DE ACUERDO AL PLAN

EXPOMINA PERU 2014

Una exitosa inversin reciente:
La historia de Constancia

10 de setiembre de 2014

HBM

Cautionary Information
Forward Looking Information
This presentation contains forwardlooking statements and forwardlooking information (collectively, forwardlooking information) within the meaning of applicable
Canadian and United States securities legislation. All information contained in this presentation, other than statements of current and historical fact, is forwardlooking
information. Often, but not always, forwardlooking 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 forwardlooking information in this presentation is qualified by this cautionary note.
Forward looking information includes, but is not limited to, statements with respect to the anticipated timing, mechanics, completion of the subsequent acquisition
transaction to acquire the remaining shares of Augusta Resource Corporation (Augusta) the permitting, development and financing of Augustas Rosemont copper
project (the Rosemont project), Hudbays objectives, strategies, intentions, expectations and guidance and future financial and operating performance and prospects,
production at Hudbays 777, Lalor and Reed mines and initial production from the Constancia project, continued processing at Hudbays Flin Flon concentrator, Snow
Lake concentrator and Flin Flon zinc plant, Hudbays ability to complete the development of Hudbays Lalor and Constancia projects and the anticipated scope and cost
of any development plans for these projects, anticipated timing of Hudbays projects and events that may affect the companys projects, including the anticipated issue
of required licenses and permits, Hudbays expectation that it will receive the remaining deposit amount under its amended precious metals stream transaction with
Silver Wheaton Corp. (Silver Wheaton) and that additional funding will be available if needed under Hudbays standby credit facility for Constancia, the anticipated
effect of external factors on revenue, such as commodity prices, anticipated exploration and development expenditures and activities and the possible success of such
activities, estimation of mineral reserves and resources, mine life projections, timing and amount of estimated future production, reclamation costs, economic outlook,
government regulation of mining operations, and business and acquisition strategies.
Forwardlooking information is not, and cannot be, a guarantee of future results or events. Forwardlooking information is based on, among other things, opinions,
assumptions, estimates and analyses that, while considered reasonable by us at the date the forwardlooking 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
forwardlooking information.
The material factors or assumptions that Hudbay identified and were applied by the company in drawing conclusions or making forecasts or projections set out in the
forward looking information include, but are not limited to: the success of mining, processing, exploration and development activities; the accuracy of geological, mining
and metallurgical estimates; the costs of production; the supply and demand for metals Hudbay produces; no significant and continuing adverse changes in financial
markets, including commodity prices and foreign exchange rates; the supply and availability of reagents for Hudbays concentrators; the supply and availability of
concentrate for Hudbays processing facilities for the companys concentrate; the supply and the availability of third party processing facilities for Hudbays concentrate;
the supply and availability of all forms of energy and fuels at reasonable prices; the availability of transportation services at reasonable prices; no significant
unanticipated operational or technical difficulties; the execution of Hudbays business and growth strategies, including the success of Hudbays strategic investments
and initiatives; the availability of financing for Hudbays exploration and development projects and activities; the ability to complete project targets on time and on budget
and other events that may affect Hudbays ability to develop Hudbays projects; the timing and receipt of various regulatory and governmental approvals; the availability
of personnel for Hudbays exploration, development and operational projects and ongoing employee relations; Hudbays ability to secure required land rights to
complete its Constancia project; maintaining good relations with the communities in which Hudbay operates, including the communities surrounding the Constancia
project and First Nations communities surrounding the Lalor project and Reed mine; no significant unanticipated challenges with stakeholders at Hudbays various
projects, including the companys newly acquired Rosemont project; no significant unanticipated events or changes relating to regulatory, environmental, health and
safety matters; no contests over title to Hudbays properties, including as a result of rights or claimed rights of aboriginal peoples; the timing and possible outcome of
pending litigation and no significant unanticipated litigation; certain tax matters, including, but not limited to current tax laws and regulations and the refund of certain
value added taxes from the Canadian and Peruvian governments; no significant and continuing adverse changes in general economic conditions or conditions in the
financial markets; and the timing and completion of a subsequent acquisition transaction in connection with Hudbays acquisition of Augusta.

