Hudbay Minerals Inc. (“Hudbay” or the “company”) (TSX,
NYSE: HBM) today released its fourth quarter and full year
2023 financial results, and announced 2024 annual production and
cost guidance. All amounts are in U.S. dollars, unless otherwise
noted. All production and cost amounts reflect the Copper Mountain
mine on a 100% basis, with Hudbay owning a 75% interest in the
mine.
Delivering Record Fourth Quarter and
Full Year Operating and Financial Results
- Achieved record quarterly and annual revenue of $602.2 million
and $1,690.0 million, respectively, with strong consolidated copper
production of 45,450 tonnes and record consolidated gold production
of 112,776 ounces in the fourth quarter from continued higher
grades at the Pampacancha deposit in Peru and the Lalor mine in
Manitoba and the contributions of the newly acquired Copper
Mountain mine in British Columbia.
- Delivered a significant increase in operating cash flow before
change in non-cash working capital to $246.5 million in the fourth
quarter, a 35% increase compared to $182.0 million in the third
quarter, which was meaningfully higher than prior quarters.
- Achieved 2023 consolidated production guidance for all metals.
Full year 2023 copper production of 131,691 tonnes, gold production
of 310,429 ounces and silver production of 3,575,234 ounces
increased by 26%, 41% and 13%, respectively, compared to 2022.
- Consolidated 2023 cash costi and sustaining cash costi were
better than expected and significantly outperformed the 2023
guidance range. Full year 2023 consolidated cash cost and
sustaining cash cost per pound of copper produced, net of
by-product creditsi, were $0.80 and $1.72, respectively, increasing
by 7% and 17%, respectively, compared to 2022.
- Consolidated cash cost and sustaining cash cost per pound of
copper produced, net of by-product creditsi, in the fourth quarter,
were $0.16 and $1.09, respectively, improving by 85% and 42%,
respectively, compared to the third quarter of 2023.
- Peru operations benefited from continued higher grades at the
Pampacancha satellite pit, resulting in 33,207 tonnes of copper
production and 49,418 ounces of gold production in the fourth
quarter. Full year copper production was within 2023 guidance
ranges while gold production exceeded the top end of guidance. Peru
cash cost per pound of copper produced, net of by-product creditsi,
in the fourth quarter improved to $0.54, and full year cash costs
significantly improved over 2022 levels and achieved the low end of
the 2023 annual cost guidance range.
- Manitoba operations produced 59,863 ounces of gold in the
fourth quarter, a quarterly record as higher gold and copper grade
zones were mined at Lalor and the New Britannia mill processed
significantly higher amounts of gold ore. Full year gold production
was well within the 2023 guidance range and exceeded recent
expectations of being positioned at the lower end of the range.
Manitoba cash cost per ounce of gold produced, net of by-product
creditsi, was $434 during the fourth quarter and full year cash
costs were within the 2023 annual guidance range.
- British Columbia operations produced 8,508 tonnes of copper at
a cash cost per pound of copper produced, net of by-product
creditsi, of $2.67 in the fourth quarter. Full year production and
cash costs were within Hudbay's post-acquisition guidance ranges.
Operational stabilization plans continue to be implemented at the
Copper Mountain mine with a focus on opening additional mining
faces, optimizing ore feed to the plant and improving plant
reliability.
- Fourth quarter net earnings and earnings per share were $33.5
million and $0.10, respectively. After adjusting for a non-cash
loss of $34.0 million related to a quarterly revaluation of a
closed site environmental reclamation provision and a non-cash
revaluation loss of $9.0 million related to the gold prepayment
liability, among other items, fourth quarter adjusted earningsi per
share were $0.20.
- Cash and cash equivalents increased by $4.6 million to $249.8
million during the fourth quarter due to strong operating cash
flows bolstered by higher copper and gold prices and sales volumes
enabling a $94.5 million reduction in net debti during the
quarter.
Strong Operating Performance Driving
Free Cash Flow Generation with Continued Financial
Discipline
- Executed on planned higher production levels and achieved
continued operating and capital cost efficiencies to generate
significant free cash flow in the fourth quarter.
- Achieved adjusted EBITDAi of $274.4 million in the fourth
quarter, the highest quarterly level over the last five years and a
44% increase from the previous recent high in the third quarter of
2023.
- Completed $90 million in debt repayments during the fourth
quarter with a $30 million net reduction in the company’s revolving
credit facility balance and a $59.7 million redemption of the
remaining Copper Mountain bonds, well ahead of the 2026 maturity to
increase financial flexibility and lower financing costs.
Deleveraging efforts continued into the first quarter of 2024 with
an additional $10 million repayment of the company’s revolving
credit facility balance in January 2024.
- Increased cash and total liquidity by $34.1 million to $573.7
million compared to the end of the third quarter. Net debti reduced
to approximately $1,038 million during the fourth quarter, which
together with higher levels of adjusted EBITDA, improved the net
debt to adjusted EBITDA ratioi to 1.6x compared to 2.0x at the end
of 2022.
- Delivered annual discretionary spending reduction targets for
2023 with lower growth capital and exploration expenditures
compared to 2022. As a result of a continued focus on discretionary
spending reductions, total capital expenditures for 2023 (excluding
Copper Mountain) of approximately $243 million were $57 million
lower than original guidance levels, a further decrease from the
$30 million in reductions announced in the third quarter.
Executing on Growth
Initiatives
- Post-acquisition plans to stabilize the Copper Mountain
operations are underway with a focus on mining fleet ramp-up
activities, accelerated stripping and increasing mill reliability.
Achieved the targeted $10 million in annualized corporate synergies
as of January 2024.
- Released a NI 43-101 technical report for the Copper Mountain
mine in December 2023, which contemplates average annual copper
production of 46,500 tonnes in the first five years, 45,000 tonnes
in the first ten years and 37,000 tonnes over the 21-year mine
life. Average cash costs and sustaining cash costs over the mine
life are expected to be $1.84 and $2.53 per pound of copperi,
respectively. Several opportunities to further increase production,
improve costs and extend mine life are being evaluated for future
mine plans.
- Achieved record copper recoveries of 87.4% at the Constancia
mill in the fourth quarter of 2023 as a result of the successful
completion of the recovery improvement program in the second
quarter, on time and on budget.
- Achieved higher copper recoveries above 90% and gold recoveries
above 65% at the Stall mill in the second half of 2023 because of
the successful ramp up of the Stall mill recovery improvement
project in the second quarter, on time and on budget.
- The New Britannia mill achieved record throughput levels
averaging 1,650 tonnes per day in 2023 and 1,800 tonnes per day in
the fourth quarter, exceeding its original design capacity of 1,500
tonnes per day due to the successful implementation of process
improvement initiatives.
- Commenced largest annual exploration program in Snow Lake
consisting of geophysical surveys and drill campaigns testing the
newly acquired Cook Lake claims, former Rockcliff properties and
near-mine exploration at Lalor.
- Advancing a development and exploration drift at the 1901
deposit in Snow Lake, located within 1,000 metres from the
underground ramp access to the Lalor mine, with a focus on
confirming the optimal mining method for the base metal and gold
lenses and converting the inferred mineral resources in the gold
lenses to mineral reserves.
- Continuing to evaluate the Flin Flon tailings reprocessing
opportunity through advancing metallurgical test work studies and
analyzing metallurgical technologies.
"We had a strong end to the year with increased
copper production, record gold production and record financial
performance in the fourth quarter, resulting in the successful
achievement of our annual guidance metrics,” said Peter Kukielski,
President and Chief Executive Officer. “2023 was a year of
execution and delivery as we realized the higher grades in Peru,
achieved record gold production in Manitoba and enhanced our
operating base with the addition of the Copper Mountain mine. We
continued to demonstrate financial discipline in 2023 through
reduced discretionary spending to drive free cash flow generation
and debt reduction. These 2023 achievements are a testament to our
outstanding team, which continues to deliver the plan while always
operating safely and efficiently. Our commitment to continued
financial discipline, together with our resilient operating
platform, will allow us to prudently advance and unlock value from
our leading organic pipeline of brownfield expansion and greenfield
exploration and development opportunities.”
2024 Annual Guidance and
Outlook
- Consolidated copper production is forecast to increase by 19%
to 156,500 tonnesii in 2024, compared to 2023, with continued
higher grades in Peru and a full year of British Columbia
production.
- Consolidated gold production is forecast to decrease slightly
to 291,000 ouncesii in 2024, compared to 2023, due to higher than
planned gold grades being mined in Peru in the fourth quarter of
2023 and a deferral of high grade gold zones in Peru to 2025. Total
gold production in Peru over the 2023 to 2025 period is expected to
be higher than previous guidance levelsii.
- Consolidated cash cost, net of by-product creditsi, in 2024 is
expected to be within a range of $1.05 and $1.25 per pound of
copper, higher than 2023 as a result of lower gold by-product
credits and a full year of contributions from British
Columbia.
- Total capital expenditures are expected to be $335 million in
2024, reflecting lower expenditures in Peru, Manitoba and Arizona,
offset by higher expenditures in British Columbia associated with
accelerated stripping to access higher grades and a
reclassification of costs from operating to capitalized stripping
versus the recent technical report.
- Exploration expenditures are expected to increase in 2024 as
the company executes its largest-ever exploration program in the
Snow Lake region, which is being partially funded by a critical
minerals premium flow-through financing that was completed in the
fourth quarter.
- Continued focus on reducing discretionary spending in 2024 with
total growth capital expenditures 23% lower than 2023.
Summary of Fourth Quarter
Results
Consolidated copper production in the fourth
quarter of 2023 was 45,450 tonnes, an 8% increase from the third
quarter of 2023, while consolidated gold production was 112,776
ounces, an 11% increase, and consolidated silver production was
1,197,082 ounces, a 13% increase. The increases in production were
primarily due to continued high recoveries in Peru and Manitoba,
mining of the high copper and gold grade zones at the Pampacancha
deposit and higher gold and copper grade zones at Lalor, record
throughput at the New Britannia gold mill, and incremental
production from the Copper Mountain mine. Consolidated zinc
production in the fourth quarter of 2023 decreased compared to the
prior quarter primarily due to lower base metals throughput and
lower zinc grades at Lalor, as planned.
Cash generated from operating activities in the
fourth quarter of 2023 increased by 50% to $228.5 million compared
to $151.9 million in the third quarter of 2023. Operating cash flow
before change in non-cash working capital was a record $246.5
million, reflecting an increase of $64.5 million compared to the
third quarter. The increase in operating cash flow before change in
non-cash working capital was primarily the result of higher copper
and gold sales volumes from mining the high copper and gold grade
zones of the Pampacancha deposit and higher gold and copper grade
zones at Lalor and higher copper and gold metal prices.
Net earnings and earnings per share in the
fourth quarter of 2023 were $33.5 million and $0.10, respectively,
compared to net earnings and earnings per share of $45.5 million
and $0.13, respectively in the third quarter. The results were
positively impacted by higher copper, gold and silver sales volumes
as well as higher copper, gold and silver realized prices. This was
partially offset by a non-cash loss of $34.0 million related to the
quarterly revaluation of the environmental reclamation provision at
closed sites and a non-cash revaluation loss of $9.0 million
related to the gold prepayment liability.
Adjusted net earningsi and adjusted net earnings
per sharei in the fourth quarter of 2023 were $71.3 million and
$0.20 per share, respectively, after adjusting for the non-cash
loss related to the revaluation of the company’s environmental
provision and the revaluation loss on the gold prepayment
liability, among other items. This compares to adjusted net
earnings and adjusted net earnings per share of $24.4 million, and
$0.07 in the prior quarter. Fourth quarter adjusted EBITDAi was
$274.4 million, an increase of 44% compared to $190.7 million in
the third quarter of 2023.
In the fourth quarter of 2023, consolidated cash
cost per pound of copper produced, net of by-product creditsi, was
$0.16, compared to $1.10 in the third quarter. Consolidated
sustaining cash cost per pound of copper produced, net of
by-product creditsi, was $1.09 in the fourth quarter of 2023
compared to $1.89 in the third quarter. The significant decrease in
both was the result of higher copper production and higher
by-product credits, partially offset by higher mining, milling and
G&A costs from incorporating Copper Mountain.
Consolidated all-in sustaining cash cost per
pound of copper produced, net of by-product creditsi, was $1.31 in
the fourth quarter of 2023, lower than $2.04 in the third quarter,
due to the same reasons outlined above as well as lower corporate
selling and administrative expenses.
As at December 31, 2023, total liquidity
increased to $573.7 million, including $249.8 million in cash and
cash equivalents as well as undrawn availability of $323.9 million
under the company’s revolving credit facilities. Net debt declined
by $94.5 million to $1,037.7 million as at December 31, 2023.
During the quarter, Hudbay redeemed, in full, the remaining $59.7
million of outstanding Copper Mountain bonds and reduced the net
balance drawn under the revolving credit facilities by $30 million.
Based on continued free cash flow generation in the fourth quarter
of 2023, the company continues to make progress on the deleveraging
targets set out in the “3-P” plan for sanctioning Copper World.
Current liquidity combined with cash flow from operations is
expected to be sufficient to meet liquidity needs for the
foreseeable future.
Summary of Full Year
Results
Hudbay achieved its 2023 consolidated production
guidance for all metals. On a business unit stand-alone basis, Peru
exceeded the top end of the gold production guidance range,
Manitoba exceeded the top end of the copper production guidance
range and Copper Mountain exceeded the top end of the silver
production guidance range for the portion of 2023 since
acquisition. Consolidated copper, gold and silver production for
the full year 2023 increased by 26%, 41% and 13%, respectively,
compared to 2022 with the acquisition of Copper Mountain as well as
higher throughput and recoveries in Peru and Manitoba and higher
overall copper, gold and silver grades.
Consolidated cash cost per pound of copper
produced, net of by-product creditsi, in 2023 was $0.80, compared
to $0.86 in 2022, and achieved the low end of the 2023 annual cost
guidance range. This decrease was mainly the result of higher
copper production and higher by-product credits, partially offset
by higher mining and milling costs from incorporating Copper
Mountain. Consolidated sustaining cash cost per pound of copper
produced, net of by-product creditsi, was $1.72 in 2023, compared
to $2.07 in 2022, outperforming 2023 guidance expectations. This
decrease was driven by the above reasons as well as the lower cash
sustaining capital expenditures. Consolidated all-in sustaining
cash cost per pound of copper produced, net of by-product creditsi,
was $1.92 in 2023, lower than $2.26 in 2022, due to the same
reasons outlined above partially offset by higher corporate selling
and administrative expenses.
Cash generated from operating activities
decreased to $476.9 million in 2023 from $487.8 million in 2022
primarily due to a $189.2 million decrease in non-cash working
capital caused by timing and changes in provisionally priced
receivables and an increase in inventory. Operating cash flow
before change in non-cash working capital increased to $570.0
million from $391.7 million in 2022. The increase in operating cash
flow before change in non-cash working capital was primarily the
result of higher copper and gold sales volumes and higher gold
prices, partially offset by lower zinc sales volumes, lower copper
and zinc metal prices and higher treatment and refining charges.
Zinc sales volumes were lower than the prior year due to the
planned closure of the 777 mine in June 2022.
Net earnings and earnings per share for 2023
were $69.5 million and $0.22, respectively, compared to 2022 net
earnings and earnings per share of $70.4 million and $0.27,
respectively. Full year 2023 net earnings were impacted by $21.4
million in non-cash mark-to-market losses arising from the
revaluation of the gold prepayment liability, investments and
share-based compensation, partially offset by a non-cash gain of
$11.4 million related to the revaluation of the Flin Flon
environmental reclamation provision. The prior period results
benefited from a non-cash $133.5 million revaluation gain for the
Flin Flon environmental reclamation provision, partially offset by
a $95.0 million pre-tax impairment loss related to the previous
stand-alone development plan for the Rosemont deposit. Full year
2023 adjusted EBITDAi was $647.8 million, an increase of 36%
compared to $475.9 million in 2022.
|
Consolidated Financial Condition ($000s) |
|
Dec. 31, 2023 |
Sep. 30, 2023 |
Dec. 31, 2022 |
|
Cash and cash equivalents |
|
249,794 |
245,217 |
225,665 |
|
Total long-term debt |
|
1,287,536 |
1,377,443 |
1,184,162 |
|
Net debt1 |
|
1,037,742 |
1,132,226 |
958,497 |
|
Working capital2 |
|
135,913 |
128,463 |
76,534 |
|
Total assets |
|
5,312,634 |
5,250,596 |
4,325,943 |
|
Equity3 |
|
2,096,811 |
2,044,684 |
1,571,809 |
|
Net debt to adjusted EBITDA1,4 |
|
1.6 |
2.3 |
2.0 |
1 Net debt and net debit to adjusted EBITDA are non-IFRS
financial performance measures with no standardized definition
under IFRS. For further information, please see the "Non-IFRS
Financial Performance Measures" section of this news release.2
Working capital is determined as total current assets less total
current liabilities as defined under IFRS and disclosed on the
consolidated financial statements. 3 Equity attributable to owners
of the company.4 Net debt to adjusted EBITDA for the 12 month
period.
