to earn into their minority interest and outstanding joint venture loan owed to Hudbay. 2. Hudbay s ownership in the Rosemont project is subject to an earn-in agreement with United Copper & Moly LLC ( UCM ), a Korean consortium, pursuant to which UCM has earned a 7.95% interest in the project and may earn up to a 20% interest. 3. Production is contained metal in concentrate. 4. Combined mine, mill and G&A unit operating costs per tonne of ore processed (after impact of capitalized stripping). 5. Net of by-products. Includes impact of precious metal stream. Metal prices per the precious metals stream agreement are as follows: $3.90/oz Ag, $450/oz Au. Other metal price assumptions are as follows: $3.00/lb Cu, $11.00/lb Mo, $18/oz Ag. 6. Sustaining capital includes capitalized stripping costs. 7. Sustaining cash cost per pound copper produced, includes sustaining capital costs and royalties. 17

18 ROSEMONT TIMELINE KEY MILESTONES Granted six permits for Rosemont since Huday s acquisition of the project, including the Final Record of Decision issued by the U.S. Forest Service Successfully defended five lawsuits related to Rosemont permits Issued updated Technical Report with improved resource and reserve availability; continue to de-risk project in advance of construction Hudbay Acquires the Rosemont Project (July) Court upholds ADEQ's issuance of Aquifer Protection Permit (Nov.) 28,384 metres of drilling completed ADEQ Construction Stormwater General Permit issued (July) ADEQ 401 Certification issued (February) 22,910 metres of drilling completed Arizona Superior Court determines that County's Outdoor Lighting Code does not apply to Rosemont, enabling Hudbay to continue to add appropriate lighting installations to preserve the safety of site operations (May) ADEQ and Rosemont successfully defend air permit through litigation (July) Hudbay issues an updated technical report with improved resource and reserve availability (March) U. S. Forest Service Final Record of Decision issued (June) Pima County Flood Control District Permit renewed (June) ADEQ 401 Certification Amendment issued (Nov.) Arizona State Land Department Utility Rights of Way issued (Nov.) Court agrees with ADEQ and Rosemont in County's attempted appeal of 401 Certification (January) Arizona Department of Transportation Encroachment Permit issued (March) Pima County Department of Environmental Quality Air Activity Permit issued (March) ADEQ Class II Air Permit renewed (April) ONLY ONE KEY PERMIT OUTSTANDING: U.S. ARMY CORPS OF ENGINEERS 404 PERMIT MINE PLAN OF OPERATIONS PENDING U.S. FOREST SERVICE APPROVAL Note: ADWR = Arizona Department of Water Resources; ADEQ = Arizona Department of Environmental Quality; SSSR = Save the Scenic Santa Ritas; FICO = Farmers Investment Co.; FOIA = Freedom of Information Act 18

19 ROSEMONT INITIAL CAPEX & FUNDING INITIAL CAPITAL COST ESTIMATE OF $1.9 BILLION 3-year construction period; $144 million in year 1, $861 million in year 2, $768 million in year 3, remaining capital in ramp-up period ~5% growth and 15% contingency added per item ROSEMONT INITIAL CAPITAL COST BREAKDOWN $ million ($M) 2500 Site wide $42 Mining $474 Process plant $ $1,921 $230 $200 $106 $277 Site services & utilities $22 $1,108 Internal infrastructure $ External infrastructure $114 Common construction facilities $ EPCM services $107 Owner s cost $313 Total initial capital $1,921 0 Total initial capital Stream upfront payment Proposed equipment financing Joint venture earn-in payment Joint venture share of remaining capital Hudbay's share of capital HUDBAY S SHARE OF CAPITAL IS APPROXIMATELY $1.1 BILLION 19

20 CONSISTENT STRATEGY SINCE 2010 VISION STATEMENT Our vision is to become a top-tier operator of long-life, low cost mines in the Americas VALUE DRIVERS STRATEGIC CRITERIA Safety & Responsibility Long Life Meaningful Scale Low Cost Exploration Financial Strength Mine Development Per Share Accretion Copper Focus Mining Friendly Jurisdictions 20

