Hudbay Minerals Inc. press release

Hudbay Delivers Strong First Quarter 2025 Results Driven by Gold Production and Record Cost Performance

2025-05-12

TSX - Toronto Stock Exchange · Copper · Molybdenum · Gold · Silver · Sulfur · Zinc · Canada · Corporate Finance

TORONTO, May 12, 2025 (GLOBE NEWSWIRE) -- Hudbay Minerals Inc. (“Hudbay” or the “Company”) (TSX, NYSE: HBM) today released its first quarter 2025 financial results. All amounts are in U.S. dollars, unless otherwise noted.

"Our strong results in the first quarter reflect stable copper production and complementary gold production from our enhanced operating platform, which continued to deliver significant free cash flows and industry-leading margins,” said Peter Kukielski, President and Chief Executive Officer. “We are well-positioned to deliver our full year 2025 consolidated production and cost guidance with the operations delivering in line copper production, better-than-expected gold production and effective cost control in the first quarter. We continue to benefit from steady mill throughput in Peru, higher grades and mill throughput in Manitoba and ongoing optimization efforts in British Columbia. This resulted in record adjusted EBITDA and record low cash cost performance in the quarter. We made significant progress in advancing our growth strategy as we consolidated ownership at Copper Mountain to increase our exposure to a high-quality asset in a tier-1 jurisdiction. We are also now fully permitted at Copper World to increase our long-term copper production by more than 50%. We will continue to reinvest in our attractive portfolio of high-return brownfield and greenfield growth opportunities to further enhance our copper and gold exposure and unlock significant value for all our stakeholders.”

Achieved Record Adjusted EBITDA Driven by Strong Gold Production, Stable Copper Production and Industry-leading Margins; 2025 Production and Cost Guidance Reaffirmed

Achieved revenue of $594.9 million and record quarterly adjusted EBITDA i of $287.2 million in the first quarter of 2025. Strong financial results were driven by record low consolidated cash cost performance as all three business units expanded operating cost margins and executed on planned strategies. Consolidated copper production of 30,958 tonnes in the first quarter was in line with quarterly cadence expectations. Consolidated gold production of 73,784 ounces was better than quarterly cadence expectations driven by outperformance in Manitoba. Industry-leading cost performance continues with record low consolidated cash cost i and sustaining cash cost i per pound of copper produced, net of by-product credits, of $(0.45) and $0.72, respectively, in the quarter. Reaffirmed full year 2025 consolidated production guidance of 117,000 to 149,000 tonnes of copper and 247,500 to 308,000 ounces of gold. Reaffirmed all 2025 cost guidance, including consolidated cash cost i guidance of $0.80 to $1.00 per pound of copper and sustaining cash cost i guidance of $2.25 to $2.65 per pound of copper. Peru operations continued to benefit from strong and consistent mill throughput, achieving an average of approximately 90,200 tonnes per day in the first quarter. Copper production of 20,293 tonnes and gold production of 7,869 ounces was in line with quarterly cadence expectations. Peru cash cost i per pound of copper produced, net of by-product credits, of $1.11 was better than expected as the Peru operations demonstrated strong cost control and benefited from higher by-product prices. Manitoba operations produced 60,354 ounces of gold in the first quarter, exceeding quarterly cadence expectations as a result of better-than-expected gold grades and recoveries. Manitoba cash cost i per ounce of gold produced, net of by-product credits, was $376 during the quarter, a significant decrease compared to prior quarters and continuing to achieve industry-leading cost performance. British Columbia operations produced 7,196 tonnes of copper at a cash cost i per pound of copper produced, net of by-product credits, of $2.44 in the first quarter, in line with quarterly cadence expectations. First quarter net earnings attributable to owners and earnings per share attributable to owners were $100.4 million and $0.25, respectively, a significant increase compared to the first and fourth quarter of 2024, driven by high gross margins with strong revenue and unit cost control. After adjusting for various non-cash items, first quarter adjusted earnings i per share attributable to owners was $0.24. Cash and cash equivalents and short-term investments were $582.6 million and total liquidity was $1,008.5 million at the end of the first quarter of 2025. Net debt to adjusted EBITDA ratio i was 0.6x in the first quarter of 2025, in line with the fourth quarter of 2024 and significantly improved from 1.3x in the first quarter of 2024 because of successful deleveraging efforts throughout 2024.