|
Consolidated Financial Performance |
|
Three Months Ended |
|
|
|
Dec. 31, 2023 |
Sep. 30, 2023 |
Dec. 31, 2022 |
|
Revenue |
$000s |
602,189 |
480,456 |
321,196 |
|
Cost of sales |
$000s |
405,433 |
374,057 |
251,520 |
|
Earnings (loss) before tax |
$000s |
80,982 |
84,149 |
(14,287) |
|
Earnings (loss) |
$000s |
33,528 |
45,490 |
(17,441) |
|
Basic and diluted earnings (loss) per share |
$/share |
0.10 |
0.13 |
(0.07) |
|
Adjusted earnings per share1 |
$/share |
0.20 |
0.07 |
0.01 |
|
Operating cash flow before change in non-cash working capital |
$ millions |
246.5 |
182.0 |
109.1 |
|
Adjusted EBITDA1 |
$ millions |
274.4 |
190.7 |
124.7 |
|
|
|
|
Year Ended |
|
|
|
|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Revenue |
$000s |
|
1,690,030 |
1,461,440 |
|
Cost of sales |
$000s |
|
1,297,469 |
1,184,552 |
|
Earnings before tax |
$000s |
|
151,830 |
95,815 |
|
Earnings |
$000s |
|
69,543 |
70,382 |
|
Basic and diluted earnings per share |
$/share |
|
0.22 |
0.27 |
|
Adjusted earnings per share1 |
$/share |
|
0.23 |
0.10 |
|
Operating cash flow before change in non-cash working capital |
$ millions |
|
570.0 |
391.7 |
|
Adjusted EBITDA1 |
$ millions |
|
647.8 |
475.9 |
| 1
Adjusted (loss) earnings per share and adjusted EBITDA are non-IFRS
financial performance measures with no standardized definition
under IFRS. For further information, please see the “Non-IFRS
Financial Performance Measures” section. |
|
Consolidated Production and Cost Performance5 |
Three Months Ended |
|
|
|
Dec. 31, 2023 |
Sep. 30, 2023 |
Dec. 31, 2022 |
|
Contained metal in concentrate and doré
produced1 |
|
|
|
|
Copper |
tonnes |
45,450 |
41,964 |
29,305 |
|
Gold |
ounces |
112,776 |
101,417 |
53,920 |
|
Silver |
ounces |
1,197,082 |
1,063,032 |
795,015 |
|
Zinc |
tonnes |
5,747 |
10,291 |
6,326 |
|
Molybdenum |
tonnes |
397 |
466 |
344 |
|
Payable metal sold |
|
|
|
|
|
Copper |
tonnes |
44,006 |
39,371 |
25,415 |
|
Gold2 |
ounces |
104,840 |
74,799 |
47,256 |
|
Silver2 |
ounces |
1,048,877 |
748,955 |
559,306 |
|
Zinc3 |
tonnes |
7,385 |
7,125 |
8,230 |
|
Molybdenum |
tonnes |
468 |
426 |
421 |
|
Consolidated cash cost per pound of copper
produced4 |
|
|
|
|
Cash cost |
$/lb |
0.16 |
1.10 |
1.08 |
|
Sustaining cash cost |
$/lb |
1.09 |
1.89 |
2.21 |
|
All-in sustaining cash cost |
$/lb |
1.31 |
2.04 |
2.41 |
|
|
|
|
Year Ended |
|
|
|
|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Contained metal in concentrate and doré
produced1 |
|
|
|
|
Copper |
tonnes |
|
131,691 |
104,173 |
|
Gold |
ounces |
|
310,429 |
219,700 |
|
Silver |
ounces |
|
3,575,234 |
3,161,294 |
|
Zinc |
tonnes |
|
34,642 |
55,381 |
|
Molybdenum |
tonnes |
|
1,566 |
1,377 |
|
Payable metal sold |
|
|
|
|
|
Copper |
tonnes |
|
124,996 |
94,473 |
|
Gold2 |
ounces |
|
276,893 |
213,415 |
|
Silver2 |
ounces |
|
3,145,166 |
2,978,485 |
|
Zinc3 |
tonnes |
|
28,779 |
59,043 |
|
Molybdenum |
tonnes |
|
1,462 |
1,352 |
|
Consolidated cash cost per pound of copper
produced4 |
|
|
|
|
Cash cost |
$/lb |
|
0.80 |
0.86 |
|
Sustaining cash cost |
$/lb |
|
1.72 |
2.07 |
|
All-in sustaining cash cost |
$/lb |
|
1.92 |
2.26 |
| 1
Includes production results from the Copper Mountain mine following
the June 20, 2023 acquisition completion date. Production results
from the Copper Mountain mine represents the period from June 20,
2023 acquisition completion date through to the end of the fourth
quarter of 2023. Includes 100% of Copper Mountain mine production.
Hudbay owns 75% of the Copper Mountain mine. As Copper Mountain was
acquired on June 20, 2023, there were no comparative 2022
figures. |
| 2
Includes total payable gold and silver in concentrate and in doré
sold. |
| 3
Metal reported in concentrate is prior to deductions associated
with smelter contract terms. |
| 4
For the three months ended December 31, 2023 and September 30,
2023, this metric includes payable zinc in concentrate sold. For
the three months ended December 31, 2022, this metric also included
refined zinc metal and payable zinc in concentrate sold. For the
year ended December 31, 2023, this metric includes payable zinc in
concentrate sold. For the year ended December 31, 2022, this metric
also included payable refined zinc metal sold. |
| 5
Cash cost, sustaining cash cost and all-in sustaining cash cost per
pound of copper produced, net of by-product credits, are non-IFRS
financial performance measures with no standardized definition
under IFRS. For further information, please see the “Non-IFRS
Financial Performance Measures” section of this news release. |
|
|
Peru Operations Review
|
Peru Operations |
Three Months Ended |
Year Ended |
|
|
|
Dec. 31, 2023 |
Sep. 30, 2023 |
Dec. 31, 2022 |
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Constancia ore mined1 |
tonnes |
973,176 |
1,242,198 |
5,614,918 |
9,265,954 |
25,840,435 |
|
Copper |
% |
0.30 |
0.30 |
0.40 |
0.32 |
0.35 |
|
Gold |
g/tonne |
0.04 |
0.04 |
0.04 |
0.04 |
0.04 |
|
Silver |
g/tonne |
2.26 |
2.91 |
3.48 |
2.53 |
3.40 |
|
Molybdenum |
% |
0.01 |
0.01 |
0.01 |
0.01 |
0.01 |
|
Pampacancha ore mined |
tonnes |
5,556,613 |
5,894,013 |
3,771,629 |
14,756,416 |
8,319,250 |
|
Copper |
% |
0.56 |
0.53 |
0.37 |
0.51 |
0.33 |
|
Gold |
g/tonne |
0.32 |
0.30 |
0.29 |
0.33 |
0.29 |
|
Silver |
g/tonne |
4.84 |
4.22 |
3.84 |
4.28 |
4.06 |
|
Molybdenum |
% |
0.01 |
0.02 |
0.01 |
0.01 |
0.01 |
|
Total ore mined |
tonnes |
6,529,789 |
7,136,211 |
9,386,547 |
24,022,370 |
34,159,685 |
|
Strip ratio2 |
|
1.26 |
1.36 |
0.97 |
1.51 |
1.13 |
|
Ore milled |
tonnes |
7,939,044 |
7,895,109 |
7,795,735 |
30,720,929 |
30,522,294 |
|
Copper |
% |
0.48 |
0.43 |
0.41 |
0.39 |
0.34 |
|
Gold |
g/tonne |
0.25 |
0.21 |
0.12 |
0.16 |
0.09 |
|
Silver |
g/tonne |
4.20 |
3.75 |
3.93 |
3.62 |
3.58 |
|
Molybdenum |
% |
0.01 |
0.02 |
0.01 |
0.01 |
0.01 |
|
Copper recovery |
% |
87.4 |
85.2 |
85.1 |
84.2 |
85.0 |
|
Gold recovery |
% |
77.6 |
74.8 |
69.6 |
71.8 |
63.6 |
|
Silver recovery |
% |
78.0 |
73.2 |
66.5 |
70.0 |
65.7 |
|
Molybdenum recovery |
% |
33.6 |
37.2 |
37.7 |
35.8 |
34.8 |
|
Contained metal in concentrate |
|
|
|
|
|
|
Copper |
tonnes |
33,207 |
29,081 |
27,047 |
100,487 |
89,395 |
|
Gold |
ounces |
49,418 |
40,596 |
20,860 |
114,218 |
58,229 |
|
Silver |
ounces |
836,208 |
697,211 |
655,257 |
2,505,229 |
2,309,352 |
|
Molybdenum |
tonnes |
397 |
466 |
344 |
1,566 |
1,377 |
|
Payable metal sold |
|
|
|
|
|
|
Copper |
tonnes |
31,200 |
27,490 |
23,789 |
96,213 |
79,805 |
|
Gold |
ounces |
38,114 |
32,757 |
15,116 |
97,176 |
49,968 |
|
Silver |
ounces |
703,679 |
460,001 |
411,129 |
2,227,419 |
2,045,678 |
|
Molybdenum |
tonnes |
468 |
426 |
421 |
1,462 |
1,352 |
|
Combined unit operating cost3,4,5 |
$/tonne |
12.24 |
12.20 |
13.64 |
12.47 |
12.78 |
|
Cash cost5 |
$/lb |
0.54 |
0.83 |
1.34 |
1.07 |
1.58 |
|
Sustaining cash cost5 |
$/lb |
1.21 |
1.51 |
2.09 |
1.81 |
2.35 |
|
1 Reported tonnes and grade for ore mined are estimates based on
mine plan assumptions and may not reconcile fully to ore milled.2
Strip ratio is calculated as waste mined divided by ore mined.3
Reflects combined mine, mill and general and administrative
("G&A") costs per tonne of ore milled. Reflects the deduction
of expected capitalized stripping costs. 4 Excludes approximately
$0.7 million, or $0.09 per tonne, of COVID-related costs during the
three months ended December 31, 2022 and $5.2 million or $0.17 per
tonne, during the twelve months ended December 31, 2022.5 Combined
unit costs, cash cost and sustaining cash cost per pound of copper
produced, net of by-product credits, are non-IFRS financial
performance measures with no standardized definition under IFRS.
For further information, please see the “Non-IFRS Financial
Performance Measures” section of this news release. |
|
|
|
|
|
During the fourth quarter of 2023, the Peru
operations produced 33,207 tonnes of copper, 49,418 ounces of gold,
836,208 ounces of silver and 397 tonnes of molybdenum. Fourth
quarter 2023 production of copper, gold and silver increased 14%,
22% and 20%, respectively, over the third quarter with continued
higher copper and precious metal grades, higher recoveries and
higher throughput. Peru’s full year 2023 production of copper,
gold, silver and molybdenum was 12%, 96%, 8% and 14% higher,
respectively, than 2022 for the same reasons outlined above. Copper
production was in line with the company’s annual guidance range,
whereas silver and molybdenum production were near the upper end
and gold production exceeded the top end of the annual guidance
range by 6%.
Total ore mined in the fourth quarter of 2023
decreased by 9% compared to the third quarter due to continued
phase five stripping activities at Constancia and a significant
increase in Pampacancha mining activity which entails a higher
amount of stripping. The decrease in total mined ore was in line
with the mine plan, with ore stockpiles supplementing mill feed
during the quarter. Ore mined from Pampacancha during the fourth
quarter was 5.6 million tonnes, at average grades of 0.56% copper
and 0.32 grams per tonne gold.
Ore milled during the fourth quarter of 2023 was
consistent with the prior quarter. Milled copper and gold grades
increased by 12% and 19%, respectively, in the fourth quarter
compared to the third quarter due to continued contribution of
higher grade copper and gold ore from Pampacancha.
Recoveries of copper, gold and silver during the
fourth quarter of 2023 were 87.4%, 77.6% and 78.0%, respectively,
with recoveries of all metals improving quarter over quarter, in
line with metallurgical models. The Constancia mill achieved record
copper recoveries as a result of the successful completion of the
recovery improvement program in the second quarter of 2023, as
planned, ahead of the start of the period of significantly higher
grades from the Pampacancha pit. The program scope was to increase
copper recoveries by 2% by increasing the rougher mass, and the
mill continues to achieve the targeted higher copper recoveries.
Copper recoveries in the fourth quarter also benefited from higher
overall head grades and lower contaminants.
Ore mined during 2023 was 30% lower than 2022
due to the same factors as the quarterly variance as well as
increased stockpile processing early in 2023 to ration fuel during
the protests and civil unrest experienced in Peru. Copper
recoveries in 2023 were 1% lower than 2022 due to higher levels of
contaminants in processed stockpile ore during the first half of
2023. Gold and silver recoveries in 2023 were 13% and 7% higher,
respectively, than 2022 due to increased processing of higher grade
Pampacancha ore.
Combined mine, mill and G&A unit operating
costsi in the fourth quarter were slightly higher than the third
quarter primarily due to the costs associated with the scheduled
semi-annual plant maintenance shutdown. Combined mine, mill and
G&A unit operating costsi for the full year 2023 were 2% lower
than 2022 primarily due to lower mining costs as a result of lower
ore mined and higher capitalized stripping.
Peru’s cash cost per pound of copper produced,
net of by-product creditsi, in the fourth quarter of 2023 was
$0.54, a decrease of 35% compared to the third quarter due to
higher by-product credits mainly from gold, higher capitalized
stripping and higher copper production. This was partially offset
by higher profit-sharing expenses and higher treatment, refining
and freight costs. Cash cost per pound of copper produced, net of
by-product creditsi, in 2023 was $1.07, a 32% reduction from 2022,
and achieved the lower end of the cost guidance range due to the
same factors noted above.
Sustaining cash cost per pound of copper
produced, net of by-product creditsi, for the fourth quarter and
for the year ended 2023 were 20% and 23% lower, respectively, than
the third quarter and the prior year primarily due to the same
factors affecting cash cost noted above and lower sustaining
capital expenditures. Total annual sustaining capital expenditures
in Peru were $27.9 million lower than the original guidance,
exceeding the $10 million previously reduced target, primarily a
result of lower capitalized stripping costs.
Manitoba Operations Review
|
Manitoba Operations |
Three Months Ended |
Year Ended |
|
|
|
Dec. 31, 2023 |
Sep. 30, 2023 |
Dec. 31, 2022 |
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Lalor |
|
|
|
|
|
|
|
Ore mined |
tonnes |
372,384 |
367,491 |
369,453 |
1,526,729 |
1,516,203 |
|
Gold |
g/tonne |
5.92 |
5.08 |
4.00 |
4.74 |
4.00 |
|
Copper |
% |
1.04 |
1.02 |
0.73 |
0.86 |
0.73 |
|
Zinc |
% |
2.20 |
3.31 |
2.17 |
3.00 |
3.14 |
|
Silver |
g/tonne |
28.92 |
27.80 |
19.37 |
24.51 |
21.96 |
|
New Britannia |
|
|
|
|
|
|
Ore milled |
tonnes |
165,038 |
146,927 |
141,142 |
596,912 |
542,269 |
|
Gold |
g/tonne |
8.03 |
6.93 |
6.11 |
6.76 |
6.28 |
|
Copper |
% |
1.46 |
1.22 |
0.91 |
1.03 |
0.81 |
|
Zinc |
% |
0.85 |
0.90 |
0.67 |
0.84 |
0.80 |
|
Silver |
g/tonne |
27.97 |
23.88 |
22.09 |
25.11 |
20.97 |
|
Gold recovery - concentrate |
% |
58.1 |
64.7 |
56.6 |
60.0 |
60.3 |
|
Copper recovery - concentrate |
% |
91.6 |
97.4 |
89.3 |
93.3 |
90.7 |
|
Silver recovery - concentrate |
% |
61.0 |
63.2 |
55.4 |
60.7 |
60.6 |
|
Stall Concentrator |
|
|
|
|
|
|
Ore milled |
tonnes |
228,799 |
255,516 |
204,350 |
965,567 |
968,638 |
|
Gold |
g/tonne |
4.22 |
3.70 |
2.50 |
3.45 |
2.86 |
|
Copper |
% |
0.73 |
0.77 |
0.61 |
0.74 |
0.71 |
|
Zinc |
% |
3.20 |
4.88 |
3.43 |
4.36 |
4.70 |
|
Silver |
g/tonne |
28.63 |
28.82 |
19.24 |
24.19 |
22.81 |
|
Gold recovery |
% |
67.5 |
67.8 |
62.4 |
64.8 |
58.0 |
|
Copper recovery |
% |
92.0 |
93.9 |
89.0 |
90.4 |
87.2 |
|
Zinc recovery |
% |
78.5 |
82.6 |
90.1 |
82.2 |
86.6 |
|
Silver recovery |
% |
61.8 |
64.9 |
56.6 |
61.4 |
56.8 |
|
Total contained metal in concentrate and
doré1 |
|
|
|
Gold |
ounces |
59,863 |
56,213 |
33,060 |
187,363 |
161,471 |
|
Copper |
tonnes |
3,735 |
3,580 |
2,258 |
12,154 |
14,778 |
|
Zinc |
tonnes |
5,747 |
10,291 |
6,326 |
34,642 |
55,381 |
|
Silver |
ounces |
255,579 |
264,752 |
139,758 |
851,723 |
851,942 |
|
Total payable metal sold |
|
|
|
|
|
|
Gold2 |
ounces |
63,635 |
36,713 |
32,140 |
171,297 |
163,447 |
|
Copper |
tonnes |
3,687 |
2,925 |
1,626 |
10,708 |
14,668 |
|
Zinc3 |
tonnes |
7,385 |
7,125 |
9,230 |
28,779 |
59,043 |
|
Silver2 |
ounces |
246,757 |
197,952 |
148,177 |
728,304 |
932,807 |
|
Combined unit operating cost4,5 |
C$/tonne |
216 |
217 |
241 |
217 |
195 |
|
Gold cash cost5 |
$/oz |
434 |
670 |
922 |
727 |
297 |
|
Gold sustaining cash cost5 |
$/oz |
788 |
939 |
1,795 |
1,077 |
1,091 |
1 Doré includes sludge, slag and carbon fines in three months
ended December 31, 2023 and September 30, 2023.2 Includes total
payable precious metals in concentrate and doré sold.3 Includes
refined zinc metal and payable zinc in concentrate sold.4 Reflects
combined mine, mill and G&A costs per tonne of ore milled. 5
Combined unit operating cost, cash cost and sustaining cash cost
per ounce of gold produced, net of by-product credits, are non-IFRS
financial performance measures with no standardized definition
under IFRS. For further information, please see the “Non-IFRS
Financial Performance Measures” section of this news release.
The Manitoba operations produced a record 59,863
ounces of gold during the fourth quarter of 2023, along with 3,735
tonnes of copper, 5,747 tonnes of zinc and 255,579 ounces of
silver. Production of gold and copper increased by 6% and 4%,
respectively, in the fourth quarter compared to the third quarter,
while production of silver and zinc decreased by 3% and 44%,
respectively. This was due to mining of higher grade gold zones
with a focus on higher quality ore production and higher recoveries
at the New Britannia and Stall mills. Despite significantly higher
metal production in the fourth quarter, 2023 production of copper
and zinc was lower by 18% and 37%, respectively, than in 2022,
mainly due to the loss of production from the closure of the 777
mine in June 2022 and lower comparative zinc grades. Production of
gold in 2023 was 16% higher than in 2022 while silver production
was unchanged year-over-year. The production of all metals achieved
2023 production guidance, while copper exceeded the top end of 2023
annual guidance range.
In Manitoba, the company continues to focus on
improvement initiatives aimed at supporting higher production
levels, minimizing dilution and enhancing metal recoveries at the
Snow Lake operations. A significant focus continues to be placed on
improving the quality of ore production at Lalor mine, employing
techniques such as stope redesigns, grade control practices prior
to blasting, assaying blasthole cuttings and implementing mine
design adjustments to mitigate dilution. These proactive measures
have successfully reduced the inclusion of waste rock in the mining
cycle and increased gold, copper, and silver grades during the
fourth quarter.
