Hudbay Minerals Inc. press release

Hudbay Delivers Strong Second Quarter 2026 Results and Improves Cash Cost Guidance

2026-07-29

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

TORONTO, July 29, 2026 (GLOBE NEWSWIRE) -- Hudbay Minerals Inc. (“Hudbay” or the “Company”) (TSX, NYSE: HBM) released its second quarter 2026 financial results today. All amounts are in U.S. dollars, unless otherwise noted.

“Hudbay delivered another quarter of steady operating performance and industry-leading margins, with record trailing twelve month adjusted EBITDA of $1.3 billion, driven by our unique copper and gold diversification and focus on cost control,” said Peter Kukielski, Chief Executive Officer. “Our diversified operations in Canada and Peru continued to achieve operating efficiencies and deliver strong gold by-product credits, which have more than offset external cost pressures and allowed us to improve our 2026 full-year consolidated cash cost guidance. We generated over $100 million in free cash flow during the quarter and more than $200 million in free cash flow through the first half of the year, allowing us to prudently reinvest in high-return growth opportunities across the business to enhance our exposure to copper and gold. Our Copper World project is on track for sanctioning later in 2026, and our recent acquisition of the Cactus project brings together two highly complementary assets in Arizona and solidifies our position as a premier Americas-focused copper producer with a pipeline of long-life, low-cost assets in tier-one jurisdictions.

“I am also very pleased to announce two key executive leadership appointments that will position Hudbay for the next phase of transformational growth. The appointment of Eugene Lei as President and Chief Financial Officer is a significant milestone for Hudbay and recognizes his passion and strategic vision for the long-term success of the Company. Eugene has been instrumental in the significant transformation of the Company since becoming Chief Financial Officer in 2022. He successfully executed the strategic plan to unlock Copper World, including achieving our stated balance sheet targets ahead of schedule and helping to facilitate the Copper World partnership with Mitsubishi. Rob Carter’s appointment as Chief Operating Officer recognizes the significant impact he has had on the business through revitalizing our Manitoba operations into becoming a sustainable cash flow contributor and bringing that expertise to our British Columbia operations. As Andre Lauzon embarks on his well-deserved retirement, I am confident that Eugene’s strategic foresight in the President role and Rob’s operational leadership as Chief Operating Officer will accelerate our growth pipeline and continue to maximize shareholder returns.”

Delivered Strong Second Quarter Financial Results; Production Guidance Reaffirmed and Cost Guidance Improved

Achieved quarterly revenue of $631.3 million, net earnings attributable to ownersiof $137.4 million, quarterly adjusted EBITDAiof $321.2 million and adjusted net earnings attributable to ownersiof $113.5 million in the second quarter, driven by steady operating performance, attractive operating margins and strong exposure to copper and gold across Hudbay's diversified operating portfolio. Steady production continued in the second quarter with consolidated copper and gold production of 28,267 tonnes and 51,234 ounces, respectively, with higher copper production in line with quarterly cadence expectations while gold production was slightly lower than quarterly cadence expectations. Industry-leading margins continued with consolidated cash costiand sustaining cash costi, net of by-product credits, of $(0.40) and $1.39 per pound of copper, respectively, in the second quarter of 2026. Reaffirmed full year 2026 consolidated production guidance including 110,000 to 138,000 tonnes of copper and 217,000 to 272,000 ounces of gold. Improved full year 2026 consolidated cash costiguidance to $(0.45) to $(0.25) per pound of copper from $(0.30) to $(0.10) per pound as costs are tracking well below the low end of the guidance range given strong exposure to gold by-product credits and continued operating efficiencies are more than offsetting higher input costs for fuel and consumables. Peru operations produced 19,446 tonnes of copper and 5,282 ounces of gold in the second quarter of 2026, in line with quarterly cadence expectations with a planned semi-annual plant maintenance shutdown during the quarter. Peru cash costi, net of by-product credits, of $1.66 per pound outperformed the low end of the 2026 annual guidance range of $1.70 to $2.10 per pound despite the lower planned production and higher fuel costs. Manitoba operations produced 40,344 ounces of gold, 2,366 tonnes of copper, 4,760 tonnes of zinc and 209,478 ounces of silver in the second quarter of 2026, slightly lower than quarterly cadence expectations. Manitoba cash costiof $776 per ounce of gold was within the annual guidance range of $500 to $800 per ounce. British Columbia operations produced 6,455 tonnes of copper, 5,608 ounces of gold and 71,178 ounces of silver in the second quarter of 2026, in line with quarterly cadence expectations. British Columbia cash costiof $3.22 per pound of copper was higher than the annual cost guidance range of $1.50 to $2.50 primarily due to elevated fuel prices and timing of equipment maintenance. British Columbia cash cost is expected to improve in the second half of the year, in line with the annual guidance range. Second quarter earnings per share attributable to owners was $0.34 reflecting strong gross profit margins as a result of the continued focus on strong cost control and higher metal prices more than offsetting higher input costs. After adjusting for various non-cash items on a pre-tax basis, second quarter adjusted earningsiper share attributable to owners was $0.28. Cash and cash equivalents were $890.9 million and total liquidityiiwas $1,044.6 million at the end of the second quarter of 2026, despite using cash to retire over $200 million in long term debt and benefitting from the approximate $420 million initial cash contribution from Mitsubishi Corporation ("Mitsubishi") received on closing of the Copper World joint venture transaction in January 2026.