Meaningful Gold Exposure and Steady Copper Performance Driving Continued Free Cash Flow Generation

Hudbay's unique copper and gold diversification in Peru and Canada provides exposure to higher copper and gold prices and attractive free cash flow vii generation. While the majority of revenues continue to be derived from copper production, gold represented a higher portion of total revenues at 38% in the first quarter of 2025 compared to 35% in the fourth quarter of 2024, which was driven by high gold production in Manitoba and exposure to higher gold prices. Delivered the seventh consecutive quarter of meaningful free cash flow vii generation as a result of continued strong copper and gold production and effective cost control across all business units. Achieved record adjusted EBITDA i of $287.2 million in the first quarter of 2025, representing a 12% increase from the fourth quarter of 2024 and a 34% increase from the first quarter 2024. Over the last twelve months, generated more than $350 million in free cash flow vii and $895.7 million in adjusted EBITDA i . Significant exposure to higher copper and gold prices with a $100 million increase to operating cash flow for every 10% increase in annual copper price and a $56 million increase in operating cash flow for every 10% increase in annual gold price, using the mid-point of 2025 guidance ranges ii .

Reinvesting in High-return Growth Initiatives to Further Enhance Copper and Gold Exposure

Advancing high-return brownfield mill initiatives and greenfield copper projects to drive near-term and long-term production growth with $25.5 million in growth capital expenditures during the first quarter of 2025. Consolidated copper production is expected to average 144,000 iii tonnes per year over the next three years, maintaining stable production levels from 2024. Consolidated copper production of 161,000 iii tonnes is expected in 2027, representing a 17% increase from 2024 and reflects the benefits from the completion of the optimization efforts at Copper Mountain. Strong complementary gold exposure with consolidated gold production expected to average 253,000 iii ounces per year over the next three years, reflecting continued strong production in Manitoba. Following quarter-end, completed transaction with MMC to consolidate 100% ownership of the Copper Mountain mine in a highly accretive transaction to further increase Hudbay's exposure to a long-life, high-quality copper asset in a tier-1 mining jurisdiction, resulting in a 200% increase in attributable copper production from Copper Mountain in 2027 compared to 2024. Advancing feasibility studies and minority joint venture partner process for Copper World. Copper World is the highest grade and lowest capital intensity fully permitted copper project in the Americas. Optimization efforts at Copper Mountain are focused on executing the planned accelerated stripping program and mill throughput improvement projects, including the planned conversion of the third ball mill to a second SAG mill in the second half of 2025. Drill permitting for highly prospective Maria Reyna and Caballito properties near Constancia continues to advance through the multi-step regulatory process. Achieved significant progress with the development of the drifts towards the 1901 deposit in Snow Lake where a recent exploration drill hole intersected zinc-rich massive sulphides 20 metres earlier than anticipated, and planned first ore remains on track for the second quarter of 2025. Exploration and definition drilling planned over the next two years. Large exploration program in Snow Lake continues to execute threefold strategy focused on near-mine exploration to increase near-term production and mineral reserves, testing regional satellite deposits for additional ore feed to utilize available capacity at the Stall mill, and exploring the large land package for a potential new anchor deposit to meaningfully extend mine life. Signed exploration agreement with the Mosakahiken Cree Nation related to the Talbot copper-zinc-gold deposit near Snow Lake, representing the second First Nations exploration agreement that Hudbay has entered into this year as the Company continues to build positive relationships and advance shared opportunities with local First Nations communities. Enhancing stakeholder engagement and advancing additional metallurgical studies at the Mason copper project in Nevada. Continuing to advance Flin Flon tailings reprocessing opportunities through metallurgical test work and economic evaluation to assess the possibility of producing critical minerals and precious metals in an environmentally friendly manner.

Summary of First Quarter Results

Consolidated copper production of 30,958 tonnes in the first quarter of 2025 was in line with quarterly production cadence expectations, while consolidated gold production of 73,784 ounces was better than quarterly production cadence expectations. Consolidated copper and gold production was lower than the fourth quarter of 2024 due to lower planned grades in Peru as Hudbay is completing the final stripping phase in the high-grade Pampacancha pit, partially offset by higher gold production in Manitoba from better-than-expected gold grades. Consolidated silver production of 919,775 ounces and zinc production of 6,265 tonnes in the first quarter of 2025 were lower than the fourth quarter of 2024 primarily due to lower grades in Peru as the Company completed planned stripping activities.

Cash generated from operating activities of $124.8 million decreased compared to the fourth quarter of 2024 as a result of higher cash taxes paid which are a function of higher profits in earlier quarters in Peru and Manitoba. Operating cash flow before change in non-cash working capital was $163.5 million during the first quarter of 2025, reflecting a decrease of $68 million compared to the fourth quarter of 2024. The decrease was primarily the result of lower gold and copper sales volumes in Peru as expected.

First quarter adjusted EBITDA i was $287.2 million, a 12% increase compared to $257.3 million in the fourth quarter of 2024 as exposure to higher copper and gold prices in the quarter offset the lower sales volume.