Optimization of development drift size has led
to a 15% reduction in waste volume and an 18% decrease in unit
development costs in 2023 compared to 2022. Higher shaft
availability has led to efficient ore hoisting and has eliminated
the need for trucking ore to surface, resulting in a 5% increase in
tonnes hoisted in 2023 compared to 2022. Despite encountering some
production challenges in deeper mining areas due to longer haul
distances, smaller stope dimensions, and lower ore bulk density,
the team is actively pursuing initiatives to continue to bolster
efficiency and further enhance mucking productivity.
Additionally, the company advanced optimization
initiatives at New Britannia mill to achieve higher throughput
rates by prioritizing process improvements and seamlessly
integrating additional gold ore feed from the Lalor mine. This
reallocation of ore has led to reduced feed to Stall mill,
prompting a careful evaluation of lower tonnage set points to
optimize plant operations. The team has also started exploring
opportunities to share maintenance services with New Britannia
during shutdown periods which, if successful, would reduce overall
contractor requirements.
At Lalor, Hudbay achieved higher development
advance rates during the fourth quarter compared to prior quarters
of 2023. A comprehensive review of the long-range mine plan for
zone 40 has led to significantly reduced future capital development
needs by transitioning to a more selective mining method, thereby
enhancing the reserve grade for this mining front. Lalor ore mined
during the fourth quarter increased by 1% compared to the third
quarter. Notably, gold grades were 5.92 grams per tonne in the
quarter, a 17% increase from the third quarter.
Total ore mined at the Manitoba operations in
2023 was 24% lower than in 2022 mainly due to the planned closure
of the 777 mine in June 2022. However, total ore mined at Lalor in
2023 was 1% higher than in 2022. Gold, copper and silver grades
mined at Lalor during 2023 were 19%, 18% and 12% higher than in
2022, reflecting the successful execution of the strategic mine
plan. Zinc grades mined at Lalor for the full year 2023 were 4%
lower compared to the same period in 2022, consistent with the mine
plan.
The Stall mill processed slightly less ore in
the fourth quarter of 2023 compared to the third quarter, due to
more ore being sent to New Britannia as the mill exceeded design
throughput. After the commissioning of the Stall mill recovery
improvement project in the second quarter of 2023, the operations
continue to focus on optimizing circuits to achieve targeted
recoveries by reducing primary grind size, refining the flotation
circuit balance and mass pull and reagent selection. These
adjustments have proven highly effective, resulting in notably
higher recoveries for copper above 90% in the second half of 2023.
In addition, the Stall mill achieved its targeted gold recovery
levels of 67.5% in the fourth quarter, bringing the 2023 annual
recovery to 64.8%, compared to 58.0% in 2022.
Process improvement initiatives at New Britannia
have been successfully implemented with minimal capital outlays,
enabling the company to reach progressively higher production
targets during the fourth quarter. The New Britannia mill averaged
approximately 1,800 tonnes per day in the fourth quarter,
approximately 12% above average levels in the third quarter of
2023.
Combined mine, mill and G&A unit operating
costsi in the fourth quarter of 2023 slightly decreased compared to
the third quarter reflecting lower overall costs partially offset
by lower total ore milled. Combined mine, mill and G&A unit
operating costs for the full year 2023 were C$217 per tonne
reflecting the standalone cost structure of the Snow Lake
operations in 2023 after the closure of the Flin Flon operations in
June 2022.
Manitoba’s cash cost per ounce of gold produced,
net of by-product creditsi, has trended lower throughout 2023,
averaging $434 in the fourth quarter. Cash costs were significantly
lower in the fourth quarter, with higher by-product credits and
higher gold production, in accordance with the mine plan. Full year
2023 cash cost per ounce of gold produced, net of by-product
creditsi, was $727, which was higher than 2022 costs primarily due
to significantly lower by-product credits partially offset by lower
overall costs due to the closure of the 777 mine in June 2022 and
higher gold production. Full year 2023 cash cost per ounce of gold
produced, net of by-product creditsi, was within annual guidance
range.
Sustaining cash cost per ounce of gold produced,
net of by-product creditsi, for the fourth quarter of 2023 was
$788, a decrease of 16% compared to the third quarter due to the
same factors affecting cash cost combined with lower sustaining
capital expenditures. Total annual sustaining capital expenditures
in Manitoba are $19 million lower than the original 2023 guidance
levels of $75 million primarily a result of lower capital
development costs realized at Lalor as the team focuses on cost
efficiencies. Sustaining cash cost per ounce of gold produced, net
of by-product creditsi, in 2023 was $1,077, a decrease of 1% from
2022, primarily due to the same factors affecting fourth quarter
sustaining cash cost noted above.
British Columbia Operations
Review
|
British Columbia Operations5 |
Three Months Ended |
Year Ended5 |
|
|
|
Dec. 31, 2023 |
Sep. 30, 2023 |
Dec. 31, 2023 |
|
Ore mined1 |
tonnes |
2,627,398 |
3,792,568 |
6,975,389 |
|
Waste mined |
tonnes |
14,032,093 |
11,233,917 |
26,634,805 |
|
Strip ratio2 |
|
5.34 |
2.96 |
3.82 |
|
Ore milled |
tonnes |
3,261,891 |
3,158,006 |
6,862,152 |
|
Copper |
% |
0.33 |
0.36 |
0.35 |
|
Gold |
g/tonne |
0.06 |
0.08 |
0.07 |
|
Silver |
g/tonne |
1.36 |
1.40 |
1.36 |
|
Copper recovery |
% |
78.8 |
80.9 |
79.69 |
|
Gold recovery |
% |
54.1 |
56.1 |
55.88 |
|
Silver recovery |
% |
73.8 |
71.3 |
72.96 |
|
Total contained metal in concentrate |
|
|
|
Copper |
tonnes |
8,508 |
9,303 |
19,050 |
|
Gold |
ounces |
3,495 |
4,608 |
8,848 |
|
Silver |
ounces |
105,295 |
101,069 |
218,282 |
|
Total payable metal sold |
|
|
|
|
Copper |
tonnes |
9,119 |
8,956 |
18,075 |
|
Gold |
ounces |
3,091 |
5,329 |
8,420 |
|
Silver |
ounces |
98,441 |
91,002 |
189,443 |
|
Combined unit operating cost3,4 |
C$/tonne |
20.90 |
24.88 |
21.38 |
|
Cash cost4 |
$/lb |
2.67 |
2.67 |
2.50 |
|
Sustaining cash cost4 |
$/lb |
3.93 |
3.39 |
3.41 |
|
1 Reported tonnes and grade for ore mined are estimates based on
mine plan assumptions and may not reconcile fully to ore
milled. |
|
2 Strip ratio is calculated as waste mined divided by ore
mined. |
|
3 Reflects combined mine, mill and G&A costs per tonne of ore
milled. Reflects the deduction of expected capitalized stripping
costs. |
|
4 Combined unit operating cost, cash cost and sustaining cash cost
per pound of copper produced, net of by-product credits, are
non-IFRS financial performance measures with no standardized
definition under IFRS. For further information, please see the
“Non-IFRS Financial Performance Measures” section of this news
release.5 Includes 100% of Copper Mountain mine production, Hudbay
owns 75% of Copper Mountain mine. As Copper Mountain was acquired
on June 20, 2023, there were no comparative 2022 figures. Year
ended December 31, 2023 results from the date of acquisition, June
20, 2023, through to the end of the fourth quarter of 2023. |
|
|
During the fourth quarter of 2023, the British
Columbia operations produced 9,119 tonnes of copper, 3,091 ounces
of gold and 98,441 ounces of silver. Hudbay achieved the
post-acquisition 2023 production guidance for copper and gold and
exceeded the post-acquisition guidance for silver.
Total ore mined at Copper Mountain in the fourth
quarter of 2023 was 2.6 million tonnes, less than initially planned
but production was supplemented with stockpile rehandle of 1.5
million tonnes. The mine operations team has initiated a fleet
production ramp up plan to capture the full value of idle capital
equipment at the Copper Mountain site. This plan entailed
remobilization of the mining fleet from 14 trucks to 28 trucks by
the end of 2023, allowing for increased waste removal during the
fourth quarter. The company continues to focus on hiring additional
haul truck drivers, and a fully trained complement of truck drivers
are expected to be in place in the first half of 2024. The
utilization of the full truck fleet enabled additional 2023
pre-stripping to access higher head grades.
Benefitting from stabilization initiatives
within the comminution circuit, the mill processed 3.3 million
tonnes of ore during the fourth quarter reflecting average mill
availability of 86.7%, a 3% increase versus the third quarter of
2023. The initiatives included, but were not limited to, changes in
screen sizes, a reduction in grinding media loading rates and a
change in semi-autogenous grinding (SAG) mill operational strategy.
The SAG mill throughput in the fourth quarter has been impacted by
lower freshwater availability for processing, higher coarse feed
from stockpiled ore and reduced reliability of the crushing
circuit, driven principally by significant interruptions caused by
the removal of scrap metal from the material handling system as the
mining progresses through areas of historical underground
workings.
Maintenance practices to improve mill
availability continue to be a key pillar of the company’s
stabilization initiatives. These include the implementation of
improved maintenance management processes planned for the first
half of 2024 and a change in the maintenance organizational
structure which was completed in the fourth quarter of 2023. Beyond
maintenance practices, material handling and transportation in the
comminution circuit, particularly in the winter months, have a
significant impact on mill performance. Work has begun to analyze
the trade-off among the various alternatives to further enhance
mill performance.
Milled copper grades during the fourth quarter
of 2023 averaged 0.33%, an 8% reduction from the third quarter, but
were significantly higher than the reserve grade of 0.25%. Copper
recoveries of 78.8% were lower than the third quarter of 2023 due
to volumetric restriction in the regrind circuit limiting the
rougher circuit performance. Following a period of investigation,
changes to the flotation operational strategy that mirror the
company’s successful processes at Constancia were implemented,
including reagent selection and dose modification, reactivation and
reprogramming of expert controls and circuit configuration changes.
The benefits of these operational strategy improvements are
expected to start to be realized in the second half of 2024.
Combined mine, mill and G&A unit operating
costsi in the fourth quarter of 2023 were C$20.90 per tonne milled,
3% below the third quarter. Combined unit operating costs are
expected to decrease over time as the company continues to
implement stabilization and optimization initiatives at Copper
Mountain.
British Columbia’s cash cost and sustaining cash
cost per pound of copper produced, net of by-product creditsi, in
the fourth quarter of 2023 were $2.67 and $3.93, respectively. Cash
costs were within the post-acquisition guidance range.
Advancing Copper Mountain Mine
Stabilization Plans
Since completing the acquisition of Copper
Mountain on June 20, 2023, Hudbay has been focused on advancing
stabilization plans, including opening up the mine by adding
additional mining faces and re-mobilizing idle haul trucks,
optimizing the ore feed to the plant and implementing plant
improvement initiatives.
On December 5, 2023, the company released its
first NI 43-101 technical report in respect of the 75%-owned Copper
Mountain mine. As detailed in the technical report, the mine plan
contemplates average annual copper production of 46,500 tonnes in
the first five years, 45,000 tonnes in the first ten years and
37,000 tonnes over the 21-year mine life. Average cash costs and
sustaining cash costs per pound of copper produced, net of
by-product creditsi, over the mine life are expected to be $1.84
and $2.53, respectively. The updated mine plan represents an
approximate 90% increase in average annual copper production and an
approximate 50% decrease in cash costs over the first 10 years
compared to 2022.
Hudbay's stabilization plans are focused on
improving reliability and driving sustainable long-term value:
- Increased mining activities - Commenced a
fleet ramp-up plan to remobilize idle haul trucks. The plan entails
remobilization of the mining fleet from 14 trucks to 28 trucks by
the end of 2023. A fully trained complement of truck drivers is
expected to be in place in the first half of 2024. Once the fleet
ramp up plan is complete, the company expects to have improved
flexibility in the Copper Mountain mine with additional mining
faces.
- Accelerated stripping to access higher grades
– Hudbay has commenced a campaign of accelerated stripping over the
next three years to enable access to higher grade ore and to
mitigate the substantially reduced stripping undertaken by Copper
Mountain over the four years prior to completion of the
acquisition. The accelerated stripping program is expected to
improve operating efficiencies and lower unit operating costs.
- Improved mill throughput and recoveries -
Hudbay’s mine plan assumes a mill ramp up to its nominal capacity
of 45,000 tonnes per day in 2025. An expansion to the permitted
capacity of 50,000 tonnes per day is planned in 2027. The mine plan
assumes approximately $23 million in growth capital spending over
2025 and 2026 in connection with the mill expansion. Hudbay intends
to improve mill recoveries with a more consistent ore feed grade,
changes to the flotation reagents and replacement of key
pumps.
- Operating efficiencies and corporate synergies
- Hudbay's stabilization plans are expected to generate more than
$20 million in annual operating efficiencies over the next three
years, compared to Copper Mountain's performance in 2022, through
improvements in copper recovery, higher throughput rates and lower
combined unit operating costs. In addition, Hudbay has realized the
targeted $10 million in annual corporate synergies and is on track
to exceed the target.
- Ensure stabilization of near-term cash flows –
Recently entered into copper hedging contracts representing
approximately 25% of expected Copper Mountain production in 2024 as
a prudent measure to secure cash flows during the stabilization
period.
The mine plan is based on a revised resource
model and was constructed using consistent methods applied at the
Constancia, Copper World and Mason deposits. The mineral reserve
estimates total 367 million tonnes at a copper grade of 0.25% and a
gold grade of 0.12 grams per tonne, supporting a 21-year mine life.
An additional 140 million tonnes of measured and indicated
resources at 0.21% copper and 0.10 grams per tonne gold and 370
million tonnes of inferred resources at 0.25% copper and 0.13 grams
per tonne gold, exclusive of mineral reserves, provide significant
upside potential for reserve conversion and extending mine life.
Infill drilling is planned for 2024 to target reserve
conversion.
There are several opportunities to further
increase production, improve costs and extend mine life for Copper
Mountain. While these opportunities have not been considered in the
technical report as they are not yet at the level of required
engineering, the company is advancing studies to evaluate the
potential for these to be reflected in future mine plans.
Please see “Qualified Person and NI 43-101” for
further details regarding the technical and scientific information
included in the technical report.
Delivered Brownfield Capital Projects On
Time and On Budget
The Constancia mill achieved record copper
recoveries of 87.4% in the fourth quarter primarily as a result of
the successful completion of the recovery improvement program in
the second quarter of 2023, as planned, ahead of the start of
significantly higher grades being mined from the Pampacancha pit in
the second half of 2023. The program scope was to increase copper
recoveries by 2% by increasing the rougher mass, and the mill
continues to achieve the targeted higher copper recoveries.
After the commissioning of the Stall mill
recovery improvement project in the second quarter of 2023,
subsequent optimization activities proved highly effective,
resulting in notably higher recoveries for copper above 90% and
gold above 65% in the second half of 2023. Specifically, the Stall
mill achieved its targeted gold recovery levels of 67.5% in the
third and fourth quarters, compared to 60% in the second
quarter.
The total growth capital expenditures in 2023
associated with the completion of these recovery improvement
projects were in line with the company's guidance of $25
million.
The New Britannia mill has consistently achieved
higher throughput levels, averaging 1,650 tonnes per day in 2023
and approximately 1,800 tonnes per day in the fourth quarter,
significantly exceeding its original design capacity of 1,500
tonnes per day. The company has successfully implemented process
improvement initiatives that required minimal capital outlays in
pursuit of higher output that aligns with increased gold production
from the Lalor mine.
Generating Free Cash Flow with Increased
Production and Continued Financial Discipline
Hudbay delivered a second successive quarter of
positive free cash flow during the fourth quarter of 2023 as it
executed the plan for higher copper and gold production from
Pampacancha and higher gold production at Lalor, both driven by
higher grades. The company continues to expect to see strong
production levels throughout 2024 from sustained higher grades in
Peru and Manitoba, along with additional production from the
recently acquired Copper Mountain mine.
During the fourth quarter, Hudbay completed $30
million in net repayments on its revolving credit facilities and
redeemed, in full, the remaining $59.7 million of Copper Mountain’s
bonds from treasury. The company also recommenced deliveries under
the gold forward sale and prepay agreement in October 2023, further
reducing the outstanding gold prepayment liability, and the company
is on schedule to fully repay the gold prepay facility by August
2024. Despite these debt repayments, the company increased cash and
cash equivalents to $249.8 million and reduced overall net debt to
$1,037.7 million as at December 31, 2023, compared to $245.2
million and $1,132.2 million, respectively, as at September 30,
2023. The $94.5 million decline in net debt, together with higher
levels of adjusted EBITDA1 in the fourth quarter, have improved the
net debt to adjusted EBITDA ratioi to 1.6x compared to 2.0x at the
end of 2022. Subsequent to quarter-end, the company continued its
deleveraging efforts with an additional $10 million repayment on
its revolving credit facilities.
During the fourth quarter, Hudbay continued to
take steps to ensure free cash flow generation and continued
financial discipline into 2024 and 2025. To this end, the company
entered into forward sales contracts at Copper Mountain for a total
of 3,600 tonnes of 2024 copper production over the twelve-month
period from May 2024 to April 2025 at an average price of $3.93 per
pound as well as a zero-cost collars for 6,000 tonnes of copper
production over the twelve-month period from May 2024 to April 2025
at an average floor price of $3.83 per pound and an average cap
price of $4.03 per pound. As at December 31, 2023, 7.9 million
pounds of copper forwards and 13.2 million pounds of copper collars
were outstanding.
Hudbay successfully delivered on its annual
discretionary spending reduction targets for 2023. As a result of
continued financial discipline and capital cost efficiencies
achieved, total capital expenditures of approximately $243 million
for Peru, Manitoba and Arizona in 2023 were approximately $57
million lower than the original guidance levels, a further decrease
from the $30 million reduction announced in the third quarter,
representing a 19% reduction from the original 2023 total capital
expenditure guidance of $300 million.
Senior Management Team
Appointments
In November 2023, Hudbay promoted Luis
Santivañez to Vice President, South America. Mr. Santivañez joined
Hudbay in Peru in 2018 and was promoted to General Manager of the
South America operations in 2022. Mr. Santivañez has over 20 years
of experience at global mining companies working across Peru,
Central America and Australia. Under his leadership, the Constancia
operations have delivered a successful ramp up at Pampacancha,
navigated through a period of politically driven social unrest in
Peru and further enhanced the company's partnerships with the local
communities.