EXPOMINA PERU 2014

l 2

Cautionary Information (continued)

Forward Looking Information (continued)
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, the development of the Rosemont project not occurring as planned, the
exercising of dissent and appraisal rights by Augusta shareholders should a subsequent acquisition transaction be undertaken in connection
with Hudbays acquisition of Augusta, Augusta continuing as a majority-owned subsidiary of Hudbay should a subsequent acquisition
transaction not be completed, the inaccuracy of Augustas public disclosure and representations in the support agreement upon which
Hudbays offer to acquire Augusta was predicated, the failure to obtain required approvals or clearances from government authorities on a
timely basis, risks generally associated with the mining industry, such as economic factors (including future commodity prices, currency
fluctuations, energy prices and general cost escalation), uncertainties related to the development and operation of Hudbays projects (including
the impact on project cost and schedule of construction delays and unforeseen risks and other factors beyond the companys control),
depletion of Hudbays reserves, risks related to political or social unrest or change and those in respect of aboriginal and community relations,
rights and title claims, operational risks and hazards, including unanticipated environmental, industrial and geological events and developments
and the inability to insure against all risks, failure of plant, equipment, processes, transportation and other infrastructure to operate as
anticipated, compliance with government and environmental regulations, including permitting requirements and anti-bribery legislation,
dependence on key personnel and employee relations, volatile financial markets that may affect Hudbays ability to obtain financing on
acceptable terms, 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, Hudbays ability to comply with its pension and other postretirement obligations, the companys ability to abide by the covenants in Hudbays debt instruments or other material contracts, tax refunds,
hedging transactions, as well as the risks discussed under the heading Risk Factors in this presentation and Hudbays most recent Annual
Information Form.
Should one or more risk, uncertainty, contingency or other factor materialize or should any factor or assumption prove incorrect, actual results
could vary materially from those expressed or implied in the forward-looking information. Accordingly, you should not place undue reliance on
forward-looking information. Hudbay does not assume any obligation to update or revise any forward-looking information after the date of this
presentation or to explain any material difference between subsequent actual events and any forward-looking information, except as required
by applicable law.

EXPOMINA PERU 2014

l 3

Cautionary Information (continued)