21 OVERVIEW OF ANN MASON Ann Mason is located approximately 85km southeast of Reno, Nevada in the prolific Yerington Copper District Close to the former producing Yerrington mine (1.7B lbs of copper produced) Ann Mason hosts a measured and indicated copper sulphide resource of 1.4Bt grading 0.32% Cu plus inferred sulphide resource of 0.6Bt grading 0.29% Cu Additional inferred resources at the Blue Hill target of 72Mt grading 0.17% Cu (oxide) and 50Mt grading 0.23% Cu (sulphide) Significant exploration potential Ann Mason remains open in several directions High-grade regional skarn targets to increase grades early in the mine life Several un-tested IP anomalies Potential for additional oxide material Excellent infrastructure in place Road access to the property with nearby rail and power Recently secured an option to purchase 8,168 ac ft of water ANN MASON NEVADA, USA Reno Ann Mason Elko Las Vegas BLOCK MODEL ANN MASON RESOURCE ESTIMATE CATEGORY ORE Grade Contained Metal (MT) Cu (%) Au (g/t) Ag (g/t) Mo (%) Cu (Mt) Au (Moz) Ag (Moz) M&I 1, Inferred Mo (Mt) See technical report dated March 3, 2017 and filed on sedar by Mason Resources 21

22 STRATEGIC RATIONALE OF ANN MASON The acquisition of Ann Mason is an excellent fit with Hudbay s strategic criteria Hudbay has been a 14% shareholder of Mason since August 2017 and has followed the project closely for the past several years MEANINGFUL SCALE Adding one of the largest undeveloped copper porphyry resources in North America for less than one third of Hudbay s 2018 exploration budget COPPER FOCUS Immediately increases Hudbay s M&I resources by 4.5Mt of copper and inferred resources by 2.0Mt of copper PER SHARE ACCRETION LONG LIFE AND LOW COST MINING FRIENDLY JURISDICTION Highly accretive transaction on a resource per share basis Paying ~0.2 cents per pound of contained M&I copper equivalent Resource size and grade is similar to Constancia and Rosemont with the potential for a long life and low cost operation Nevada ranked 3rd overall on the Fraser Institute s 2017 Investment Attractiveness Index DEVELOPMENT PIPELINE Adds a significant asset to Hudbay s development pipeline to follow after Rosemont Will be one of Hudbay s high priority exploration projects MANAGEMENT CAPABILITIES Leverages management s expertise to drill and build through exploration and project development Early-stage ownership allows us to apply our expertise in exploration, engineering, permitting, and construction to optimize the project s value 22

23 Measured + Indicated (solid) and Inferred (dotted) Contained Copper (Mt) Measured + Indicated Copper Grade (%) SCARCITY VALUE OF ANN MASON Ann Mason is one of the largest undeveloped copper resources in Hudbay s preferred jurisdictions The 3 rd largest actionable resource held within a junior company A high priority exploration project to target near-surface, high-grade mineralization Acquiring a high quality resource in a safe jurisdiction that is similar in scale to Constancia and Rosemont for an enterprise value of approximately $15M compared to our 2018 exploration budget of $50M Ann Mason is a PEA-staged project in Nevada with potential to be developed after Rosemont Hudbay will conduct exploration and advance technical studies without rushing into a development decision Numerous opportunities to enhance the project s value under Hudbay s stewardship LARGEST UNDEVELOPED GREENFIELD COPPER DEPOSITS IN HUDBAY S JURISDICTIONS % Major Junior Hudbay 3.00% % % % % 1.00% % 0.39% 0.51% 0.58% 0.38% 0.55% 0.59% 0.32% 0.57% 0.38% 0.37% 0.26% 0.18% 0.48% 0.37% 0.45% 0.42% 0.25% 0.28% 0.50% Pebble Resolution La Granja NuevaUnion Quellaveco Twin Metals Los Helados West Wall Rio Blanco Ann Mason Haquira Polo Sur Vizcachitas Schaft Creek Casino Galeno Rosemont Canariaco Norte Northern Dynasty Rio Tinto Rio Tinto Teck Anglo American Antofagasta NGEx Resources Glencore Zijin Mason Resources First Quantum 1. Hudbay s jurisdictions of interest are Canada, USA, Chile and Peru. Source: S&P Global Market Intelligence, company filings and Hudbay s latest reserve and resource update Antofagasta Los Andes Copper Teck Western Copper and China Minmetals Hudbay Minerals Candente Copper Trapiche Harper Creek Constancia Minas Yellowhead Buenaventura Mining Hudbay Minerals 0.00% 23