Continued Strong Cash Flow Generation and Prudent Balance Sheet Management

Hudbay's unique copper and gold diversification across its operations provides exposure to higher copper and gold prices, which together with a focus on cost control across the business, continues to realize strong margins and generate significant free cash flow. While the majority of Hudbay's revenue continues to be derived from copper production, revenue from gold production represents a meaningful portion of total revenues. Gold revenues were 38% of total revenue in the second quarter of 2026. Cash generated from operating activities was $297.0 million during the second quarter of 2026, reflecting an increase of $85.7 million compared to the first quarter partially as a result of favourable changes in non-cash working capital. Operating cash flow before changes in non-cash working capital was $210.1 million during the second quarter of 2026, relatively consistent with the first quarter. Delivered free cash flowigeneration of $101.8 million during the second quarter of 2026, representing a similar level of free cash flow generation to the first quarter through continued strong operating margins and cost controls, resulting in more than $200 million of free cash flow generated in the first half of 2026 despite investing over $200 million of sustaining capital in the business over this period. Achieved quarterly adjusted EBITDAiof $321.2 million in the second quarter of 2026, resulting in record trailing twelve month adjusted EBITDAiof $1,271.6 million. Achieved net debtiof negative $80.5 million as at June 30, 2026, representing an $86.1 million improvement from the first quarter of 2026 and positioning the Company well to reinvest in high-return growth capital projects across the business. Net debt to adjusted EBITDA ratioiwas negative 0.1x in the second quarter of 2026, significantly improved from 0.4x in the fourth quarter of 2025 as a result of the initial proceeds received from Mitsubishi on closing of the Copper World joint venture transaction along with strong cash flows from operations. Consistent with Hudbay’s prudent balance sheet management and focus on cost of capital, Hudbay repaid $472.5 million of its outstanding 2026 senior unsecured notes on maturity on April 1, 2026, using a combination of cash on hand and a $272 million draw on its low-cost revolving credit facilities, providing the Company with enhanced financial flexibility in advance of a Copper World sanctioning decision later this year. Received proceeds of an offering of $52 million in aggregate principal amount of solid waste disposal revenue bonds with an initial mandatory tender date in 2036. These long-term, low-cost, non-amortizing U.S. municipal bonds, may be used for certain eligible costs associated with the development of Copper World. Hudbay's enhanced Capital Allocation Framework is embedded into its annual financial planning cycle to provide a holistic approach to capital allocation decisions to maximize long-term risk-adjusted returns, including capital deployment into brownfield projects, greenfield projects, strategic investments and exploration, while considering debt repurchases, share buybacks and dividends.

Advancing Generational Growth Investments to Further Enhance Copper and Gold Exposure