The scientific and technical information in respect of Hudbay contained in this presentation related to the Constancia project has been
prepared by or under the supervision of Cashel Meagher, P.Geo., Hudbays Vice President, South America Business Unit. The scientific and
technical information related to all other sites and projects of Hudbay contained in this presentation has been prepared by or under the
supervision of Robert Carter, P.Eng., Hudbays Director, Technical Services. Messrs. Meagher and Carter are Qualified Persons for the
purposes of NI 43-101 Standards of Disclosure for Mineral Projects. (NI 43-101). The mineral reserve and resource estimates included in
or underlying assumptions referenced in this presentation were prepared in accordance with NI 43-101 and the Canadian Institute on Mining,
Metallurgy and Petroleum Standards on Mineral Resources and Reserves: Definitions and Guidelines. Mineral resources that are not mineral
reserves do not have demonstrated economic viability. For a description of the key assumptions, parameters and methods used to estimate
mineral reserves and resources, as well as data verification procedures and a general discussion of the extent to which the estimates may be
affected by any known environmental, permitting, legal, title, taxation, socio-political, marketing or other relevant factors, please see the
Technical Reports for each of Hudbays properties as filed on SEDAR at www.sedar.com.
The disclosure in this presentation uses mineral resource classification terms and mineral resource estimates that comply with NI 43-101. NI
43-101 establishes standards for all public disclosure a Canadian issuer makes of scientific and technical information concerning mineral
projects. Unless otherwise indicated, all reserve and resource estimates contained herein have been prepared in accordance with NI 43-101.
These standards differ significantly from the mineral reserve disclosure requirements of the SEC set forth in Industry Guide 7. Consequently,
reserve and resource information contained herein is not comparable to similar information that would generally be disclosed by U.S.
companies in accordance with the rules of the SEC.
In particular, the SECs Industry Guide 7 applies different standards in order to classify mineralization as a reserve. As a result, the definitions
of proven and probable reserves used in NI 43-101 differ from the definitions in SEC Industry Guide 7. Under SEC standards, mineralization
may not be classified as a reserve unless the determination has been made that the mineralization could be economically and legally
produced or extracted at the time the reserve determination is made. Among other things, all necessary permits would be required to be in
hand or their issuance imminent in order to classify mineralized material as reserves under the SEC standards. Accordingly, mineral reserve
estimates referred to herein may not qualify as reserves under SEC standards.
In addition, the terms measured mineral resources, indicated mineral resources and inferred mineral resources are used to comply with
the reporting standards in Canada. The SECs Industry Guide 7 does not recognize mineral resources and U.S. companies are generally not
permitted to disclose resources in documents they file with the SEC. Investors are specifically cautioned not to assume that any part or all of
the mineral deposits in these categories will ever be converted into SEC defined mineral reserves. Further, inferred resources have a great
amount of uncertainty as to their existence and as to whether they can be mined legally or economically. Therefore, investors are also
cautioned not to assume that all or any part of an inferred resource exists. It cannot be assumed that all or any part of measured mineral
resources, indicated mineral resources, or inferred mineral resources will ever be upgraded to a higher category. Investors are cautioned
not to assume that any part of the reported measured mineral resources, indicated mineral resources, or inferred mineral resources
contained herein is economically or legally mineable. For the above reasons, information contained herein containing descriptions of mineral
reserve and resource estimates is not comparable to similar information made public by U.S. companies subject to the reporting and
disclosure requirements of the SEC.

EXPOMINA PERU 2014

l 4

Acerca de Hudbay
TSX, NYSE, BVL Smbolo

Empresa minera integrada de metales base y

preciosos que se list en bolsa en 2004
>

Opera minas, proyectos de desarrollo y plantas de procesos

en las Amricas

Largo rcord de operaciones exitosas en el cinturn

Flin Flon Greenstone
>

Capitalizacin burstil1
Acciones en circulacin
Liquidez disponible
Deuda2

HBM
$2,700
millones
230 millones
$1,000
millones
$1.1 billion

Historia de casi 90 aos, durante la cual hemos desarrollado y

operado 28 minas
BUSCAMOS PROPIEDADES DENTRO DE
UN ESPECFICO RANGO GEOGRFICO Y
GEOLGICO DONDE PODEMOS
AGREGAR VALOR.

Estrategia de crecimiento disciplinada y clara

enfocada en el crecimiento de valor de activos netos,
ganancias y mtricas de flujo de caja por accin
Enfocados en la creacin de valor a travs de la exploracin,
desarrollo de minas y operaciones eficientes
> Jurisdicciones amigables a la minera
> Yacimientos VMS y prfidos
> En bsqueda de activos en etapa de desarrollo
>

1
2
3
4
5

1.
2.

Based on Hudbays TSX closing share price on July 31, 2014

Includes recent debt offering announced on July 31, 2014

MANITOBA 777, LALOR, REED

ARIZONA ROSEMONT
COLOMBIA EXPLORACION
PERU CONSTANCIA
CHILE EXPLORACION

EXPOMINA PERU 2014 l 5

Portafolio de activos de bajo costo y larga vida

CUMPLIENDO CON NUESTROS OBJETIVOS DE CRECIMIENTO EN 2014
777

Produccin

Construccin

Produccin estable a bajo costo

No alcanz meta para cobre en 2013
Mayores costos debido a menor mineral tratado
en 2013