In January 2024, Hudbay appointed John Ritter as
Vice President, British Columbia Business Unit. Mr. Ritter brings a
diverse background with over 30 years of experience in technical,
operational and senior leadership roles at global mining companies.
He was most recently the General Manager of the New Afton mine in
B.C and has strong ties with the local community near the Copper
Mountain mine. His focus on operational excellence and
value-creating improvements will be instrumental as he leads the
stabilization and optimization plans at the Copper Mountain
mine.
Advancing Permitting at Copper
World
The first key state permit required for Copper
World, the Mined Land Reclamation Plan, was initially approved by
the Arizona State Mine Inspector in October 2021 and was
subsequently amended to reflect a larger private land project
footprint. This approval was challenged in state court, but the
challenge was dismissed in May 2023 as having no basis. In late
2022, Hudbay submitted the applications for an Aquifer Protection
Permit and an Air Quality Permit to the Arizona Department of
Environmental Quality. The company expects to receive these two
outstanding state permits in 2024.
Hudbay intends to initiate a minority joint
venture process prior to commencing a definitive feasibility study,
which will allow the joint venture partner to participate in the
final Copper World project design and the funding of definitive
feasibility study activities. The opportunity to sanction Copper
World is not expected until late 2025 based on current estimated
timelines. The decision to sanction Copper World will ultimately be
evaluated against other competing investment opportunities as part
of Hudbay’s capital allocation process.
Hudbay released results of the de-risked and
enhanced Copper World pre-feasibility study for Phase I in
September 2023, which demonstrated a simplified mine plan with an
extended 20-year mine life requiring only state and local permits,
an after-tax net present value (8%) of $1.1 billion and a 19%
internal rate of return at a copper price of $3.75 per pound.
Average annual copper production over the first ten years is
expected to be approximately 92,000 tonnes at cash costs and
sustaining cash costs per pound of copperi of $1.53 and $1.95,
respectively. Copper World is one of the highest-grade open pit
copper projects in the Americasiii with proven and probable mineral
reserves of 385 million tonnes at 0.54% copper.
Snow Lake Exploration
Hudbay continues to compile results from ongoing
infill drilling at Lalor, which will be incorporated into the next
annual mineral reserve and resource estimate update expected to be
announced in March 2024.
The planned 2024 exploration program is Hudbay’s
largest Snow Lake program in the company’s history and it is
currently underway with plans to continue testing the deep
extensions of the gold and copper zones at Lalor and complete
follow up drilling at the Lalor Northwest target. The 2024 program
will also explore the newly acquired Cook Lake claims and the
former Rockcliff claims located within trucking distance of the
existing Snow Lake processing infrastructure. As previously
disclosed, both the Cook Lake and former Rockcliff claims were
acquired by the company as part of transactions completed in 2023.
A majority of the Cook Lake and former Rockcliff claims have been
untested by modern deep geophysics, which was the discovery method
for the Lalor deposit. Hudbay’s 2024 exploration program includes a
large geophysics program consisting of surface electromagnetic
surveys using cutting-edge techniques that enable the team to
detect targets at depths of almost 1,000 metres below surface. The
company is exploring its newly expanded land package in hopes of
finding a new anchor deposit to maximize and extend the life of the
Snow Lake operations beyond 2038.
The company also expects to advance a
development and exploration drift at the 1901 deposit located
within 1,000 metres of the haulage ramp to Lalor. The program is
expected to take place over 2024 and 2025 with the development of
an access drift, drill platforms and diamond drilling to further
confirm the optimal mining method to extract the base metal and
gold lenses and to convert the inferred mineral resources in the
gold lenses to mineral reserves.
Advancing Metallurgical Test Work for
the Flin Flon Tailings Reprocessing Opportunity
Hudbay identified the opportunity to reprocess
Flin Flon tailings, with initial confirmatory drilling completed in
2022 indicating higher zinc, copper and silver grades than
predicted from historical mill records while confirming the
historical gold grade. In 2023, Hudbay advanced metallurgical test
work and evaluated metallurgical technologies, including the
signing of a test work co-operation agreement with Cobalt Blue
Holdings (“COB”) examining the use of COB technology to treat Flin
Flon tailings. Initial results from preliminary roasting test work
were encouraging in converting more than 90% of pyrite into
pyrrhotite and elemental sulphur. Final test work results will
support the development of an overall flowsheet. Hudbay expects to
continue these metallurgical activities throughout 2024 as it
assesses the economic viability of the various metallurgical
technologies.
Peru Exploration Update
The company continues to execute a limited drill
program and technical evaluations at the Constancia deposit to
confirm the economic viability of adding an additional mining phase
to the current mine plan that would convert a portion of the
mineral resources to mineral reserves. The results from this drill
program and technical and economic evaluations are expected to be
incorporated in the annual mineral reserve and resource estimate
update in March 2024.
Hudbay controls a large, contiguous block of
mineral rights with the potential to host satellite mineral
deposits in close proximity to the Constancia processing facility,
including the past producing Caballito property and the highly
prospective Maria Reyna property. The company commenced early
exploration activities at Maria Reyna and Caballito after
completing a surface rights exploration agreement with the
community of Uchucarcco in August 2022. A drill permit application
was submitted for the Maria Reyna property in November 2023, and a
similar application for the Caballito property is planned for the
first half of 2024. In parallel, Hudbay continues to advance
community engagement activities. Surface mapping and geochemical
sampling confirm that both Caballito and Maria Reyna host sulfide
and oxide rich copper mineralization in skarns, hydrothermal
breccias and large porphyry intrusive bodies.
Progressing Towards Climate Change
Commitments
In December 2022, Hudbay announced its
commitment to achieve net zero greenhouse gas ("GHG") emissions by
2050 and the adoption of interim 2030 GHG reduction targets to
support this commitment. While the company’s operations are
well-positioned in the lower half of the global GHG emissions curve
for copper operations, Hudbay recognizes its role in mitigating
climate change and that copper and the metals Hudbay produces play
an important role in the world’s transition to a greener future.
Hudbay’s GHG emissions reduction plan includes pursuing a 50%
reduction in absolute Scope 1 and Scope 2 emissions from existing
operations by 2030 and achieving net zero total emissions by
2050.
In 2023, the company made significant progress
towards its climate change goals, including:
- Peru Renewable Power Supply Agreement - During
the first quarter of 2023, Hudbay signed a new 10-year power
purchase agreement with ENGIE Energía Perú for access to a 100%
renewable energy supply to Constancia. The agreement will come into
effect in January 2026 following the conclusion of Constancia's
existing power supply agreement. Total Scope 1 and Scope 2 GHG
emissions company-wide at Hudbay’s current operations are expected
to decline by 40% during the life of the contract, positioning the
company well to achieve its 50% reduction target by 2030.
- Electric Shovel at Copper Mountain - In
September 2023, Hudbay commissioned a new Komatsu PC8000 electric
shovel at the Copper Mountain mine, which reduces carbon intensity
by displacing existing diesel shovel production.
- Renewable Diesel at Copper Mountain - In 2023,
Hudbay tested the use of renewable diesel in two of its non-trolley
assist haul trucks at Copper Mountain in an effort to further
reduce GHG emissions. The test results were promising and the
company subsequently entered into renewable diesel contracts for
approximately 80% of the expected fuel to be purchased in
2024.
- Electric Scooptram at Lalor - In the first
quarter of 2023, Hudbay initiated the trial of an electric Epiroc
scooptram ST14 SG at the Lalor mine, which reduces carbon intensity
by lowering emissions and reduces the temperature in the lower
areas of the mine to improve ventilation. The trial was successful
and, in the third quarter, a second electric scooptram was added to
the fleet.
2024 Key Objectives and Annual
Guidance
Hudbay’s key objectives for 2024 are to:
- Enhance Hudbay’s position to deliver its leading copper growth
pipeline;
- Deliver copper production growth and maintain strong gold
production from its diversified operating platform to generate
strong cash flow;
- Execute stabilization plan at Copper Mountain to drive improved
operating performance and achieve operating synergies;
- Maintain continued focus on financial discipline as the company
progresses towards achieving deleveraging targets by managing
discretionary spending and generating strong returns on invested
capital;
- Evaluate the viability of an additional mining phase at
Constancia that could convert a portion of mineral resources to
mineral reserves;
- Evaluate opportunities to utilize excess capacity at the Stall
mill in Snow Lake to enhance production and achieve greater
economies of scale;
- Progress de-risking of the Copper World project through final
state permitting activities and a potential joint venture
partnership to prudently advance the three pre-requisites plan
required for sanctioning;
- Execute the large exploration program on the expanded land
package in Snow Lake to target new discoveries;
- Advance plans to drill the prospective Maria Reyna and
Caballito properties near Constancia;
- Assess economic viability of various metallurgical technologies
for the reprocessing of Flin Flon tailings;
- Advance exploration partnership with Marubeni to explore for
new discoveries within trucking distance of the Flin Flon
processing facilities;
- Continue to identify and evaluate opportunities to further
reduce greenhouse gas emissions in alignment with the company’s
climate change commitments and global decarbonization goals;
- Assess growth opportunities that meet Hudbay’s stringent
strategic criteria and allocate capital to pursue those
opportunities that create sustainable value for the company and its
stakeholders; and
- As always, continue to operate safely and sustainably, aligned
with Hudbay’s purpose to ensure that the company’s activities have
a positive impact on its people, its communities and its
planet.
Hudbay’s annual production and operating
cost guidance, along with its annual capital and exploration
expenditure forecasts are discussed in detail below.
Production Guidance
|
Contained Metal in Concentrate and
Doré1 |
2024 Guidance |
Year Ended Dec. 31, 2023 |
2023 Guidance |
|
Peru |
|
|
|
|
|
Copper |
tonnes |
98,000 - 120,000 |
100,487 |
91,000 - 116,000 |
|
Gold |
ounces |
76,000 - 93,000 |
114,218 |
83,000 - 108,000 |
|
Silver |
ounces |
2,500,000 - 3,000,000 |
2,505,229 |
2,210,000 - 2,650,000 |
|
Molybdenum |
tonnes |
1,250 - 1,500 |
1,566 |
1,300 - 1,600 |
|
|
|
|
|
|
|
Manitoba |
|
|
|
|
|
Gold |
ounces |
170,000 - 200,000 |
187,363 |
175,000 - 205,000 |
|
Zinc |
tonnes |
27,000 - 35,000 |
34,642 |
28,000 - 36,000 |
|
Copper |
tonnes |
9,000 - 12,000 |
12,154 |
9,000 - 12,000 |
|
Silver |
ounces |
750,000 - 1,000,000 |
851,723 |
750,000 - 1,000,000 |
|
|
|
|
|
|
|
British Columbia |
|
|
|
|
|
Copper |
tonnes |
30,000 - 44,000 |
19,050 |
18,500 - 20,500 |
|
Gold |
ounces |
17,000 - 26,000 |
8,848 |
8,000 - 10,000 |
|
Silver |
ounces |
300,000 - 455,000 |
218,282 |
190,000 - 210,000 |
|
|
|
|
|
|
|
Total |
|
|
|
|
|
Copper |
tonnes |
137,000 - 176,000 |
131,691 |
118,500 - 148,500 |
|
Gold |
ounces |
263,000 - 319,000 |
310,429 |
266,000 - 323,000 |
|
Zinc |
tonnes |
27,000 - 35,000 |
34,642 |
28,000 - 36,000 |
|
Silver |
ounces |
3,550,000 - 4,455,000 |
3,575,234 |
3,150,000 - 3,860,000 |
|
Molybdenum |
tonnes |
1,250 - 1,500 |
1,566 |
1,300 - 1,600 |
|
1 Metal reported in concentrate and doré is prior to refining
losses or deductions associated with smelter terms. |
|
|
On a consolidated basis, Hudbay successfully
achieved 2023 production guidance for all metals. On a business
unit stand-alone basis, Peru exceeded the top end of the gold
production guidance range, Manitoba exceeded the top end of the
copper production guidance range, while British Columbia exceeded
the top end of the silver production guidance range for the portion
of 2023 since the acquisition of the Copper Mountain mine.
In 2024, consolidated copper production is
forecast to increase to 156,500 tonnesii, an increase of
approximately 19% compared to 2023 actual production levels. This
growth is a result of continued higher grade ore from Pampacancha
in Peru and continued higher recoveries in both Peru and Manitoba,
as well as the contribution from a full year of production at the
Copper Mountain mine. Consolidated gold production in 2024 is
expected to slightly decline to 291,000 ouncesii, due to a
smoothing of Pampacancha high grade gold zones over the 2023 to
2025 period, as described further below.
2024 copper production in Peru is expected to
increase by 8% from 2023 levels to 109,000 tonnesii. Mill ore feed
throughout 2024 is expected to revert back to the typical one-third
from Pampacancha and two-thirds from Constancia, unlike 2023 when a
majority of the ore feed was from Pampacancha in the second half of
the year. Gold production is expected to be 84,500 ouncesii, lower
than 2023 levels due a smoothing of Pampacancha high grade gold
zones over the 2023 to 2025 period as additional high grade areas
were mined in 2023 ahead of schedule, resulting in gold production
exceeding 2023 guidance levels, and other high grade areas were
deferred to 2025. Total gold production in Peru over the 2023 to
2025 period is expected to be higher than previous guidance
levelsii. The Pampacancha deposit is now expected to be depleted in
the third quarter of 2025, as opposed to mid-2025 previously.
Peru’s 2024 production guidance reflects periods of higher
stripping activities in the Pampacancha pit in the second and third
quarters, as well as regularly scheduled semi-annual mill
maintenance shutdowns at Constancia during the second and fourth
quarters of 2024.
In Manitoba, 2024 gold production is anticipated
to be 185,000 ouncesii, consistent with 2023 production as the
company expects the high gold grades and recoveries to continue
into 2024. The production guidance anticipates Lalor operating at
4,500 tonnes per day and an increase in New Britannia mill
throughput to 1,800 tonnes per day given the mill has been
consistently operating above its 1,500 tonnes per day nameplate
capacity. Zinc production for 2024 is expected to be 31,000
tonnesii, a 10% year-over-year decline as certain high grade zinc
areas were shifted to 2023 and the Lalor mine continues to
prioritize higher gold and copper grade zones in 2024. Manitoba’s
production guidance reflects a scheduled maintenance period at the
Lalor mine during the third quarter of 2024.
In British Columbia, 2024 copper production is
expected to be 37,000 tonnesii, in line with the technical report
for Copper Mountain issued in December 2023.
Hudbay will release its updated three-year
production outlook together with its annual mineral reserve and
resource update in March 2024.
Cash Cost Guidance
Copper remains the primary revenue contributor
on a consolidated basis, and therefore, consolidated cost guidance
has been presented as cash cost per pound of copper produced. The
company has also provided cash cost guidance for each of its
operations based on their respective primary metal
contributors.
|
Cash cost1 |
|
2024 Guidance |
Year Ended Dec. 31, 2023 |
2023 Guidance |
|
Peru cash cost per pound of copper2 |
$/lb |
1.25 - 1.60 |
1.07 |
1.05 - 1.30 |
|
Manitoba cash cost per ounce of gold3 |
$/oz |
700 - 900 |
727 |
500 - 800 |
|
British Columbia cash cost per pound of copper2 |
$/lb |
2.00 - 2.50 |
2.50 |
2.40 - 2.85 |
|
|
|
|
|
|
|
Consolidated cash cost per pound of copper |
$/lb |
1.05 - 1.25 |
0.80 |
0.80 - 1.10 |
|
Consolidated sustaining cash cost per pound of copper |
$/lb |
2.00 - 2.45 |
1.72 |
1.80 - 2.25 |
1 Cash cost and sustaining cash cost per pound
of copper produced, net of by-product credits, and cash cost per
ounce of gold produced, net of by-product credits, are non-IFRS
financial performance measures with no standardized definition
under IFRS. For further information, please see the “Non-IFRS
Financial Performance Measures” section of this news release.2 Peru
and British Columbia cash cost per pound of copper contained in
concentrate assumes by-product credits are calculated using the
gold and silver deferred revenue drawdown rates in effect on
December 31, 2023 for the streamed ounces in Peru and the following
commodity prices: $1,900 per ounce gold, $23.00 per ounce silver,
$18.00 per pound molybdenum, $1.15 per pound zinc and an exchange
rate of 1.35 C$/US$. 3 Manitoba cash cost per ounce of gold
produced, net of by-product credits, contained in concentrate and
doré assumes by-product credits are calculated using the following
commodity prices: $1.15 per pound zinc, $23.00 per ounce silver,
$3.75 per pound copper and an exchange rate of 1.35 C$/US$.
Copper cash cost in Peru is expected to increase
to $1.25 to $1.60 per pound in 2024 versus 2023 primarily due to
lower by-product credits and higher mining costs associated with
lower capitalized stripping, partially offset by higher copper
production.
Gold cash cost in Manitoba is expected to
increase by 10%ii in 2024 compared to 2023 as a result of lower
zinc and copper by-product credits and higher mining costs
associated with less capitalized development costs.
Copper cash cost in British Columbia is expected
to decrease by 10%ii in 2024 compared to 2023 and is expected to be
significantly lower than the $2.69 per pound cash cost contemplated
in the December 2023 technical report due to a reclassification of
a portion of mining costs from operating expenses to capitalized
costs. This is a result of a change from contractor mining to
owner-operating mining as a more cost-effective approach for the
additional required stripping, and the elimination of mining
low-grade ore to stockpile in 2024 which increases the strip ratio
and allocation of mining costs to capitalized stripping. In
addition, the 2024 costs reflect a decrease in the discretionary
tonnes moved with total material moved in 2024 now expected to be
97 million tonnes compared to 104 million tonnes in the technical
report.
Consolidated copper cash cost and consolidated
sustaining cash cost in 2024 are both expected to be higher than
2023 results due to lower by-product credits and a full year of
contributions from British Columbia.
