Av.

El Derby 055
Torre 3, piso4
Santiago de Surco
Lima 33, Perú
hudbayminerals.com

Memo

To: Eric Caba, Cashel Meagher, Alan Hair

From: Luis Miguel Arce

Date: Tuesday May 17th, 2016

Subject: Executive Summary of the Amendment Nº 2 to the Constancia Project Alliance

Agreement

Following is an executive summary of the Amendment Nº 2 to the Constancia Project

Alliance Agreement to be executed by and between Hudbay Peru S.A.C. (“HUDBAY”) and
STRACON GyM S.A. (“STRACON GyM”).

1. PURPOSE:

1.1 By means of the Amendment Nº 2, parties agree to amend and incorporate

some agreements to the Constancia Project Alliance Agreement entered
into on November 19th 2012, as amended by the Amendment Nº 1 dated
October 2nd 2013 (the “Alliance Agreement”).

2. PRODUCTION MINING AND MAINTENANCE ACTIVITIES:

2.1 Parties agree to reduce the Scope of the Alliance Activities provided in
Schedule 1 of the Alliance Agreement, as from May 1st 2016 or any other
date after that date but prior to December 31st 2016, if previously advised in
writing by HUDBAY. Accordingly, the activities under section “Production
Mining” are reduced to approx. one third of the activities originally listed
therein. This new scope will be valid until December 31st 2016, at which time
said activities would be removed from the Scope of the Alliance Activities.

2.2 As a consequence of the foregoing, the annual fee payable to STRACON

GyM for “Production Mining” activities for the period from January 1st 2016

1
 to December 31st 2016 is limited to the fixed amount of US$ 8,060,000.00
plus VAT, to be paid in instalments as agreed by the Alliance Leadership
Team. This is independent of the Actual Alliance Cost and the actual
disengagement date for mining operations and maintenance activities.

2.3 If HUDBAY terminates Maintenance activities prior to December 31st 2016,

HUDBAY shall pay STRACON GyM the remaining balance of the fixed fee
mentioned in section 2.2 above, within one month following the termination
date, as liquidated damages for early cease of the Maintenance activities.

2.4 Upon Contract Completion or Termination, there will no longer be an

additional Fee calculated or payable based on the value of Major Repairs
Provision, or the theoretical value of such work if Major Repair Provisions
have not been made.

3. CIVIL WORKS:

3.1 The parties also agree to amend the formula for the calculation of the fee
payable to STRACON GyM for Civil Works. As from January 1st 2016, such
fee is equal to the Actual Alliance Costs expended on the Civil Works
multiplied by 12.5% (instead of the 13.5% originally agreed in the Alliance
Agreement).

3.2 Likewise, as from January 1st 2016, the Actual Alliance Costs expended on
the Civil Works excludes all costs associated with the operation of HUDBAY
own mining equipment utilized for Tailings Management Facility
construction.

4. TERMINATION FOR CONVENIENCE:

4.1 The parties have reduced the “Termination Fee” payable by HUDBAY if it
exercises its right to terminate the Alliance Agreement at its convenience.
Pursuant to the original Alliance Agreement, the “Termination Fee” was
payable during the first four years as from the date of its execution.
However, according to the Amendment Nº 2, the US$ 4 million “Termination
Fee” originally applicable during Year 4 is no longer payable.

5. OTHER AGREEMENTS:

5.1 HUDBAY will acquire from STRACON GyM 1 x Atlas Copco PV271
hydraulic drill, on January 1st 2017, with payment to be made one month
later.

2
 5.2 HUDBAY will acquire from STRACON GyM all of its mining and
maintenance warehouse inventory, including tires, on a date no later than of
January 1st 2017, with payment to be made one month later.

***************

Signed by the appropriate person, in line with the SOA:

Name: Eric Caba Signature: __________________

Date: _____________________

Name: Cashel Meagher Signature: __________________

Date: _____________________

Name: Alan Hair Signature: __________________

Date: _____________________