24 Copper Equivalent (Mt) Copper Equivalent (Mt) Copper Equivalent (Mt) ADDING VALUE THROUGH EXPLORATION CONSTANCIA ( ) ( ) 1 LALOR ( ) Reserves Production 1.5 Reserves Production 1.0 Reserves Production % Growth % Growth % Growth Reserve at Bid Date 2 Production to Date + Current Reserve CONSTANCIA COPPER PRODUCTION PROFILE 3 Contained Copper in Concentrate (kt) IPO Reserve Production to Date + Current Reserve Norsemont Bid Reserve (Norsemont 2009 Technical Report) Actuals and 2018 Technical Report (Hudbay) Initial Reserve Production to Date + Current Reserve Source: Company disclosure. Production calculated as tonnes mined multiplied by grades mined (i.e. assumes 100% recovery). The following metals price assumptions were applied to reserves for purposes of calculating copper equivalent: $3.00/lb Cu, $1.00/lb Zn, $1,260/oz Au and $18.00/oz Ag. Does not include impact of precious metal streams, as applicable. 2. Constancia reserve at bid date from NI Definitive Feasibility Study Technical Report on the Constancia mine filed by Norsemont Mining, dated September 28, Source: Grey bars from NI Technical Report on the Constancia mine filed by Norsemont Mining, dated September 28, 2009; assumes first year of production starting in Yellow bars are actual Constancia production for years ; years from NI Technical Report on the Constancia Mine dated March 29,

25 PROJECT PIPELINE Hudbay has a diversified portfolio of operating mines and an extensive development pipeline to perpetuate production growth Production Constancia Lalor 777 Shovel-ready Development Rosemont Pampacancha Resource Definition / Feasibility / Exploration / Initial Resource Ann Mason Constancia Regional Targets Peru and Chile Greenfield Targets Lalor Cu-Au Manitoba Regional Targets B.C. Earn-ins Junior Toeholds 25

26 INVESTMENT HIGHLIGHTS Constancia & Exploration Peru Lalor, 777 & Exploration Manitoba, Canada Exploration British Columbia, Canada TSX, NYSE, BVL Symbol HBM Rosemont Arizona, USA Ann Mason Nevada, USA Market Capitalization 1 C$1.3 billion Shares Outstanding 261 million Exploration Chile Available Liquidity 2 $0.88 billion DIVERSIFIED COPPER PRODUCER Strong cash flow generation from un-hedged copper and zinc production Portfolio of long-life, low-cost assets in mining friendly jurisdictions in the Americas Relevant scale with meaningful growth profile Proven drill and build value creation strategy Debt Outstanding 3 $1.0 billion Broad range of management experience and technical skill to deliver on plan 1. Based on Hudbay s TSX closing share price on October 31, Liquidity including cash balances as of September 30, Total long-term debt outstanding as at September 30,