Capital Expenditure Guidance
|
Capital Expenditures(in $ millions) |
2024 Guidance4 |
Year EndedDec. 31, 2023 |
2023 Revised Guidance5 |
2023 Original Guidance |
|
Sustaining capital1 |
|
|
|
|
|
Peru2 |
130.0 |
132.1 |
150.0 |
160.0 |
|
Manitoba |
55.0 |
55.8 |
60.0 |
75.0 |
|
British Columbia – sustaining capital |
35.0 |
30.22 |
33.02 |
- |
|
British Columbia – capitalized stripping2 |
70.0 |
|
Total sustaining capital |
290.0 |
218.1 |
243.0 |
235.0 |
|
Growth capital |
|
|
|
|
|
Peru |
2.0 |
12.1 |
10.0 |
10.0 |
|
Manitoba3 |
10.0 |
13.5 |
15.0 |
15.0 |
|
British Columbia |
5.0 |
1.2 |
2.0 |
- |
|
Arizona |
20.0 |
21.3 |
25.0 |
30.0 |
|
Total growth capital |
37.0 |
48.1 |
52.0 |
55.0 |
|
Capitalized exploration |
8.0 |
7.8 |
10.0 |
10.0 |
|
Total capital expenditures |
335.0 |
274.0 |
305.0 |
300.0 |
|
Note: Excludes capitalized costs not considered to be sustaining or
growth capital expenditures.1 Sustaining capital guidance excludes
right-of-use lease additions and additions as a result of equipment
financing arrangements.2 Includes capitalized stripping costs.3
Partially funded by approximately $3 million in Canadian
Development Expense flow-through financing proceeds.4 Capital
expenditures are converted into U.S. dollars using an exchange rate
of 1.35 C$/US$.5 Capital expenditure guidance reflects revised
guidance issued with third quarter results, including lower
anticipated capital spend in Manitoba and Peru, and new British
Columbia guidance. |
|
|
2023 total capital expenditures, excluding
British Columbia, were $57 million, lower than original guidance
expectations as a result of the discretionary capital reductions
across the business. British Columbia capital expenditures were in
line with Hudbay’s 2023 guidance levels.
Total capital expenditures are expected to be
$335 million for 2024. Hudbay expects to continue to reduce
discretionary spending with year-over-year capital reductions in
Peru and Manitoba, while spending in British Columbia will be
focused on stabilization initiatives and accelerated stripping
activities. Discretionary growth spending and capitalized
exploration are expected to remain at low levels in 2024 and
reflect a 20% decrease from 2023.
Peru’s sustaining capital expenditures in 2024
are expected to decrease to $130 million primarily as a result of
lower capitalized stripping. Peru’s growth capital spending of $2
million in 2024 relates to continued mill recovery improvements in
the molybdenum and copper circuits.
Manitoba’s sustaining capital expenditures in
2024 are expected to be consistent with the lower 2023 spending,
primarily due to a continued focus on streamlining costs and less
mine capital development with increased post pillar mining.
Manitoba’s growth capital spending of $10 million in 2024 relates
to the advancement of a development and exploration drift at the
1901 deposit to confirm the optimal mining method for the base
metal and gold lenses and converting the inferred mineral resources
in the gold lenses to mineral reserves. The 1901 growth
expenditures will be partially funded by $3 million in proceeds
from a Canadian Development Expense flow-through financing in
December 2023.
Manitoba spending guidance excludes
approximately $15 million of annual care and maintenance costs
related to the Flin Flon facilities in 2024, which are expected to
be recorded as other operating expenses. The 2024 Flin Flon care
and maintenance costs are 25% lower than prior annual costs as a
result of several cost efficiencies achieved and identified
to-date.
In British Columbia, sustaining capital
expenditures in 2024 are expected to be $35 million for equipment
and building capital. In addition, the company expects to spend
approximately $70 million for capitalized stripping costs in 2024
as it executes an accelerated stripping campaign as part of
Hudbay’s stabilization plan. The 2024 sustaining capital costs
include a reclassification of mining costs from operating expenses
to capitalized costs when compared to the December 2023 Copper
Mountain technical report. This is a result of a change from
contractor mining to owner-operating mining as a more
cost-effective approach for the additional required stripping, as
well as the elimination of mining low-grade ore to stockpile in
2024 which increases the strip ratio and allocation of mining costs
to capitalized stripping despite lowering the overall tonnes moved.
This change lowers the cost per tonne moved and in turn the
expected cash costs for British Columbia in 2024, as noted above,
but the total aggregate operating and capital costs for 2024 are
expected to be in line with the December 2023 technical report.
Arizona growth capital spending of $20 million
includes annual carrying and permitting costs for the Copper World
and Mason projects for 2024.
Exploration Guidance
|
Exploration Expenditures(in $ millions) |
2024 Guidance |
Year EndedDec. 31, 2023 |
2023 Guidance |
|
Peru1 |
17.0 |
15.2 |
15.0 |
|
Manitoba2 |
23.0 |
10.4 |
15.0 |
|
British Columbia |
2.0 |
3.9 |
— |
|
Arizona and other |
1.0 |
2.4 |
— |
|
Total exploration expenditures |
43.0 |
31.9 |
30.0 |
|
Capitalized spending |
(8.0) |
(7.8) |
(10.0) |
|
Total exploration expense |
35.0 |
24.1 |
20.0 |
1 2023 exploration guidance excludes $5 million
of non-cash amortization of community agreements for exploration
properties.2 Partially funded by approximately $11 million in
Canadian Exploration Expense flow-through financing proceeds.
Total expected exploration expenditures of $43
million in 2024 are 35% higher than 2023 spending primarily due to
an extensive drilling program underway in Snow Lake, Manitoba. The
company’s 2024 exploration activities are focused on areas with
high potential for new discovery and mineral reserve and resource
expansion.
In Peru, 2024 exploration activities will
continue to focus on permitting and drill preparation for the Maria
Reyna and Caballito properties near Constancia. In Manitoba, the
company has initiated the largest exploration program in its
history in Snow Lake focused on testing the deep extensions of the
gold and copper zones at Lalor, the Lalor Northwest target, the
newly acquired Cook Lake claims and the former Rockcliff
properties. The company intends to complete geophysical surveys on
the new land package in the Snow Lake area to generate additional
targets with plans to start drilling those targets later in 2024. A
portion of the 2024 Manitoba exploration program will be funded by
$11 million in proceeds from a critical minerals premium
flow-through financing completed in December 2023. Hudbay issued
1,310,000 Canadian Exploration Expense (“CEE”) flow-through common
shares (“Flow-Through Common Shares”) of the company, at a price of
C$11.50 per CEE Flow-Through Common Share, representing a premium
of approximately 85%.
Dividend Declared
A semi-annual dividend of C$0.01 per share was
declared on February 22, 2024. The dividend will be paid out on
March 22, 2024 to shareholders of record as of March 5, 2024.
Website Links
Hudbay:
www.hudbay.com
Management’s Discussion and Analysis:
https://www.hudbayminerals.com/MDA0224
Financial Statements:
https://www.hudbayminerals.com/FS0224
Conference Call and Webcast
|
Date: |
Friday, February 23, 2024 |
|
Time: |
11:00 a.m. ET |
|
Webcast: |
www.hudbay.com |
|
Dial in: |
1-416-764-8650 or 1-888-664-6383RapidConnect |
|
|
|
Qualified Person and NI 43-101
The technical and scientific information in this
news release related to the company’s material mineral projects has
been approved by Olivier Tavchandjian, P. Geo, Senior Vice
President, Exploration and Technical Services. Mr. Tavchandjian is
a qualified person pursuant to National Instrument 43-101 –
Standards of Disclosure for Mineral Projects (“NI 43-101”).
For a description of the key assumptions,
parameters and methods used to estimate mineral reserves and
resources at Hudbay's material properties, as well as data
verification procedures and a general discussion of the extent to
which the estimates of scientific and technical information may be
affected by any known environmental, permitting, legal title,
taxation, sociopolitical, marketing or other relevant factors,
please see the technical reports for the company’s material
properties as filed by Hudbay on SEDAR+ at www.sedarplus.ca and
EDGAR at www.sec.gov.
Non-IFRS Financial Performance
Measures
Adjusted net earnings (loss), adjusted net
earnings (loss) per share, adjusted EBITDA, net debt, cash cost,
sustaining and all-in sustaining cash cost per pound of copper
produced, cash cost and sustaining cash cost per ounce of gold
produced, combined unit costs and ratios based on these measures
are non-IFRS performance measures. These measures do not have a
meaning prescribed by IFRS and are therefore unlikely to be
comparable to similar measures presented by other issuers. These
measures should not be considered in isolation or as a substitute
for measures prepared in accordance with IFRS and are not
necessarily indicative of operating profit or cash flow from
operations as determined under IFRS. Other companies may calculate
these measures differently.
Management believes adjusted net earnings (loss)
and adjusted net earnings (loss) per share provides an alternate
measure of the company’s performance for the current period and
gives insight into its expected performance in future periods.
These measures are used internally by the company to evaluate the
performance of its underlying operations and to assist with its
planning and forecasting of future operating results. As such, the
company believes these measures are useful to investors in
assessing the company’s underlying performance. Hudbay provides
adjusted EBITDA to help users analyze the company’s results and to
provide additional information about its ongoing cash generating
potential in order to assess its capacity to service and repay
debt, carry out investments and cover working capital needs. Net
debt is shown because it is a performance measure used by the
company to assess its financial position. Net debt to adjusted
EBITDA is shown because it is a performance measure used by the
company to assess its financial leverage and debt capacity. Cash
cost, sustaining and all-in sustaining cash cost per pound of
copper produced are shown because the company believes they help
investors and management assess the performance of its operations,
including the margin generated by the operations and the company.
Cash cost and sustaining cash cost per ounce of gold produced are
shown because the company believes they help investors and
management assess the performance of its Manitoba operations.
Combined unit cost is shown because Hudbay believes it helps
investors and management assess the company’s cost structure and
margins that are not impacted by variability in by-product
commodity prices.
The following tables provide detailed
reconciliations to the most comparable IFRS measures.
Adjusted Net Earnings (Loss) Reconciliation
|
|
Three Months Ended |
|
(in $ millions) |
Dec. 31, 2023 |
Sep. 30, 2023 |
Dec. 31, 2022 |
|
Profit (loss) for the period |
33.5 |
|
45.5 |
|
(17.4 |
) |
|
Tax expense |
47.5 |
|
38.7 |
|
3.1 |
|
|
Profit (loss) before tax |
81.0 |
|
84.2 |
|
(14.3 |
) |
|
Adjusting items: |
|
|
|
|
Mark-to-market adjustments 1 |
12.7 |
|
1.3 |
|
10.7 |
|
|
Foreign exchange (gain) loss |
4.2 |
|
(0.6 |
) |
0.2 |
|
|
Inventory adjustments |
1.4 |
|
— |
|
— |
|
|
Premium paid on redemption of notes |
2.2 |
|
— |
|
— |
|
|
Re-evaluation adjustment - environmental provision3 |
34.0 |
|
(32.4 |
) |
13.5 |
|
|
Acquisition related costs |
— |
|
0.1 |
|
— |
|
|
Evaluation expenses |
— |
|
— |
|
0.1 |
|
|
Insurance recovery |
(4.2 |
) |
— |
|
— |
|
|
Value-added-tax recovery |
(3.9 |
) |
— |
|
— |
|
|
Write off fair value of the Copper Mountain Bonds |
(1.0 |
) |
— |
|
— |
|
|
Restructuring charges 2 |
0.6 |
|
2.3 |
|
1.0 |
|
|
Loss on disposal of investments |
— |
|
— |
|
0.5 |
|
|
Post-employment plan curtailment |
— |
|
— |
|
(2.4 |
) |
|
Loss on disposal of plant and equipment and non-current assets |
6.6 |
|
— |
|
0.4 |
|
|
Changes in other provisions (non-capital) 4 |
— |
|
— |
|
5.8 |
|
|
Adjusted earnings (loss) before income taxes |
134.1 |
|
54.9 |
|
15.5 |
|
|
Tax expense |
(47.5 |
) |
(38.7 |
) |
(3.1 |
) |
|
Tax impact on adjusting items |
(14.8 |
) |
8.2 |
|
(9.8 |
) |
|
Adjusted net earnings |
71.3 |
|
24.4 |
|
2.6 |
|
|
Adjusted net earnings ($/share) |
0.20 |
|
0.07 |
|
0.01 |
|
|
Basic weighted average number of common shares outstanding
(millions) |
349.1 |
|
346.7 |
|
262.0 |
|
1 Includes changes in fair value of the gold prepayment
liability, Canadian junior mining investments, other financial
assets and liabilities at fair value through profit or loss and
share-based compensation expenses.2 Includes closure cost for the
Flin Flon operations in 2022 and restructuring charges for British
Columbia in 2023.3 Changes from movements to environmental
reclamation provisions are primarily related to the Flin Flon
operations, which were fully depreciated as of June 30, 2022, as
well as other Manitoba and British Columbia non-operating sites.4
Includes changes in other provisions related to corporate
restructuring costs and costs which do not pertain to
operations.
|
|
Year Ended |
|
(in $ millions) |
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Profit for the period |
69.5 |
|
70.4 |
|
|
Tax expense |
82.3 |
|
25.4 |
|
|
Profit before tax |
151.8 |
|
95.8 |
|
|
Adjusting items: |
|
|
|
Mark-to-market adjustments 1 |
21.4 |
|
3.0 |
|
|
Foreign exchange loss (gain) |
5.3 |
|
(5.4 |
) |
|
Inventory adjustments |
2.3 |
|
3.6 |
|
|
Variable consideration adjustment - stream revenue and
accretion |
(5.0 |
) |
(1.9 |
) |
|
Premium paid on redemption of notes |
2.2 |
|
— |
|
|
Impairment - Arizona |
— |
|
95.0 |
|
|
Re-evaluation adjustment - environmental provision3 |
(11.4 |
) |
(133.5 |
) |
|
Acquisition related costs |
6.9 |
|
— |
|
|
Evaluation expenses |
— |
|
7.9 |
|
|
Insurance recovery |
(4.2 |
) |
(5.7 |
) |
|
Value-added-tax recovery |
(3.9 |
) |
— |
|
|
Write off fair value of the Copper Mountain Bonds |
(1.0 |
) |
— |
|
|
Restructuring charges 2 |
2.9 |
|
10.6 |
|
|
Loss on disposal of investments |
0.7 |
|
3.6 |
|
|
Post-employment plan curtailment |
— |
|
(2.4 |
) |
|
Loss (gain) on disposal of plant and equipment and non-current
assets |
7.4 |
|
(6.3 |
) |
|
Changes in other provisions (non-capital) 4 |
— |
|
5.8 |
|
|
Adjusted earnings before income taxes |
175.4 |
|
70.1 |
|
|
Tax expense |
(82.3 |
) |
(25.4 |
) |
|
Tax impact on adjusting items |
(20.6 |
) |
(18.3 |
) |
|
Adjusted net earnings |
72.5 |
|
26.4 |
|
|
Adjusted net earnings ($/share) |
0.23 |
|
0.10 |
|
|
Basic weighted average number of common shares outstanding
(millions) |
310.8 |
|
261.9 |
|
1 Includes changes in fair value of the gold prepayment
liability, Canadian junior mining investments, other financial
assets and liabilities at fair value through profit or loss and
share-based compensation expenses.2 Includes closure cost for the
Flin Flon operations and restructuring charges for British Columbia
in 2023.3 Changes from movements to environmental reclamation
provisions are primarily related to the Flin Flon operations, which
were fully depreciated as of June 30, 2023, as well as other
Manitoba and British Columbia non-operating sites.4 Includes
changes in other provisions related to corporate restructuring
costs and costs which do not pertain to operations.
Adjusted EBITDA Reconciliation
|
|
Three Months Ended |
|
(in $ millions) |
Dec. 31, 2023 |
Sep. 30, 2023 |
Dec. 31, 2022 |
|
Profit (loss) for the period |
33.5 |
|
45.5 |
|
(17.4 |
) |
|
Add back: |
|
|
|
|
Tax expense (recovery) |
47.5 |
|
38.7 |
|
3.1 |
|
|
Net finance expense |
48.9 |
|
30.9 |
|
36.7 |
|
|
Other expenses |
10.6 |
|
8.9 |
|
18.5 |
|
|
Depreciation and amortization |
121.9 |
|
113.8 |
|
79.4 |
|
|
Amortization of deferred revenue and variable consideration
adjustment |
(26.5 |
) |
(16.8 |
) |
(10.4 |
) |
|
|
235.9 |
|
221.0 |
|
109.9 |
|
|
Adjusting items (pre-tax): |
|
|
|
|
Re-evaluation adjustment - environmental provision |
34.0 |
|
(32.4 |
) |
13.5 |
|
|
Inventory adjustments |
1.4 |
|
— |
|
— |
|
|
Post-employment plan curtailment |
— |
|
— |
|
(2.4 |
) |
|
Share-based compensation expense 1 |
3.1 |
|
2.1 |
|
3.7 |
|
|
Adjusted EBITDA |
274.4 |
|
190.7 |
|
124.7 |
|
1 Share-based compensation expenses reflected in
cost of sales and selling and administrative expenses.
|
|
Year Ended |
|
(in $ millions) |
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Profit (loss) for the period |
69.5 |
|
70.4 |
|
|
Add back: |
|
|
|
Tax expense |
82.3 |
|
25.4 |
|
|
Net finance expense |
145.3 |
|
118.5 |
|
|
Other expenses |
38.2 |
|
32.6 |
|
|
Depreciation and amortization |
391.7 |
|
337.6 |
|
|
Amortization of deferred revenue and variable consideration
adjustment |
(77.3 |
) |
(73.2 |
) |
|
|
649.8 |
|
511.3 |
|
|
Adjusting items (pre-tax): |
|
|
|
Impairment losses |
— |
|
95.0 |
|
|
Re-evaluation adjustment - environmental provision |
(11.4 |
) |
(133.5 |
) |
|
Inventory adjustments |
2.3 |
|
3.6 |
|
|
Post-employment plan curtailment |
— |
|
(2.4 |
) |
|
Share-based compensation expenses 1 |
7.1 |
|
1.9 |
|
|
Adjusted EBITDA |
647.8 |
|
475.9 |
|
1 Share-based compensation expenses reflected in
cost of sales and selling and administrative expenses.Net Debt
Reconciliation
|
(in $ thousands) |
|
|
|
Dec. 31, 2023 |
Sep. 30, 2023 |
Dec. 31, 2022 |
|
Total long-term debt |
1,287,536 |
1,377,443 |
1,184,162 |
|
Less: Cash and cash equivalents |
249,794 |
245,217 |
225,665 |
|
Net debt |
1,037,742 |
1,132,226 |
958,497 |
|
(in $ millions, except net debt to adjusted EBITDA ratio) |
|
|
|
|
Net debt |
1,037.7 |
1,132.2 |
958.5 |
|
Adjusted EBITDA (12 month period) |
647.8 |
498.5 |
475.9 |
|
Net debt to adjusted EBITDA |
1.6 |
2.3 |
2.0 |
|
Trailing Adjusted EBITDA |
Three Months Ended |
LTM1 |
|
(in $ millions) |
Sep. 30, 2023 |
Jun. 30, 2023 |
Mar. 31, 2023 |
Sep. 30, 2023 |
|
Profit (loss) for the period |
45.5 |
|
(14.9 |
) |
5.4 |
|
(17.4 |
) |
18.6 |
|
|
Add back: |
|
|
|
|
|
|
Tax expense (recovery) |
38.7 |
|
(15.8 |
) |
12.0 |
|
3.1 |
|
38.0 |
|
|
Net finance expense |
30.9 |
|
30.5 |
|
35.0 |
|
36.7 |
|
133.1 |
|
|
Other expenses |
8.9 |
|
13.9 |
|
5.0 |
|
18.5 |
|
46.3 |
|
|
Depreciation and amortization |
113.8 |
|
88.7 |
|
67.4 |
|
79.4 |
|
349.3 |
|
|
Amortization of deferred revenue and variable consideration
adjustment |
(16.8 |
) |
(18.1 |
) |
(15.9 |
) |
(10.4 |
) |
(61.2 |
) |
| Adjusting items
(pre-tax): |
|
|
|
|
|
|
Re-evaluation adjustment - environmental provision |
(32.4 |
) |
(4.7 |
) |
(8.2 |
) |
13.5 |
|
(31.8 |
) |
|
Inventory adjustments |
- |
|
0.9 |
|
- |
|
- |
|
0.9 |
|
|
Post-employment plan curtailment |
- |
|
- |
|
- |
|
(2.4 |
) |
(2.4 |
) |
|
Share-based compensation expenses2 |
2.1 |
|
0.7 |
|
1.2 |
|
3.7 |
|
7.7 |
|
|
Adjusted EBITDA |
190.7 |
|
81.2 |
|
101.9 |
|
124.7 |
|
498.5 |
|
1 LTM (last twelve months) as of September 30,
2023.2 Share-based compensation expense reflected in cost of sales
and administrative expenses.