Net earnings attributable to owners in the first quarter of 2025 was $100.4 million, or $0.25 per share, compared to $21.2 million, or $0.05 per share, in the fourth quarter of 2024. The significant increase in earnings is the result of high gross margins from strong revenue growth on the back of higher realized copper and gold prices and strong unit cost control. In addition to higher mining and income tax expense experienced in the first quarter of 2025, the quarter was also impacted by various non-cash charges for revaluation loss of closed sites reclamation provisions, mark-to-market revaluation gain on various instruments, and foreign exchange gain, among other items.

Adjusted net earnings attributable to owners i and adjusted net earnings per share attributable to owners i in the first quarter of 2025 were $93.8 million and $0.24 per share, respectively, after adjusting for various non-cash items on a pre-tax basis such as a non-cash loss of $12.8 million related to quarterly revaluation of Hudbay's closed site environmental reclamation provision, a $10.5 million variable consideration adjustment gain associated with the stream revenue and accretion, a $3.1 million mark-to-market revaluation gain on various instruments such as unrealized strategic copper hedges, investments and share-based compensation, a non-cash $3.1 million foreign exchange gain, and a $1.9 million gain related to flow-through share expenditures, among other items. This compares to adjusted net earnings attributable to owners i and net earnings per share attributable to owners i of $70.3 million and $0.18 per share in the fourth quarter of 2024. The sharp increase in adjusted net earnings attributable to owners i and adjusted net earnings per share attributable to owners i is for the same reasons discussed above for net earnings.

In the first quarter of 2025, consolidated cash cost i per pound of copper produced, net of by-product credits, achieved record low levels of $(0.45), compared to $0.45 in the fourth quarter of 2024. This improvement was a result of higher by-product credits and strong operating cost performance across all business units, partially offset by expected lower production levels in Peru during the quarter. Consolidated sustaining cash cost i per pound of copper produced, net of by-product credits, was a record low at $0.72 in the first quarter of 2025, compared to $1.37 in the fourth quarter of 2024. The improvement was driven by the same factors impacting consolidated cash cost and slightly lower sustaining capital expenditures in the first quarter. Consolidated all-in sustaining cash cost i per pound of copper produced, net of by-product credits, was $0.97 in the first quarter of 2025, lower than $1.53 in the fourth quarter of 2024 mainly due to the same reason outlined above.

As at March 31, 2025, total liquidity was $1,008.5 million, including $562.6 million in cash and cash equivalents, $20.0 million in short-term investments as well as undrawn availability of $425.9 million under the Company's revolving credit facilities. Net debt i at the end of the first quarter was $526.1 million and remained consistent with the fourth quarter of 2024.

| Consolidated Financial Condition (in $ millions, except net debt to adjusted EBITDA ratio) | Mar. 31, 2025 | Dec. 31, 2024 | Mar. 31, 2024 | | Cash and cash equivalents and short-term investments | 582.6 | 581.8 | 284.4 | | Total long-term debt | 1,108.7 | 1,107.5 | 1,278.6 | | Net debt 1 | 526.1 | 525.7 | 994.2 | | Working capital 2 | 598.0 | 511.3 | 200.9 | | Total assets | 5,507.0 | 5,487.6 | 5,231.3 | | Equity attributable to owners of the Company | 2,653.2 | 2,553.2 | 2,107.5 | | Net debt to adjusted EBITDA 1,3 | 0.6 | 0.6 | 1.3 |

1 Net debt and net debit to adjusted EBITDA are non-GAAP financial performance measures with no standardized definition under IFRS. For further information, please see the "Non-GAAP 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 Net debt to adjusted EBITDA for the 12 month period.

| Consolidated Financial Performance | | Three Months Ended | | | | | | Mar. 31, 2025 | Dec. 31, 2024 | Mar. 31, 2024 | | Revenue | $000s | 594.9 | 584.9 | 525.0 | | Cost of sales | $000s | 363.6 | 400.5 | 373.0 | | Earnings before tax | $000s | 171.3 | 103.7 | 67.8 | | Net earnings | $000s | 99.2 | 19.3 | 18.5 | | Net earnings attributable to owners | $000s | 100.4 | 21.2 | 22.3 | | Basic and diluted attributable earnings per share 1 | $/share | 0.25 | 0.05 | 0.06 | | Adjusted earnings attributable per share 1 | $/share | 0.24 | 0.18 | 0.17 | | Operating cash flow before change in non-cash working capital | $ millions | 163.5 | 231.5 | 147.5 | | Adjusted EBITDA 1 | $ millions | 287.2 | 257.3 | 215.0 |

1 Adjusted earnings per share - attributable to owners and adjusted EBITDA are non-GAAP financial performance measures with no standardized definition under IFRS. For further information and a detailed reconciliation, please see discussion under the “Non-GAAP Financial Performance Measures” section of this news release.