27 ADDITIONAL INFORMATION The scientific and technical information related to the Lalor mine contained in this presentation has been approved by Olivier Tavchandjian, P.Geo., our VP Exploration and Geology. Mr. Tavchandjian is a qualified person pursuant to NI Information on the data verification performed on the exploration data related to the Lalor gold zone is contained in Hudbay s most recently filed annual information form, dated March 29, 2018, and the current technical report for Lalor, dated March 30, 2017, each of which is filed on SEDAR at Quality Assurance/Quality Control procedures for the Lalor exploration program include the systematic insertion of blanks, standards and duplicates into the core sample strings. The results of the control samples are evaluated on a regular basis with batches and are re-analysed and/or resubmitted as needed. There are no drilling, sampling, recovery or other factors that could materially affect the accuracy or reliability of the preliminary results. The estimated mineral reserves and mineral resources for Lalor are as at January 1, The mineral resources are exclusive of mineral reserves and do not have demonstrated economic viability. For a description of the key assumptions, parameters and methods used to estimate mineral reserves and resources, as well as data verification procedures and a general discussion of the extent to which the estimates may be affected by any known environmental, permitting, legal title, taxation, sociopolitical, marketing or other relevant factors, please see the most recent Lalor Technical Report, dated March 30, 2017, and filed by us on SEDAR at Table 1 below provides a summary of the drill results discussed in this presentation TABLE 1: LALOR TO CHISEL DRILL RESULTS Hole-ID From To Length Au_GPT Ag_GPT Cu% Zn% Cu+Au Easting Northing Elevation True-Width Azimuth at Intercept Dip at Intercept Core Size CH NQ CH NQ CH NQ CH NQ CH NQ CH NQ CH NQ CH BQ LUX BQ LUX BQ CH NQ 1. True widths are estimated based on drill angle and interpreted geometry of mineralization. 2. Location is mid-point of intercepts (UTM NAD83), elevation is reported above mean sea level 3. All gold, silver, zinc and copper values are uncut. 27

28 REGIONAL GOLD AND COPPER-GOLD DEPOSITS: HISTORICAL RESOURCES New Britannia Mine and Squall Lake deposits MEASURED AND INDICATED RESOURCES INFERRED RESOURCES Historic Resource Statement (Alexis Minerals) Tonnes (000) Grade (g/t) Au (oz 000) Main Mine Lower1 (measured) Main Mine Upper2 (indicated) 3, Main Mine Lower1 (indicated) 1, No. 3 Zone Main2 (indicated) No. 3 Zone Footwall (indicated) Total 5, Tonnes (000) Grade (g/t) Au (oz 000) Main Mine Upper Main Mine Lower No. 3 Zone - Main No. 3 Zone Footwall Birch Squall Margaret Upper Squall Margaret Lower Total 2, For additional information, refer to the technical report dated December 10, 2010 filed by Alexis Mineral Corporation on SEDAR at WIM deposit Historic Resource Statement (Alexandria Minerals Corporation) WIM DEPOSIT MINERAL RESOURCES (EFFECTIVE DATE MAY 14, 2015) Cutoff Cu Eq % Tonnes (000) Cu (%) Zn (%) Au (g/t) Ag (g/t) Cu (lbs 000) Zn (lbs 000) Au (oz 000) Ag (oz 000) 0.6 Open Pit , Underground 3, ,588 22, Total Indicated 3, ,156 22, Open Pit , East ,912 5, West Total Inferred ,616 5, For additional information, refer to the technical report dated June 25, 2015 filed by Alexandria Minerals Corporation on SEDAR at Cautionary Information re: Historical Estimates The mineral resource estimates for the New Britannia, Squall Lake and Wim deposits that have been included in this presentation are historical estimates within the meaning of NI , and Hudbay is not treading such estimates as current mineral resources, as a qualified person has not performed sufficient work for Hudbay to classify the historical estimates as current mineral resources. In parallel with its work on a new technical report for Lalor, Hudbay plans to carry out the work required to verify the relevance and reliability of the historical estimates, including verification of the data, assumptions, parameters and methods used to estimate the mineral resources. 28

29 FOR MORE INFORMAT I O N C O N TAC T: Carla Nawrocki, Director, Investor Relations carla.nawrocki@hudbay.com