Copper Cash Cost Reconciliation
|
Consolidated |
Three Months Ended |
|
Net pounds of copper produced1 |
|
|
|
|
(in thousands) |
Dec. 31, 2023 |
Sep. 30, 2023 |
Dec. 31, 2022 |
|
Peru |
73,209 |
64,112 |
59,628 |
|
British Columbia2 |
18,755 |
20,510 |
— |
|
Manitoba |
8,234 |
7,893 |
4,978 |
|
Net pounds of copper produced |
100,198 |
92,515 |
64,606 |
|
Consolidated |
Year Ended |
|
Net pounds of copper produced1 |
|
|
|
(in thousands) |
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Peru |
221,536 |
197,082 |
|
British Columbia2 |
41,995 |
— |
|
Manitoba |
26,795 |
32,580 |
|
Net pounds of copper produced |
290,326 |
229,662 |
1 Contained copper in concentrate.2 Includes
100% of Copper Mountain mine production, Hudbay owns 75% of Copper
Mountain mine. As Copper Mountain was acquired on June 20, 2023,
there were no comparative 2022 figures.
|
Consolidated |
Three Months Ended |
|
|
Dec. 31, 2023 |
Sep. 30, 2023 |
Dec. 31, 2022 |
|
Cash cost per pound of copper produced |
$000s |
$/lb |
$000s |
$/lb |
$000s |
$/lb |
|
Mining |
89,587 |
|
0.89 |
|
104,547 |
|
1.13 |
|
79,759 |
|
1.23 |
|
|
Milling |
90,763 |
|
0.91 |
|
88,021 |
|
0.95 |
|
65,591 |
|
1.02 |
|
|
G&A |
38,937 |
|
0.39 |
|
36,107 |
|
0.39 |
|
21,269 |
|
0.33 |
|
|
Onsite costs |
219,287 |
|
2.19 |
|
228,675 |
|
2.47 |
|
166,619 |
|
2.58 |
|
|
Treatment & refining |
35,665 |
|
0.36 |
|
32,882 |
|
0.36 |
|
19,968 |
|
0.31 |
|
|
Freight & other |
32,273 |
|
0.32 |
|
26,853 |
|
0.29 |
|
22,055 |
|
0.34 |
|
|
Cash cost, before by-product credits |
287,225 |
|
2.87 |
|
288,410 |
|
3.12 |
|
208,642 |
|
3.23 |
|
|
By-product credits |
(271,738 |
) |
(2.71 |
) |
(187,023 |
) |
(2.02 |
) |
(138,990 |
) |
(2.15 |
) |
|
Cash cost, net of by-product credits |
15,487 |
|
0.16 |
|
101,387 |
|
1.10 |
|
69,652 |
|
1.08 |
|
|
Consolidated |
Year Ended |
|
|
|
|
|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Cash cost per pound of copper produced |
|
|
$000s |
$/lb |
$000s |
$/lb |
|
Mining |
|
|
332,007 |
|
1.14 |
|
330,250 |
|
1.44 |
|
|
Milling |
|
|
309,692 |
|
1.07 |
|
269,055 |
|
1.17 |
|
|
Refining (zinc) |
|
|
— |
|
— |
|
32,755 |
|
0.14 |
|
|
G&A |
|
|
122,574 |
|
0.42 |
|
125,454 |
|
0.55 |
|
|
Onsite costs |
|
|
764,273 |
|
2.63 |
|
757,514 |
|
3.30 |
|
|
Treatment & refining |
|
|
113,712 |
|
0.39 |
|
68,936 |
|
0.29 |
|
|
Freight & other |
|
|
94,668 |
|
0.33 |
|
79,815 |
|
0.35 |
|
|
Cash cost, before by-product credits |
|
|
972,653 |
|
3.35 |
|
906,265 |
|
3.94 |
|
|
By-product credits |
|
|
(741,288 |
) |
(2.55 |
) |
(708,334 |
) |
(3.08 |
) |
|
Cash cost, net of by-product credits |
|
|
231,365 |
|
0.80 |
|
197,931 |
|
0.86 |
|
|
Consolidated |
Three Months Ended |
|
|
Dec. 31, 2023 |
Sep. 30, 2023 |
Dec. 31, 2022 |
|
Supplementary cash cost information |
$000s |
$/lb1 |
$000s |
$/lb1 |
$000s |
$/lb1 |
|
By-product credits2: |
|
|
|
|
|
|
|
Zinc |
18,474 |
|
0.18 |
17,099 |
|
0.18 |
24,744 |
|
0.38 |
|
Gold3 |
216,178 |
|
2.16 |
129,954 |
|
1.41 |
76,336 |
|
1.18 |
|
Silver3 |
22,698 |
|
0.23 |
16,724 |
|
0.18 |
9,592 |
|
0.15 |
|
Molybdenum & other |
14,388 |
|
0.14 |
23,246 |
|
0.25 |
28,318 |
|
0.44 |
|
Total by-product credits |
271,738 |
|
2.71 |
187,023 |
|
2.02 |
138,990 |
|
2.15 |
|
Reconciliation to IFRS: |
|
|
|
|
|
|
|
Cash cost, net of by-product credits |
15,487 |
|
|
101,387 |
|
|
69,652 |
|
|
|
By-product credits |
271,738 |
|
|
187,023 |
|
|
138,990 |
|
|
|
Treatment and refining charges |
(35,665 |
) |
|
(32,882 |
) |
|
(19,968 |
) |
|
|
Share-based compensation expense |
301 |
|
|
149 |
|
|
490 |
|
|
|
Inventory adjustments |
1,402 |
|
|
— |
|
|
7 |
|
|
|
Post employment plan curtailment |
— |
|
|
— |
|
|
(2,384 |
) |
|
|
Change in product inventory |
29,326 |
|
|
3,374 |
|
|
(16,425 |
) |
|
|
Royalties |
1,032 |
|
|
1,253 |
|
|
1,750 |
|
|
|
Depreciation and amortization4 |
121,812 |
|
|
113,753 |
|
|
79,408 |
|
|
|
Cost of sales5 |
405,433 |
|
|
374,057 |
|
|
251,520 |
|
|
1 Per pound of copper produced.2 By-product
credits are computed as revenue per consolidated financial
statements, amortization of deferred revenue and pricing and volume
adjustments.3 Gold and silver by-product credits do not include
variable consideration adjustments with respect to stream
arrangements. Variable consideration adjustments are cumulative
adjustments to gold and silver stream deferred revenue primarily
associated with the net change in mineral reserves and resources or
amendments to the mine plan that would change the total expected
deliverable ounces under the precious metal streaming arrangement.
For the three months ended December 31, 2023, September 30, 2023
and December 31, 2022 the variable consideration adjustments
amounted to nil. 4 Depreciation is based on concentrate sold.5 As
per IFRS consolidated financial statements excluding impairment
adjustments.
|
Consolidated |
Year Ended |
|
|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Supplementary cash cost information |
$000s |
$/lb1 |
$000s |
$/lb1 |
|
By-product credits2: |
|
|
|
|
|
Zinc |
74,842 |
|
0.26 |
224,043 |
|
0.98 |
|
Gold3 |
525,637 |
|
1.80 |
353,478 |
|
1.53 |
|
Silver3 |
68,701 |
|
0.24 |
62,252 |
|
0.27 |
|
Molybdenum & other |
72,108 |
|
0.25 |
68,561 |
|
0.30 |
|
Total by-product credits |
741,288 |
|
2.55 |
708,334 |
|
3.08 |
|
Reconciliation to IFRS: |
|
|
|
|
|
Cash cost, net of by-product credits |
231,365 |
|
|
197,931 |
|
|
|
By-product credits |
741,288 |
|
|
708,334 |
|
|
|
Treatment and refining charges |
(113,712 |
) |
|
(68,936 |
) |
|
|
Share-based compensation expense |
589 |
|
|
420 |
|
|
|
Inventory adjustments |
2,308 |
|
|
3,553 |
|
|
|
Post employment plan curtailment |
— |
|
|
(2,384 |
) |
|
|
Change in product inventory |
38,405 |
|
|
(3,125 |
) |
|
|
Royalties |
5,569 |
|
|
11,144 |
|
|
|
Depreciation and amortization4 |
391,657 |
|
|
337,615 |
|
|
|
Cost of sales5 |
1,297,469 |
|
|
1,184,552 |
|
|
1 Per pound of copper produced.2 By-product
credits are computed as revenue per consolidated financial
statements, including amortization of deferred revenue and pricing
and volume adjustments.3 Gold and silver by-product credits do not
include variable consideration adjustments with respect to stream
arrangements. Variable consideration adjustments are cumulative
adjustments to gold and silver stream deferred revenue primarily
associated with the net change in mineral reserves and resources or
amendments to the mine plan that would change the total expected
deliverable ounces under the precious metal streaming arrangement.
For the year ended December 31, 2023 the variable consideration
adjustments amounted income of $4,885 (year ended December 31, 2022
- income of $959)4 Depreciation is based on concentrate sold.5 As
per IFRS consolidated financial statements, excluding impairment
adjustments.
|
Peru |
Three Months Ended |
|
(in thousands) |
Dec. 31, 2023 |
Sep. 30, 2023 |
Dec. 31, 2022 |
|
Net pounds of copper produced1 |
73,209 |
64,112 |
59,628 |
1 Contained copper in concentrate.
|
Peru |
Year Ended |
|
(in thousands) |
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Net pounds of copper produced1 |
221,536 |
197,082 |
1 Contained copper in concentrate.
|
Peru |
Three Months Ended |
|
|
Dec. 31, 2023 |
Sep. 30, 2023 |
Dec. 31, 2022 |
|
Cash cost per pound of copper produced |
$000s |
$/lb |
$000s |
$/lb |
$000s |
$/lb |
|
Mining |
30,336 |
|
0.41 |
|
33,875 |
|
0.53 |
|
41,647 |
|
0.70 |
|
|
Milling |
50,199 |
|
0.69 |
|
46,996 |
|
0.73 |
|
50,723 |
|
0.85 |
|
|
G&A |
24,909 |
|
0.34 |
|
20,912 |
|
0.33 |
|
14,817 |
|
0.25 |
|
|
Onsite costs |
105,444 |
|
1.44 |
|
101,783 |
|
1.59 |
|
107,187 |
|
1.80 |
|
|
Treatment & refining |
19,626 |
|
0.27 |
|
19,143 |
|
0.30 |
|
11,962 |
|
0.20 |
|
|
Freight & other |
20,854 |
|
0.28 |
|
17,040 |
|
0.26 |
|
15,607 |
|
0.26 |
|
|
Cash cost, before by-product credits |
145,924 |
|
1.99 |
|
137,966 |
|
2.15 |
|
134,756 |
|
2.26 |
|
|
By-product credits |
(106,227 |
) |
(1.45 |
) |
(84,793 |
) |
(1.32 |
) |
(54,563 |
) |
(0.92 |
) |
|
Cash cost, net of by-product credits |
39,697 |
|
0.54 |
|
53,173 |
|
0.83 |
|
80,193 |
|
1.34 |
|
|
Peru |
Year Ended |
|
|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Cash cost per pound of copper produced |
$000s |
$/lb |
$000s |
$/lb |
|
Mining |
122,651 |
|
0.55 |
|
137,546 |
|
0.70 |
|
|
Milling |
198,062 |
|
0.90 |
|
195,152 |
|
0.99 |
|
|
G&A |
77,154 |
|
0.35 |
|
63,015 |
|
0.32 |
|
|
Onsite costs |
397,867 |
|
1.80 |
|
395,713 |
|
2.01 |
|
|
Treatment & refining |
66,469 |
|
0.30 |
|
39,587 |
|
0.20 |
|
|
Freight & other |
62,745 |
|
0.28 |
|
50,284 |
|
0.25 |
|
|
Cash cost, before by-product credits |
527,081 |
|
2.38 |
|
485,584 |
|
2.46 |
|
|
By-product credits |
(289,112 |
) |
(1.31 |
) |
(173,488 |
) |
(0.88 |
) |
|
Cash cost, net of by-product credits |
237,969 |
|
1.07 |
|
312,096 |
|
1.58 |
|
|
Peru |
Three Months Ended |
|
|
Dec. 31, 2023 |
Sep. 30, 2023 |
Dec. 31, 2022 |
|
Supplementary cash cost information |
$000s |
$/lb1 |
$000s |
$/lb1 |
$000s |
$/lb1 |
|
By-product credits2: |
|
|
|
|
|
|
|
Gold3 |
77,517 |
|
1.05 |
51,459 |
|
0.80 |
19,934 |
|
0.33 |
|
Silver3 |
14,322 |
|
0.20 |
10,088 |
|
0.16 |
7,025 |
|
0.12 |
|
Molybdenum |
14,388 |
|
0.20 |
23,246 |
|
0.36 |
27,604 |
|
0.47 |
|
Total by-product credits |
106,227 |
|
1.45 |
84,793 |
|
1.32 |
54,563 |
|
0.92 |
|
Reconciliation to IFRS: |
|
|
|
|
|
|
|
Cash cost, net of by-product credits |
39,697 |
|
|
53,173 |
|
|
80,193 |
|
|
|
By-product credits |
106,227 |
|
|
84,793 |
|
|
54,563 |
|
|
|
Treatment and refining charges |
(19,626 |
) |
|
(19,143 |
) |
|
(11,962 |
) |
|
|
Share-based compensation expenses |
85 |
|
|
45 |
|
|
95 |
|
|
|
Change in product inventory |
8,048 |
|
|
4,137 |
|
|
(15,685 |
) |
|
|
Royalties |
1,456 |
|
|
1,015 |
|
|
1,656 |
|
|
|
Depreciation and amortization4 |
85,722 |
|
|
80,625 |
|
|
58,256 |
|
|
|
Cost of sales5 |
221,609 |
|
|
204,645 |
|
|
167,116 |
|
|
1 Per pound of copper produced.2 By-product
credits are computed as revenue per consolidated financial
statements, including amortization of deferred revenue and pricing
and volume adjustments.3 Gold and silver by-product credits do not
include variable consideration adjustments with respect to stream
arrangements. 4 Depreciation is based on concentrate sold.5 As per
IFRS consolidated financial statements.
|
Peru |
Year Ended |
|
|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Supplementary cash cost information |
$000s |
$/lb1 |
$000s |
$/lb1 |
|
By-product credits2: |
|
|
|
|
|
Gold3 |
169,915 |
|
0.77 |
68,630 |
|
0.35 |
|
Silver3 |
47,328 |
|
0.21 |
41,671 |
|
0.21 |
|
Molybdenum |
71,869 |
|
0.33 |
63,187 |
|
0.32 |
|
Total by-product credits |
289,112 |
|
1.31 |
173,488 |
|
0.88 |
|
Reconciliation to IFRS: |
|
|
|
|
|
Cash cost, net of by-product credits |
237,969 |
|
|
312,096 |
|
|
|
By-product credits |
289,112 |
|
|
173,488 |
|
|
|
Treatment and refining charges |
(66,469 |
) |
|
(39,587 |
) |
|
|
Inventory adjustments |
— |
|
|
(558 |
) |
|
|
Share-based compensation expenses |
145 |
|
|
77 |
|
|
|
Change in product inventory |
28,128 |
|
|
(31,348 |
) |
|
|
Royalties |
5,615 |
|
|
5,367 |
|
|
|
Depreciation and amortization4 |
275,647 |
|
|
211,043 |
|
|
|
Cost of sales5 |
770,147 |
|
|
630,578 |
|
|
1 Per pound of copper produced.2 By-product
credits are computed as revenue per consolidated financial
statements, including amortization of deferred revenue and pricing
and volume adjustments.3 Gold and silver by-product credits do not
include variable consideration adjustments with respect to stream
arrangements. 4 Depreciation is based on concentrate sold.5 As per
IFRS consolidated financial statements, excluding impairment
adjustments.
|
British Columbia |
Three Months Ended |
Year Ended |
|
(in thousands) |
Dec. 31, 2023 |
Sep. 30, 2023 |
Dec. 31, 2023 |
|
Net pounds of copper produced1 |
18,755 |
20,510 |
41,995 |
1 Contained copper in concentrate.
|
British Columbia |
Three Months Ended |
Year Ended |
|
|
Dec. 31, 2023 |
Sep. 30, 2023 |
Dec. 31, 2023 |
|
Cash cost per pound of copper produced |
$000s |
$/lb |
$000s |
$/lb |
$000s |
$/lb |
|
Mining |
19,015 |
|
1.01 |
|
29,251 |
|
1.43 |
|
48,266 |
|
1.15 |
|
|
Milling |
25,218 |
|
1.35 |
|
24,102 |
|
1.17 |
|
49,320 |
|
1.17 |
|
|
G&A |
5,643 |
|
0.30 |
|
5,050 |
|
0.25 |
|
10,693 |
|
0.25 |
|
|
Onsite costs |
49,876 |
|
2.66 |
|
58,403 |
|
2.85 |
|
108,279 |
|
2.57 |
|
|
Treatment & refining |
4,850 |
|
0.26 |
|
4,905 |
|
0.24 |
|
9,755 |
|
0.23 |
|
|
Freight & other |
4,654 |
|
0.25 |
|
3,693 |
|
0.18 |
|
8,347 |
|
0.20 |
|
|
Cash cost, before by-product credits |
59,380 |
|
3.17 |
|
67,001 |
|
3.27 |
|
126,381 |
|
3.00 |
|
|
By-product credits |
(9,286 |
) |
(0.50 |
) |
(12,234 |
) |
(0.60 |
) |
(21,520 |
) |
(0.51 |
) |
|
Cash cost, net of by-product credits |
50,094 |
|
2.67 |
|
54,767 |
|
2.67 |
|
104,861 |
|
2.49 |
|
|
British Columbia |
Three Months Ended |
Year Ended |
|
|
Dec. 31, 2023 |
Sep. 30, 2023 |
Dec. 31, 2023 |
|
Supplementary cash cost information |
$000s |
$/lb |
$000s |
$/lb |
$000s |
$/lb |
|
By-product credits2: |
|
|
|
|
|
|
|
Gold |
6,876 |
|
0.37 |
10,120 |
|
0.50 |
16,996 |
|
0.40 |
|
Silver |
2,410 |
|
0.13 |
2,114 |
|
0.10 |
4,524 |
|
0.11 |
|
Total by-product credits |
9,286 |
|
0.50 |
12,234 |
|
0.60 |
21,520 |
|
0.51 |
|
Reconciliation to IFRS: |
|
|
|
|
|
|
|
Cash cost, net of by-product credits |
50,094 |
|
|
54,767 |
|
|
104,861 |
|
|
|
By-product credits |
9,286 |
|
|
12,234 |
|
|
21,520 |
|
|
|
Treatment and refining charges |
(4,850 |
) |
|
(4,905 |
) |
|
(9,755 |
) |
|
|
Change in product inventory |
8,469 |
|
|
3 |
|
|
8,472 |
|
|
|
Royalties |
(424 |
) |
|
237 |
|
|
(187 |
) |
|
|
Depreciation and amortization3 |
5,489 |
|
|
6,255 |
|
|
11,744 |
|
|
|
Cost of sales4 |
68,064 |
|
|
68,591 |
|
|
136,655 |
|
|
1 Per pound of copper produced.2 By-product
credits are computed as revenue per consolidated financial
statements, including amortization of deferred revenue and pricing
and volume adjustments.3 Depreciation is based on concentrate
sold.4 As per consolidated financial statements.