Reed

Produccin comercial alcanzada antes de la

meta y con menor costo que lo presupuestado

Lalor

Capacidad de produccin se va duplicar en

2S2014 desde el pique principal y planta
concentradora modernizada
Exploracin subterrnea a finales de 2014

Constancia

Construccin alrededor de 85% completa al 30

de junio de 2014
A tiempo para comenzar produccin inicial en
4T2014. Se espera produccin comercial en
2T2015
Aumento de costos en 2013

La siguiente fase de crecimiento

Factibilidad &
Permsos

Rosemont

Proyecto de desarrollo de alta calidad

Complementario al portafolio existente
Funciona bien en secuencia con Constancia
Infraestructura bien establecida

EXPOMINA PERU 2014 l 6

Nuestra operacin en Amrica del Sur

CONSTANCIA: PROYECTO CUPRFERO EN EL PER, 100% HUDBAY

PERU

Lima

Constancia

EXPOMINA PERU 2014 l 7

Proyecto Constancia Cronograma & HistorIa

Ago 2013
Enero 2011
Hudbay compra
Constancia

Ago 2012
Se inuncia
recurso inicial
en yacimiento
de alta ley
Pampacancha

Nov 2010
Se recibi
permiso ESIA

2011

2010

Directorio de
Hudbay
aprueba
construccin
de Constancia

Abr 2012

Mar 2011
Se comienza
programa preconstruccin de US
$116 millones para
Constancia

2012

Ago 2014

Estimado
actualizado de
capital indica
aumento de
~10%
(US$1,708
millones)

Arranca lnea de
transmisin

2T 2015

Abr 2014

Se espera
produccin
comercial

Se reubican
todas las
familias en
rea de la
mina

2013

2015

2014

Jun 2012
Mar 2014

Se recibi
permiso para la
construccin

1S 2012
Se logran
acuerdos con
comunidades
cercanas

Comienza predesbroce

4T 2014
Sep 2013
Se aprueba
modificacin 1
de EISA

Se espera
produccin
inicial de
mineral

Note: All timelines are estimates

EXPOMINA PERU 2014 l 8

Adquisicin del Proyecto Constancia

CALZA PERFECTAMENTE CON ESTRATEGIA DE COMPRAS DE HUDBAY
En 2011, Hudbay compra a Norsemont
Mining Inc. por US$450 millones
> Incluye 100% del proyecto de cobre de

Constancia en el sur del Per

Se traslad al vice-presidente de Hudbay

al Per para desarollar y operar
Constancia
> Cashel Meagher, VP de unidad de negocio

de Amrica del Sur

> Se cre oficina principal en Lima

Capital invertido en el proyecto

> En 2011, se comenz programa de pre-

construccin de US$116 millones

> En 2012, se comenz programa de
construccin de US$1,700 millones1
1

US$1.7 billion construction program included US$116 million for the pre-construction costs

EXPOMINA PERU 2014 l 9

Descripcin del Proyecto de Constancia

DESARROLLO AVANZADO
> Proyecto alrededor de

85% completo al 30 de
junio, 2014
> Se invirti US$1,400

millones del presupuesto

total de construccin de
US$1,700 millones al 30
de junio, 2014

Vida de Mina1
Pertenencia

100%

Mineral procesado por da

80,000 tpd

Produccin anual de cobre en promedio2

82,000 TM

Costo por libra de cobre3

US$1.25/lb

Costo unidad mina y molino4

US$7.48/TM

Capex anual en promedio

US$47 millones

Vida de Mina

22 aos

PERU

Lima

Constancia

Constancia 2013

Constancia 2014

Source: Hudbay company disclosure

1. LOM as per NI 43-101 Technical Report on the Constancia Project dated October 15, 2012 and subsequent updates to project estimates in public disclosure
2. Production is contained metal in concentrate
3. Net of by-products. Includes impact of silver and gold streams. Assumed metal prices per the Silver Wheaton stream agreement are as follows: Gold US$400/oz, Silver US$5.90/oz. Other metal price assumptions
include: Molybdenum 2014-US$12/lb, 2015-US$13/lb, 2016-US$13/lb, LT-US$13.50/lb; Gold 2014-US$1,350/oz, 2015-US$1,325/oz, 2016-US$1,300/oz, 2017-US$1,275/oz, LT-US$1,250/oz. Excludes profit sharing
4. Combined mine and mill unit operating costs per tonne of ore processed
EXPOMINA PERU 2014 l 10