| Consolidated Production and Cost Performance | | Three Months Ended | | | | | | Mar. 31, 2025 | Dec. 31, 2024 | Mar. 31, 2024 | | Contained metal in concentrate and doré produced 1 | | | | | | Copper | tonnes | 30,958 | 43,262 | 34,749 | | Gold | ounces | 73,784 | 94,161 | 90,392 | | Silver | ounces | 919,775 | 1,311,658 | 947,917 | | Zinc | tonnes | 6,265 | 8,385 | 8,798 | | Molybdenum | tonnes | 397 | 195 | 397 | | Payable metal sold | | | | | | Copper | tonnes | 31,768 | 37,927 | 33,608 | | Gold 2 | ounces | 75,092 | 92,734 | 108,081 | | Silver 2 | ounces | 1,006,968 | 1,150,518 | 1,068,848 | | Zinc | tonnes | 4,857 | 5,261 | 6,119 | | Molybdenum | tonnes | 448 | 182 | 415 | | Consolidated cash cost per pound of copper produced 3 | | | | | | Cash cost | $/lb | (0.45) | 0.45 | 0.16 | | Sustaining cash cost | $/lb | 0.72 | 1.37 | 1.00 | | All-in sustaining cash cost | $/lb | 0.97 | 1.53 | 1.29 |

1 Metal reported in concentrate is prior to deductions associated with smelter contract terms. 2 Includes total payable gold and silver in concentrate and in doré sold. 3 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 | | | | | | | Mar. 31, 2025 | Dec. 31, 2024 | Mar. 31, 2024 | | Constancia ore mined 1 | tonnes | 8,628,279 | 4,186,058 | 2,559,547 | | Copper | % | 0.28 | 0.40 | 0.31 | | Gold | g/tonne | 0.03 | 0.04 | 0.04 | | Silver | g/tonne | 3.14 | 3.88 | 2.79 | | Molybdenum | % | 0.02 | 0.02 | 0.01 | | Pampacancha ore mined 1 | tonnes | 389,189 | 4,037,264 | 2,214,354 | | Copper | % | 0.44 | 0.63 | 0.56 | | Gold | g/tonne | 0.26 | 0.38 | 0.32 | | Silver | g/tonne | 3.68 | 6.43 | 4.64 | | Molybdenum | % | 0.01 | 0.00 | 0.02 | | Total ore mined | tonnes | 9,017,468 | 8,223,322 | 4,773,901 | | Strip ratio 4 | | 1.02 | 1.22 | 1.95 | | Ore milled | tonnes | 8,114,024 | 7,999,453 | 8,077,962 | | Copper | % | 0.30 | 0.48 | 0.36 | | Gold | g/tonne | 0.05 | 0.20 | 0.15 | | Silver | g/tonne | 3.22 | 5.28 | 3.48 | | Molybdenum | % | 0.01 | 0.01 | 0.01 | | Copper recovery | % | 84.6 | 87.8 | 84.9 | | Gold recovery | % | 56.5 | 73.3 | 73.4 | | Silver recovery | % | 66.0 | 71.4 | 70.7 | | Molybdenum recovery | % | 35.7 | 37.1 | 43.2 | | Contained metal in concentrate | | | | | | Copper | tonnes | 20,293 | 33,988 | 24,576 | | Gold | ounces | 7,869 | 38,079 | 29,144 | | Silver | ounces | 554,692 | 969,502 | 639,718 | | Molybdenum | tonnes | 397 | 195 | 397 | | Payable metal sold | | | | | | Copper | tonnes | 22,890 | 28,775 | 23,754 | | Gold | ounces | 14,362 | 37,459 | 42,677 | | Silver | ounces | 714,654 | 824,613 | 753,707 | | Molybdenum | tonnes | 448 | 182 | 415 | | Combined unit operating cost 2,3 | $/tonne | 11.09 | 15.25 | 10.92 | | Cash cost 3 | $/lb | 1.11 | 1.00 | 0.43 | | Sustaining cash cost 3 | $/lb | 1.92 | 1.48 | 1.02 |

1 Reported tonnes and grade for ore mined are estimates based on mine plan assumptions and may not reconcile fully to ore milled. 2 Reflects combined mine, mill and general and administrative ("G&A") costs per tonne of ore milled. Reflects the deduction of expected capitalized stripping costs. 3 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. 4 Strip ratio is calculated as waste mined divided by ore mined.

During the first quarter of 2025, the Peru operations produced 20,293 tonnes of copper, 7,869 ounces of gold, 554,692 ounces of silver and 397 tonnes of molybdenum, in line with mine plan quarterly cadence expectations. Production of copper, gold and silver in the first quarter of 2025 was lower than the fourth quarter of 2024 due to planned lower grades as a larger portion of lower grade Constancia ore was processed in the current quarter. Hudbay is on track to achieve its 2025 production guidance for all metals in Peru.