Sustaining and All-in Sustaining Cash Cost
Reconciliation
|
Consolidated |
Three Months Ended |
|
|
Dec. 31, 2023 |
Sep. 30, 2023 |
Dec. 31, 2022 |
|
All-in sustaining cash cost per pound of copper
produced |
$000s |
$/lb |
$000s |
$/lb |
$000s |
$/lb |
|
Cash cost, net of by-product credits |
15,487 |
0.15 |
101,387 |
1.10 |
69,652 |
1.08 |
|
Cash sustaining capital expenditures |
87,609 |
0.88 |
72,193 |
0.78 |
60,002 |
0.92 |
|
Capitalized exploration |
5,150 |
0.05 |
— |
— |
11,500 |
0.18 |
|
Royalties |
1,032 |
0.01 |
1,253 |
0.01 |
1,750 |
0.03 |
|
Sustaining cash cost, net of by-product
credits |
109,278 |
1.09 |
174,833 |
1.89 |
142,904 |
2.21 |
|
Corporate selling and administrative expenses & regional
costs |
12,727 |
0.13 |
10,971 |
0.12 |
11,876 |
0.19 |
|
Accretion and amortization of decommissioning and community
agreements1 |
8,967 |
0.09 |
3,309 |
0.03 |
722 |
0.01 |
|
All-in sustaining cash cost, net of by-product
credits |
130,972 |
1.31 |
189,113 |
2.04 |
155,502 |
2.41 |
|
Reconciliation to property, plant and equipment
additions: |
|
|
|
|
|
|
|
Property, plant and equipment additions |
53,680 |
|
77,454 |
|
76,933 |
|
|
Capitalized stripping net additions |
41,221 |
|
21,762 |
|
15,169 |
|
|
Total accrued capital additions |
94,901 |
|
99,216 |
|
92,102 |
|
|
Less other non-sustaining capital costs2 |
19,945 |
|
37,968 |
|
41,850 |
|
|
Total sustaining capital costs |
74,956 |
|
61,248 |
|
50,252 |
|
|
Capitalized lease cash payments - operating sites |
8,708 |
|
7,199 |
|
5,848 |
|
|
Community agreement cash payments |
2,274 |
|
1,953 |
|
2,854 |
|
|
Accretion and amortization of decommissioning and restoration
obligations3 |
1,671 |
|
1,793 |
|
1,048 |
|
|
Cash sustaining capital expenditures |
87,679 |
|
72,193 |
|
60,002 |
|
1 Includes accretion of decommissioning relating
to non-productive sites, and accretion and amortization of current
community agreements.2 Other non-sustaining capital costs include
Arizona capitalized costs, capitalized interest, capitalized
exploration and growth capital expenditures.3 Includes amortization
of decommissioning and restoration PP&E assets and accretion of
decommissioning and restoration liabilities related to producing
sites.
|
Consolidated |
Year Ended |
|
|
|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
All-in sustaining cash cost per pound of copper
produced |
$000s |
$/lb |
$000s |
$/lb |
|
Cash cost, net of by-product credits |
231,365 |
0.80 |
197,931 |
0.86 |
|
Cash sustaining capital expenditures |
255,924 |
0.88 |
255,725 |
1.11 |
|
Capitalized exploration |
5,150 |
0.02 |
11,500 |
0.05 |
|
Royalties |
5,569 |
0.02 |
11,144 |
0.05 |
|
Sustaining cash cost, net of by-product
credits |
498,008 |
1.72 |
476,300 |
2.07 |
|
Corporate selling and administrative expenses & regional
costs |
43,516 |
0.14 |
38,799 |
0.17 |
|
Accretion and amortization of decommissioning and community
agreements1 |
16,036 |
0.06 |
4,416 |
0.02 |
|
All-in sustaining cash cost, net of by-product
credits |
557,560 |
1.92 |
519,515 |
2.26 |
|
Reconciliation to property, plant and equipment additions: |
|
|
|
|
|
Property, plant and equipment additions |
212,261 |
|
259,281 |
|
|
Capitalized stripping net additions |
111,607 |
|
89,262 |
|
|
Total accrued capital additions |
323,868 |
|
348,543 |
|
|
Less other non-sustaining capital costs2 |
105,767 |
|
147,749 |
|
|
Total sustaining capital costs |
218,101 |
|
200,794 |
|
|
Capitalized lease cash payments - operating sites |
24,983 |
|
33,271 |
|
|
Community agreement cash payments |
6,706 |
|
9,486 |
|
|
Accretion and amortization of decommissioning and restoration
obligations3 |
6,165 |
|
12,174 |
|
|
Cash sustaining capital expenditures |
255,994 |
|
255,725 |
|
1 Includes accretion of decommissioning relating
to non-productive sites, and accretion and amortization of current
community agreements.2 Other non-sustaining capital costs include
Arizona capitalized costs, capitalized interest, capitalized
exploration and growth capital expenditures.3 Includes amortization
of decommissioning and restoration PP&E assets and accretion of
decommissioning and restoration liabilities related to producing
sites.
|
Peru |
Three Months Ended |
|
|
Dec. 31, 2023 |
Sep. 30, 2023 |
Dec. 31, 2022 |
|
Sustaining cash cost per pound of copper
produced |
$000s |
$/lb |
$000s |
$/lb |
$000s |
$/lb |
|
Cash cost, net of by-product credits |
39,697 |
0.54 |
53,173 |
0.83 |
80,193 |
1.34 |
|
Cash sustaining capital expenditures |
42,351 |
0.58 |
42,607 |
0.66 |
31,240 |
0.53 |
|
Capitalized exploration1 |
5,150 |
0.07 |
— |
— |
11,500 |
0.19 |
|
Royalties |
1,456 |
0.02 |
1,015 |
0.02 |
1,656 |
0.03 |
|
Sustaining cash cost per pound of copper
produced |
88,654 |
1.21 |
96,795 |
1.51 |
124,589 |
2.09 |
1 Only includes exploration costs incurred for locations near to
existing mine operations.
|
Peru |
Year Ended |
|
|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Sustaining cash cost per pound of copper
produced |
$000s |
$/lb |
$000s |
$/lb |
|
Cash cost, net of by-product credits |
237,969 |
1.07 |
312,096 |
1.58 |
|
Cash sustaining capital expenditures |
151,947 |
0.69 |
133,313 |
0.68 |
|
Capitalized exploration1 |
5,150 |
0.02 |
11,500 |
0.06 |
|
Royalties |
5,615 |
0.03 |
5,367 |
0.03 |
|
Sustaining cash cost per pound of copper
produced |
400,681 |
1.81 |
462,276 |
2.35 |
1 Only includes exploration costs incurred for locations near to
existing mine operations.
|
British Columbia |
Three Months Ended |
Year Ended |
|
|
Dec. 31, 2023 |
Sep. 30, 2023 |
Dec. 31, 2023 |
|
Sustaining cash cost per pound of copper
produced |
$000s |
$/lb |
$000s |
$/lb |
$000s |
$/lb |
|
Cash cost, net of by-product credits |
50,094 |
|
2.67 |
|
54,767 |
2.67 |
104,861 |
|
2.49 |
|
Royalties |
(424 |
) |
(0.02 |
) |
237 |
0.01 |
(187 |
) |
— |
|
Cash sustaining capital expenditures |
24,063 |
|
1.28 |
|
14,487 |
0.71 |
38,550 |
|
0.92 |
|
Sustaining cash cost per pound of copper
produced |
73,733 |
|
3.93 |
|
69,491 |
3.39 |
143,224 |
|
3.41 |
Gold Cash Cost and Sustaining Cash Cost Reconciliation
|
Manitoba |
Three Months Ended |
|
(in thousands) |
Dec. 31, 2023 |
Sep. 30, 2023 |
Dec. 31, 2022 |
|
Net ounces of gold produced1 |
59,863 |
56,213 |
33,060 |
1 Contained gold in concentrate and doré.
|
Manitoba |
Year Ended |
|
(in thousands) |
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Net ounces of gold produced1 |
187,363 |
161,471 |
1 Contained gold in concentrate and doré.
|
Manitoba |
Three Months Ended |
|
|
Dec. 31, 2023 |
Sep. 30, 2023 |
Dec. 31, 2022 |
|
Cash cost per ounce of gold produced |
$000s |
$/oz |
$000s |
$/oz |
$000s |
$/oz |
|
Mining |
40,236 |
|
673 |
|
41,421 |
|
737 |
|
38,112 |
|
1,153 |
|
|
Milling |
15,346 |
|
256 |
|
16,923 |
|
301 |
|
14,868 |
|
450 |
|
|
Refining (Zinc) |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
G&A |
8,385 |
|
140 |
|
10,145 |
|
180 |
|
6,452 |
|
195 |
|
|
Onsite costs |
63,967 |
|
1,069 |
|
68,489 |
|
1,218 |
|
59,432 |
|
1,798 |
|
|
Treatment & refining |
11,189 |
|
186 |
|
8,834 |
|
157 |
|
8,006 |
|
242 |
|
|
Freight & other |
6,765 |
|
113 |
|
6,120 |
|
109 |
|
6,448 |
|
195 |
|
|
Cash cost, before by-product credits |
81,921 |
|
1,368 |
|
83,443 |
|
1,484 |
|
73,886 |
|
2,235 |
|
|
By-product credits |
(55,928 |
) |
(934 |
) |
(45,779 |
) |
(814 |
) |
(43,407 |
) |
(1,313 |
) |
|
Gold cash cost, net of by-product credits |
25,993 |
|
434 |
|
37,664 |
|
670 |
|
30,479 |
|
922 |
|
|
Manitoba |
Year Ended |
|
|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Cash cost per ounce of gold produced |
$000s |
$/oz |
$000s |
$/oz |
|
Mining |
161,090 |
|
860 |
|
192,704 |
|
1,193 |
|
|
Milling |
62,310 |
|
333 |
|
73,903 |
|
458 |
|
|
Refining (zinc) |
— |
|
— |
|
32,755 |
|
203 |
|
|
G&A |
34,727 |
|
185 |
|
62,439 |
|
387 |
|
|
Onsite costs |
258,127 |
|
1,378 |
|
361,801 |
|
2,241 |
|
|
Treatment & refining |
37,488 |
|
200 |
|
29,349 |
|
181 |
|
|
Freight & other |
23,576 |
|
126 |
|
29,531 |
|
183 |
|
|
Cash cost, before by-product credits |
319,191 |
|
1,704 |
|
420,681 |
|
2,605 |
|
|
By-product credits |
(183,056 |
) |
(977 |
) |
(372,783 |
) |
(2,308 |
) |
|
Gold cash cost, net of by-product credits |
136,135 |
|
727 |
|
47,898 |
|
297 |
|
|
Manitoba |
Three Months Ended |
|
|
Dec. 31, 2023 |
Sep. 30, 2023 |
Dec. 31, 2022 |
|
Supplementary cash cost information |
$000s |
$/oz1 |
$000s |
$/oz1 |
$000s |
$/oz1 |
|
By-product credits2: |
|
|
|
|
|
|
|
Copper |
31,489 |
|
526 |
24,158 |
|
430 |
15,382 |
|
465 |
|
Zinc |
18,473 |
|
308 |
17,099 |
|
304 |
24,744 |
|
748 |
|
Silver3 |
5,966 |
|
100 |
4,522 |
|
80 |
2,567 |
|
78 |
|
Other |
— |
|
— |
— |
|
— |
714 |
|
22 |
|
Total by-product credits |
55,928 |
|
934 |
45,779 |
|
814 |
43,407 |
|
1,313 |
|
Reconciliation to IFRS: |
|
|
|
|
|
|
|
Cash cost, net of by-product credits |
25,993 |
|
|
37,664 |
|
|
30,479 |
|
|
|
By-product credits |
55,928 |
|
|
45,779 |
|
|
43,407 |
|
|
|
Treatment and refining charges |
(11,189 |
) |
|
(8,834 |
) |
|
(8,006 |
) |
|
|
Inventory adjustments |
1,402 |
|
|
— |
|
|
7 |
|
|
|
Share-based compensation expenses |
216 |
|
|
104 |
|
|
395 |
|
|
|
Past service curtailment |
— |
|
|
— |
|
|
(2,384 |
) |
|
|
Change in product inventory |
12,809 |
|
|
(766 |
) |
|
(740 |
) |
|
|
Royalties |
— |
|
|
1 |
|
|
94 |
|
|
|
Depreciation and amortization4 |
30,601 |
|
|
26,873 |
|
|
21,152 |
|
|
|
Cost of sales5 |
115,760 |
|
|
100,821 |
|
|
84,404 |
|
|
1 Per ounce of gold produced.2 By-product
credits are computed as revenue per consolidated financial
statements, amortization of deferred revenue and pricing and volume
adjustments.3 Silver by-product credits do not include variable
consideration adjustments with respect to stream arrangements.4
Depreciation is based on concentrate sold.5 As per IFRS
consolidated financial statements, excluding impairment
adjustments.
|
Manitoba |
Year Ended |
|
|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Supplementary cash cost information |
$000s |
$/oz1 |
$000s |
$/oz1 |
|
By-product credits2: |
|
|
|
|
|
Copper |
91,126 |
|
487 |
122,785 |
|
760 |
|
Zinc |
74,842 |
|
399 |
224,043 |
|
1,388 |
|
Silver3 |
16,849 |
|
90 |
20,581 |
|
127 |
|
Other |
239 |
|
1 |
5,374 |
|
33 |
|
Total by-product credits |
183,056 |
|
977 |
372,783 |
|
2,308 |
|
Reconciliation to IFRS: |
|
|
|
|
|
Cash cost, net of by-product credits |
136,135 |
|
|
47,898 |
|
|
|
By-product credits |
183,056 |
|
|
372,783 |
|
|
|
Treatment and refining charges |
(37,488 |
) |
|
(29,349 |
) |
|
|
Inventory adjustments |
2,308 |
|
|
4,111 |
|
|
|
Share-based compensation expenses |
444 |
|
|
343 |
|
|
|
Past service curtailment |
— |
|
|
(2,384 |
) |
|
|
Change in product inventory |
1,805 |
|
|
28,223 |
|
|
|
Royalties |
141 |
|
|
5,777 |
|
|
|
Depreciation and amortization4 |
104,266 |
|
|
126,572 |
|
|
|
Cost of sales5 |
390,667 |
|
|
553,974 |
|
|
1 Per ounce of gold produced.2 By-product
credits are computed as revenue per consolidated financial
statements, amortization of deferred revenue and pricing and volume
adjustments.3 Silver by-product credits do not include variable
consideration adjustments with respect to stream arrangements.4
Depreciation is based on concentrate sold.5 As per IFRS
consolidated financial statements, excluding impairment
adjustments.