Progreso de Construccin de Constancia

Vista del molino de Constancia

Celdas de flotacin Constancia

Espesador de relaves Constancia

Mineral chancado para alimentar a molinos de bolas

EXPOMINA PERU 2014 l 11

Progreso de Construccin: Constancia

Instalaciones de mantenimiento de Constancia

Empleado trabajando en la sala de control

Cancha de relaves de Constancia

Pozo de sedimentacin de Constancia

EXPOMINA PERU 2014 l 12

Porqu creemos que Constancia ha

tenido relativo xito?

EXPOMINA PERU 2014 l 13

Los principales desafos

HACIENDO UN DIFERENCIA POSITIVA Y DURADERA
> Al lograr nuestras metas, hemos tenido que

enfrentar a los siguientes desafos:

Ingeniera / contratistas
Costos de capital
Seguridad
Permisos
Temas sociales
Reputacin / percepciones acerca de la minera

> Necesitamos asegurar que aplicamos la

misma disciplina a la Responsabilidad Social

como al lograr los objetivos operacionales y
financieros
Creamos beneficios y oportunidades aue contribuyen a
la sostenibilidad social y econmica de las
comunidades, y para proteger al medio ambiente

EXPOMINA PERU 2014 l 14

Crecimiento de produccin a corto plazo1

CONSTANCIA APORTA UN CRECIMIENTO SIGNIFICATIVO PARA HUDBAY

570% aumento de
produccin Cu

(kt)

137% aumento de
produccin Au-Eq.2
(koz)

19% aumento de
produccin Zn

(kt)

7774
Lalor5
Constancia6
Reed7

1.
2.
3.
4.
5.
6.
7.

Represents production growth from 2013 actual production to 2015 anticipated production levels.
Au-Eq. production includes production subject to streaming transactions. Silver converted to gold at a ratio of 50:1 for 2014 guidance. For 2013 production, silver converted to gold at 64:1, based on 2013 estimated
realized sales prices.
2014 estimated production levels based on midpoint of 2014 production guidance released on January 8, 2014.
777s anticipated production for 2015 is based on contained metal in concentrate as disclosed in Technical Report 777 Mine, Flin Flon, Manitoba, Canada dated October 15, 2012
Lalors anticipated production for 2015 is based on contained metal in concentrate as disclosed in Pre-Feasibility Study Technical Report, on the Lalor Deposit dated March 29, 2012.
Constancias anticipated production for 2015 is based on contained metal in concentrate as disclosed in, The Constancia Project, National Instrument 43-101 Technical Report, filed on November 6, 2012.
Reeds anticipated production for 2015 is based on contained metal in concentrate as disclosed in, Pre-Feasibility Study Technical Report on the Reed Copper Deposit dated April 2, 2012 and reflects 100%
attributable production to Hudbay.

EXPOMINA PERU 2014 l 15

Desarrollo del Proyecto Constancia

PROCESO DE CONSTRUCCIN DE APRXIMADAMENTE DOS AOS
Socios con experimencia
> Stracon GyM: Contratista Minera y

Movimiento de Tierra
> Ausenco: Construccin de Planta
> Knight Piesold: Ingeniera

Importancia de construIr un equipo

El valor de las buenas relaciones
comunitarias

Cancha de relaves

Bancos Cyclon en la zona de molinos

EXPOMINA PERU 2014 l 16

Estimado revisado del costo de capital

AUMENTO DE COSTOS, PRODUCCIN DE ACUERDO AL PLAN
> El capex revisado de Constancia en noviembre de 2013 indic un

aumento en el costo total para completar el proyecto de US$1,546

millones a US$1,708 millones
> El mayor factor que contribuy al aumento de costos fue el movimiento

de tierras, el cual fue afectado por:

Mayores volumenes del material que se tuvo que mover con relacin a lo estimado
Otros temas geotcnicos
Menor productividad que la esperada, debido al mal clima

> A pesar del aumento de costos, no hay impacto en el cronograma para el

inicio de operaciones

EXPOMINA PERU 2014

l 17

Logros de Seguridad
SE LOGR APROXIMADAMENTE 16
MILLONES DE HORAS HOMBRE SIN
ACCIDENTES DE TIEMPO PERDIDO
> Nuestra meta es cero daos
> No estaremos satisfechos si no lo

logramos
> Renovar nuestro enfasis en capacitacin

y programas de seguridad
Positive Attitude Safety System (PASS) /
Sistema de Seguridad Actitud Positivo
Acciones de seguridad

EXPOMINA PERU
EXPOMINA
2014 PRESENTATION
PERU 2014 l 18

Permisos de Acuerdo al Plan

HUDBAY: XITO AL OBTENER TODOS LOS PERMISOS
Se obtuvo permisos de construccin y pre-desbroce
> Actividades de movimiento de tierras, planta de beneficio e instalaciones

auxiliares, TMF, campamentos, MSP, WRF y pozos de coleccin and retencin,

NAG, depsito de tierra vegetal, pozos de sedimentacin, caminos de acarreo y
acceso y reservorio Cunahuiri.
> Otros permisos obtuvieron autorizaciones para usar y juntar agua, permisos de

efluentes, combustibles, planta de tratamiento de agua, generacin elctrica, y

certificaciones ambientales.

Se obtuvo permisos para comenzar pre-desbroce y explotar el depsito

> Permiso de mina y su enmendamiento, certificado de operador de mina,

autorizacin para usar explosivos y almacenes temporales

> Enmendamiento de autorizacin de construccin de planta de beneficio

Se espera conseguir a tiempo los permisos pendientes

> Licencias de agua subterrnea Etapa 4
> Licencis de agua superficial Etapa 4
> Permiso para operar planta de beneficio (Concesin de Beneficio)

EXPOMINA PERU 2014 l 19

Temas Sociales
COMPROMETIDO CON LA COMMUNIDAD
Empleo local y aprovisionamiento
> 915 trabajadores del rea de influencia directa e indirecta
> Ms de 400 contratos de alquiler de equipos con comunidades locales
> 13 proveedores locales de productos alimenticios en operacin

Programas de capatacin
> Capacitacin para miembros de la comunidad para habilidades bsicas (ie.

matemtica) y relacionadas con la minera

Inversin en las comunidades

> Inversiones voluntarias en las comunidades, nuevas viviendas e infraestructura, pagos

por uso de tierras

EXPOMINA PERU 2014

PRESENTATION
EXPOMINA
PERU 2014l 20
l 20

Temas Sociales (Continuado)

CREANDO COMUNIDADES SOSTENIBLES
>Acuerdos firmados con las comunidades
locales en el Per durante la vida til del
proyecto
>Reasentamiento de 36 familias
>Acuerdos con municipalidades distritales,
provincial, Gobierno Regional de Cusco y
Ministerios
>Se adopt la Iniciativa de Minera Sostenible
de la Asociacin Minera de Canad para
Canad y a nivel internacional
>Comprometidos con los estndares IFC para
performance ambiental y comunitario en Per
>EITI (Iniciativa de Transparencia de Industrias
Extractivas)
>Reporte CSR de acuerdo a los principios GRI

EXPOMINA PERU 2014 l 21

DE ACUERDO AL PLAN
EXPOMINA PERU 2014
Una exitosa inversin reciente:
La historia de Constancia

10 de setiembre de 2014

HBM