|
Manitoba |
Three Months Ended |
|
|
Dec. 31, 2023 |
Sep. 30, 2023 |
Dec. 31, 2022 |
|
Sustaining cash cost per pound of gold
produced |
$000s |
$/oz |
$000s |
$/oz |
$000s |
$/oz |
|
Gold cash cost, net of by-product credits |
25,993 |
434 |
37,664 |
670 |
30,479 |
922 |
|
Cash sustaining capital expenditures |
21,195 |
354 |
15,100 |
269 |
28,762 |
870 |
|
Royalties |
— |
— |
1 |
— |
94 |
3 |
|
Sustaining cash cost per pound of gold
produced |
47,188 |
788 |
52,765 |
939 |
59,335 |
1,795 |
|
Manitoba |
Year Ended |
|
|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Sustaining cash cost per pound of gold
produced |
$000s |
$/oz |
$000s |
$/oz |
| Gold cash
cost, net of by-product credits |
136,135 |
727 |
47,898 |
297 |
| Cash
sustaining capital expenditures |
65,427 |
349 |
122,412 |
758 |
|
Royalties |
141 |
1 |
5,777 |
36 |
|
Sustaining cash cost per pound of gold
produced |
201,703 |
1,077 |
176,087 |
1,091 |
Combined Unit Cost Reconciliation
|
Peru |
Three Months Ended |
|
(in thousands except ore tonnes milled and unit cost per
tonne) |
|
Combined unit cost per tonne processed |
Dec. 31, 2023 |
Sep. 30, 2023 |
Dec. 31, 2022 |
|
Mining |
30,336 |
|
33,875 |
|
41,647 |
|
|
Milling |
50,199 |
|
46,996 |
|
50,723 |
|
|
G&A1 |
24,909 |
|
20,912 |
|
14,817 |
|
|
Other G&A2 |
(8,303 |
) |
(5,440 |
) |
(152 |
) |
|
|
97,141 |
|
96,343 |
|
107,035 |
|
|
Less: Covid related costs |
— |
|
— |
|
689 |
|
|
Unit cost |
97,141 |
|
96,343 |
|
106,346 |
|
|
Tonnes ore milled |
7,939 |
|
7,895 |
|
7,796 |
|
|
Combined unit cost per tonne |
12.24 |
|
12.20 |
|
13.64 |
|
|
Reconciliation to IFRS: |
|
|
|
|
Unit cost |
97,141 |
|
96,343 |
|
106,346 |
|
|
Freight & other |
20,854 |
|
17,040 |
|
15,607 |
|
|
Covid related costs |
— |
|
— |
|
689 |
|
|
Other G&A |
8,303 |
|
5,440 |
|
152 |
|
|
Share-based compensation expenses |
85 |
|
45 |
|
95 |
|
|
Change in product inventory |
8,048 |
|
4,137 |
|
(15,685 |
) |
|
Royalties |
1,456 |
|
1,015 |
|
1,656 |
|
|
Depreciation and amortization |
85,722 |
|
80,625 |
|
58,256 |
|
|
Cost of sales3 |
221,609 |
|
204,645 |
|
167,116 |
|
1 G&A as per cash cost reconciliation
above.2 Other G&A primarily includes profit sharing costs.3 As
per IFRS consolidated financial statements, excluding impairment
adjustments.
|
Peru |
|
Year Ended |
|
(in thousands except ore tonnes milled and unit cost per
tonne) |
|
Combined unit cost per tonne processed |
|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Mining |
|
122,651 |
|
137,546 |
|
|
Milling |
|
198,062 |
|
195,152 |
|
|
G&A1 |
|
77,154 |
|
63,015 |
|
|
Other G&A2 |
|
(14,824 |
) |
(414 |
) |
|
|
|
383,043 |
|
395,299 |
|
|
Less: Covid related costs |
|
— |
|
5,214 |
|
|
Unit cost |
|
383,043 |
|
390,085 |
|
|
Tonnes ore milled |
|
30,721 |
|
30,522 |
|
|
Combined unit cost per tonne |
|
12.47 |
|
12.78 |
|
|
Reconciliation to IFRS: |
|
|
|
|
Unit cost |
|
383,043 |
|
390,085 |
|
|
Freight & other |
|
62,745 |
|
50,284 |
|
|
Covid related costs |
|
— |
|
5,214 |
|
|
Other G&A |
|
14,824 |
|
414 |
|
|
Share-based compensation expenses |
|
145 |
|
77 |
|
|
Inventory adjustments |
|
— |
|
(558 |
) |
|
Change in product inventory |
|
28,128 |
|
(31,348 |
) |
|
Royalties |
|
5,615 |
|
5,367 |
|
|
Depreciation and amortization |
|
275,647 |
|
211,043 |
|
|
Cost of sales3 |
|
770,147 |
|
630,578 |
|
1 G&A as per cash cost reconciliation
above.2 Other G&A primarily includes profit sharing costs.3 As
per IFRS consolidated financial statements, excluding impairment
adjustments.
|
British Columbia |
Three Months Ended |
Year Ended |
|
(in thousands except unit cost per tonne) |
|
Combined unit cost per tonne processed |
Dec. 31, 2023 |
Sep. 30, 2023 |
Dec. 31, 2023 |
|
Mining |
19,015 |
|
29,251 |
48,266 |
|
|
Milling |
25,218 |
|
24,102 |
49,320 |
|
|
G&A1 |
5,643 |
|
5,050 |
10,693 |
|
|
Unit cost |
49,876 |
|
58,403 |
108,279 |
|
|
USD/CAD implicit exchange rate |
1.37 |
|
1.35 |
1.36 |
|
|
Unit cost - C$ |
68,168 |
|
78,566 |
146,734 |
|
|
Tonnes ore milled |
3,262 |
|
3,158 |
6,862 |
|
|
Combined unit cost per tonne - C$ |
20.90 |
|
24.88 |
21.38 |
|
|
Reconciliation to IFRS: |
|
|
|
|
Unit cost |
49,876 |
|
58,403 |
108,279 |
|
|
Freight & other |
4,654 |
|
3,693 |
8,347 |
|
|
Change in product inventory |
8,469 |
|
3 |
8,472 |
|
|
Royalties |
(424 |
) |
237 |
(187 |
) |
|
Depreciation and amortization |
5,489 |
|
6,255 |
11,744 |
|
|
Cost of sales2 |
68,064 |
|
68,591 |
136,655 |
|
1 G&A as per cash cost reconciliation above2 Other G&A
primarily includes profit sharing costs.3 As per consolidated
financial statements.
|
Manitoba |
Three Months Ended |
|
(in thousands except tonnes ore milled and unit cost per
tonne) |
|
Combined unit cost per tonne processed |
Dec. 31, 2023 |
Sep. 30, 2023 |
Dec. 31, 2022 |
|
Mining |
40,236 |
|
41,421 |
|
38,112 |
|
|
Milling |
15,346 |
|
16,923 |
|
14,868 |
|
|
G&A1 |
8,385 |
|
10,145 |
|
6,452 |
|
|
Less: Other G&A related to profit sharing costs |
(1,522 |
) |
(3,308 |
) |
1,939 |
|
|
Unit cost |
62,445 |
|
65,181 |
|
61,371 |
|
|
USD/CAD implicit exchange rate |
1.36 |
|
1.34 |
|
1.36 |
|
|
Unit cost - C$ |
85,013 |
|
87,363 |
|
83,363 |
|
|
Tonnes ore milled |
393,837 |
|
402,443 |
|
345,492 |
|
|
Combined unit cost per tonne - C$ |
216 |
|
217 |
|
241 |
|
|
Reconciliation to IFRS: |
|
|
|
|
Unit cost |
62,445 |
|
65,181 |
|
61,371 |
|
|
Freight & other |
6,765 |
|
6,120 |
|
6,448 |
|
|
Other G&A related to profit sharing |
1,522 |
|
3,308 |
|
(1,939 |
) |
|
Share-based compensation expenses |
216 |
|
104 |
|
395 |
|
|
Inventory adjustments |
1,402 |
|
— |
|
7 |
|
|
Past service pension/Curtailment |
— |
|
— |
|
(2,384 |
) |
|
Change in product inventory |
12,809 |
|
(766 |
) |
(740 |
) |
|
Royalties |
— |
|
1 |
|
94 |
|
|
Depreciation and amortization |
30,601 |
|
26,873 |
|
21,152 |
|
|
Cost of sales2 |
115,760 |
|
100,821 |
|
84,404 |
|
1 G&A as per cash cost reconciliation
above.2 As per IFRS consolidated financial statements, excluding
impairment adjustments.
|
Manitoba |
|
Year Ended |
|
(in thousands except tonnes ore milled and unit cost per
tonne) |
|
Combined unit cost per tonne processed |
|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Mining |
|
161,090 |
|
192,704 |
|
|
Milling |
|
62,310 |
|
73,903 |
|
|
G&A1 |
|
34,727 |
|
62,439 |
|
|
Less: G&A allocated to zinc metal production and other
areas |
|
— |
|
(6,523 |
) |
|
Less: Other G&A related to profit sharing costs |
|
(6,650 |
) |
(20,075 |
) |
|
Unit cost |
|
251,477 |
|
302,448 |
|
|
USD/CAD implicit exchange rate |
|
1.35 |
|
1.30 |
|
|
Unit cost - C$ |
|
339,229 |
|
391,782 |
|
|
Tonnes ore milled |
|
1,562,479 |
|
2,008,251 |
|
|
Combined unit cost per tonne - C$ |
|
217 |
|
195 |
|
|
Reconciliation to IFRS: |
|
|
|
|
Unit cost |
|
251,477 |
|
302,448 |
|
|
Freight & other |
|
23,576 |
|
29,531 |
|
|
Refined zinc |
|
— |
|
32,755 |
|
|
G&A allocated to zinc metal production |
|
— |
|
6,523 |
|
|
Other G&A related to profit sharing |
|
6,650 |
|
20,075 |
|
|
Share-based compensation expenses |
|
444 |
|
343 |
|
|
Inventory adjustments |
|
2,308 |
|
4,111 |
|
|
Past service pension/Curtailment |
|
— |
|
(2,384 |
) |
|
Change in product inventory |
|
1,805 |
|
28,223 |
|
|
Royalties |
|
141 |
|
5,777 |
|
|
Depreciation and amortization |
|
104,266 |
|
126,572 |
|
|
Cost of sales2 |
|
390,667 |
|
553,974 |
|
1 G&A as per cash cost reconciliation
above.2 As per IFRS consolidated financial statements, excluding
impairment adjustments.
Forward-Looking Information
This news release contains forward-looking
information within the meaning of applicable Canadian and United
States securities legislation. All information contained in this
news release, other than statements of current and historical fact,
is forward-looking information. Often, but not always,
forward-looking information can be identified by the use of words
such as “plans”, “expects”, “budget”, “guidance”, “scheduled”,
“estimates”, “forecasts”, “strategy”, “target”, “intends”,
“objective”, “goal”, “understands”, “anticipates” and “believes”
(and variations of these or similar words) and statements that
certain actions, events or results “may”, “could”, “would”,
“should”, “might” “occur” or “be achieved” or “will be taken” (and
variations of these or similar expressions). All of the
forward-looking information in this news release is qualified by
this cautionary note.
Forward-looking information includes, but is not
limited to, statements with respect to the company’s production,
cost and capital and exploration expenditure guidance, expectations
regarding reductions in discretionary spending and capital
expenditures, the ability of the company to stabilize and optimize
the Copper Mountain mine operation and achieve operating synergies,
the fleet production ramp up plan and the accelerated stripping
strategies at the Copper Mountain site, the ability of the company
to complete business integration activities at the Copper Mountain
mine, the estimated timelines and pre-requisites for sanctioning
the Copper World project and the pursuit of a potential minority
joint venture partner, expectations regarding the permitting
requirements for the Copper World project (including expected
timing for receipt of such applicable permits), the expected
benefits of Manitoba growth initiatives, including the advancement
of the development and exploration drift at the 1901 deposit; the
anticipated use of proceeds from the flow-through financing
completed during the fourth quarter of 2023, the company’s future
deleveraging strategies and the company’s ability to deleverage and
repay debt as needed, expectations regarding the company’s cash
balance and liquidity, the company’s ability to increase the mining
rate at Lalor, the anticipated benefits from completing the Stall
recovery improvement program, expectations regarding the ability to
conduct exploration work and execute on exploration programs on its
properties and to advance related drill plans, including the
advancement of the exploration program at Maria Reyna and
Caballito, the ability to continue mining higher-grade ore in the
Pampacancha pit and the company’s expectations resulting therefrom,
expectations regarding the ability for the company to further
reduce greenhouse gas emissions, the company’s evaluation and
assessment of opportunities to reprocess tailings using various
metallurgical technologies, expectations regarding the prospective
nature of the Maria Reyna and Caballito properties, the anticipated
impact of brownfield and greenfield growth projects on the
company’s performance, anticipated expansion opportunities and
extension of mine life in Snow Lake and the ability for Hudbay to
find a new anchor deposit near the company’s Snow Lake operations,
anticipated future drill programs and exploration activities and
any results expected therefrom, anticipated mine plans, anticipated
metals prices and the anticipated sensitivity of the company’s
financial performance to metals prices, events that may affect its
operations and development projects, anticipated cash flows from
operations and related liquidity requirements, the anticipated
effect of external factors on revenue, such as commodity prices,
estimation of mineral reserves and resources, mine life
projections, reclamation costs, economic outlook, government
regulation of mining operations, and business and acquisition
strategies. Forward-looking information is not, and cannot be, a
guarantee of future results or events. Forward-looking information
is based on, among other things, opinions, assumptions, estimates
and analyses that, while considered reasonable by the company at
the date the forward-looking information is provided, inherently
are subject to significant risks, uncertainties, contingencies and
other factors that may cause actual results and events to be
materially different from those expressed or implied by the
forward-looking information.
The material factors or assumptions that Hudbay
has identified and were applied in drawing conclusions or making
forecasts or projections set out in the forward-looking information
include, but are not limited to:
- the ability to achieve production, cost and capital and
exploration expenditure guidance;
- the ability to achieve discretionary spending reductions
without impacting operations;
- no significant interruptions to operations due to social or
political unrest in the regions Hudbay operates, including the
navigation of the complex political and social environment in
Peru;
- no interruptions to the company’s plans for advancing the
Copper World project, including with respect to timely receipt of
applicable permits;
- the ability for the company to successfully complete the
integration and optimization of the Copper Mountain operations,
achieve operating synergies and develop and maintain good relations
with key stakeholders;
- the ability to execute on its exploration plans, including the
potential ramp up of exploration in respect of the Maria Reyna and
Caballito properties;
- the ability to advance related drill plans;
- 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 company’s ability to deleverage and repay debt as
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 company’s exploration,
development and operational projects and ongoing employee
relations;
- maintaining good relations with the employees at the company’s
operations;
- maintaining good relations with the labour unions that
represent certain of the company’s employees in Manitoba and
Peru;
- maintaining good relations with the communities in which the
company operates, including the neighbouring Indigenous communities
and local governments;
- 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 Indigenous 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, changes in taxation policies 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 related to the ongoing
business integration of Copper Mountain and the process for
designing, implementing and maintaining effective internal controls
for Copper Mountain, the failure to effectively complete the
integration and optimization of the Copper Mountain operations or
to achieve anticipated operating synergies, political and social
risks in the regions Hudbay operates, including the navigation of
the complex political and social environment in Peru, risks
generally associated with the mining industry and the current
geopolitical environment, including future commodity prices,
currency and interest rate fluctuations, energy and consumable
prices, supply chain constraints and general cost escalation in the
current inflationary environment, risks related to the
renegotiation of collective bargaining agreements with the labour
unions representing certain of our employees in Manitoba and Peru,
uncertainties related to the development and operation of the
company’s projects, the risk of an indicator of impairment or
impairment reversal relating to a material mineral property, risks
related to the Copper World project, including in relation to
permitting, project delivery and financing risks, risks related to
the Lalor mine plan, including the ability to convert inferred
mineral resource estimates to higher confidence categories,
dependence on key personnel and employee and union relations, risks
related to political or social instability, unrest or change, risks
in respect of Indigenous and community relations, rights and title
claims, operational risks and hazards, including the cost of
maintaining and upgrading the company's tailings management
facilities and any unanticipated environmental, industrial and
geological events and developments and the inability to insure
against all risks, failure of plant, equipment, processes,
transportation and other infrastructure to operate as anticipated,
compliance with government and environmental regulations, including
permitting requirements and anti-bribery legislation, depletion of
the company’s reserves, volatile financial markets and interest
rates that may affect the company’s ability to obtain additional
financing on acceptable terms, the failure to obtain required
approvals or clearances from government authorities on a timely
basis, uncertainties related to the geology, continuity, grade and
estimates of mineral reserves and resources, and the potential for
variations in grade and recovery rates, uncertain costs of
reclamation activities, the company’s ability to comply with its
pension and other post-retirement obligations, the company’s
ability to abide by the covenants in its debt instruments and other
material contracts, tax refunds, hedging transactions, as well as
the risks discussed under the heading “Risk Factors” in the
company’s most recent Annual Information Form and under the heading
“Financial Risk Management” in the company’s most recent
management’s discussion and analysis, each of which is available on
the company’s SEDAR+ profile at www.sedarplus.ca and the company’s
EDGAR profile at www.sec.gov.
Should one or more risk, uncertainty,
contingency or other factor materialize or should any factor or
assumption prove incorrect, actual results could vary materially
from those expressed or implied in the forward-looking information.
Accordingly, you should not place undue reliance on forward-looking
information. Hudbay does not assume any obligation to update or
revise any forward-looking information after the date of this news
release or to explain any material difference between subsequent
actual events and any forward-looking information, except as
required by applicable law.
Note to United States
Investors
This news release has been prepared in
accordance with the requirements of the securities laws in effect
in Canada, which may differ materially from the requirements of
United States securities laws applicable to U.S. issuers.
About Hudbay
Hudbay (TSX, NYSE: HBM) is a copper-focused
mining company with three long-life operations and a world-class
pipeline of copper growth projects in tier-one mining-friendly
jurisdictions of Canada, Peru and the United States.
Hudbay’s operating portfolio includes the
Constancia mine in Cusco (Peru), the Snow Lake operations in
Manitoba (Canada) and the Copper Mountain mine in British Columbia
(Canada). Copper is the primary metal produced by the company,
which is complemented by meaningful gold production. Hudbay’s
growth pipeline includes the Copper World project in Arizona
(United States), the Mason project in Nevada (United States), the
Llaguen project in La Libertad (Peru) and several expansion and
exploration opportunities near its existing operations.
The value Hudbay creates and the impact it has
is embodied in its purpose statement: “We care about our people,
our communities and our planet. Hudbay provides the metals the
world needs. We work sustainably, transform lives and create better
futures for communities.” Hudbay’s mission is to create sustainable
value and strong returns by leveraging its core strengths in
community relations, focused exploration, mine development and
efficient operations.
For further information, please contact:
Candace BrûléVice President, Investor Relations
(416) 814-4387investor.relations@hudbay.com
____________________i Adjusted net earnings
(loss) and adjusted net earnings (loss) per share; adjusted EBITDA;
cash cost, sustaining cash cost and all-in sustaining cash cost per
pound of copper produced, net of by-product credits; cash cost and
sustaining cash cost per ounce of gold produced, net of by-product
credits; combined unit costs, net debt and any ratios based on
these measures are non-IFRS financial performance measures with no
standardized definition under IFRS. For further information and a
detailed reconciliation, please see the “Non-IFRS Financial
Performance Measures” section of this news release.ii Calculated
using the mid-point of the guidance range.iii Sourced from S&P
Global, August 2023.
Hudbay Minerals (TSX:HBM)
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