The Copper World definitive feasibility study (“DFS”) is progressing well, and a project sanctioning decision continues to be on track for late 2026. The DFS is expected to include scope for future mill expansion optionality. Completed the acquisition of Arizona Sonoran Copper Company Inc. ("Arizona Sonoran") to bring together two highly complementary copper growth assets in Arizona and strengthen Hudbay’s position as a premier Americas-focused copper company with a pipeline of long‑life, low‑cost assets located in tier-one jurisdictions. The acquisition of Arizona Sonoran enhances Hudbay’s long‑term copper production profile and expands its U.S. growth pipeline through the staged development of Copper World and Cactus. Hudbay expects to spend approximately $30 million at Cactus in the second half of 2026 to advance an updated pre-feasibility study, perform site de-risking activities, conduct exploration activities and for other ongoing site costs. Continued to advance a large Snow Lake exploration program to further increase near-term production and mineral reserves, test regional satellite deposits for additional mill feed to utilize available capacity at Stall and explore the large land package for a new anchor deposit to meaningfully extend mine life. Celebrated the official groundbreaking of the New Ingerbelle expansion project at Copper Mountain, marking a significant milestone for the operation and its long-term future in British Columbia, enhancing the copper and gold production profile and securing a longer mine life. Growth capital expenditures in British Columbia in 2026 are expected to increase by approximately $30 million to $115 million, due to additional costs associated with the development of infrastructure for New Ingerbelle. Received approval from the government in Peru to further increase annual mill processing capacity at Constancia to 34 million tonnes of ore per annum from the previously permitted 31 million tonnes, enabling additional capacity to further optimize Constancia’s operations and deliver strong copper production. Advanced initial pre-feasibility study activities at the Mason copper project in Nevada.

Summary of Second Quarter Results

Hudbay's diversified asset portfolio delivered consolidated copper production of 28,267 tonnes and consolidated gold production of 51,234 ounces in the second quarter of 2026. Consolidated copper production was higher than the first quarter of 2026 as higher mill throughput in British Columbia more than offset lower planned mill throughput in Peru. Consolidated gold production was lower than the first quarter of 2026 primarily due to lower milled gold grades. Consolidated silver production of 845,161 ounces was higher than the first quarter of 2026 due to higher grades and recoveries in British Columbia. Zinc production of 4,760 tonnes in the second quarter of 2026 also increased compared to the previous quarter, primarily reflecting higher ore grades at the Manitoba operations.

Cash generated from operating activities was $297.0 million during the second quarter of 2026, reflecting an increase of $85.7 million compared to the first quarter of 2026, partially as a result of favourable changes in non-cash working capital. Operating cash flow before changes in non-cash working capital was $210.1 million during the second quarter of 2026 and remained relatively consistent with the first quarter of 2026.

Adjusted EBITDAiwas $321.2 million in the second quarter of 2026, a decrease compared to the record $421.9 million achieved in the first quarter of 2026 primarily due to lower sales volumes, partially offset by higher copper prices. The lower sales volumes in the second quarter of 2026 were impacted by a temporary build-up of concentrate inventory at the port in Peru. This accumulation was caused by ocean swells that resulted in temporary port closures and delayed scheduled shipments of approximately 10,000 dry metric tonnes of copper concentrate, which were delivered in the first half of July 2026.

Net earnings attributable to owners was $137.4 million, or $0.34 per share, in the second quarter of 2026 compared to $190.4 million, or $0.48 per share, in the first quarter of 2026. The decrease is primarily the result of lower revenue due to lower sales volumes of all metals.

Adjusted net earnings attributable to ownersiand adjusted net earnings per share attributable to ownersiin the second quarter of 2026 were $113.5 million and $0.28 per share, respectively, after adjusting for various non-cash items on a pre-tax basis including a $38.2 million mark-to-market revaluation net gain on various financial instruments such as investments and share-based compensation, a non-cash $12.0 million foreign exchange loss, and an $11.5 million business interruption insurance recovery related to the Manitoba mandatory wildfire evacuations shutdowns in 2025, among other items. This compares to adjusted net earnings attributable to ownersiand net earnings per share attributable to ownersiof $161.0 million and $0.40 per share, respectively, in the first quarter of 2026. The decrease is a result of lower realized metal prices for gold and the aforementioned lower sales volumes.

Consolidated cash costi, net of by-product credits, in the second quarter of 2026 was $(0.40) per pound of copper, compared to record low cash cost of $(1.80) per pound in the first quarter of 2026. The increase from the first quarter of 2026 was a result of lower by-product credits from lower gold volumes.

Consolidated sustaining cash costi, net of by-product credits, in the second quarter of 2026 was $1.39 per pound of copper, compared to $0.00 per pound in the first quarter of 2026. This increase was primarily due to the same factors impacting consolidated cash costinoted above.

Consolidated all-in sustaining cash costi, net of by-product credits, in the second quarter of 2026 was $1.80 per pound of copper, higher than the first quarter of 2026 due to the same reasons noted above, partially offset by lower corporate general and administrative ("G&A") costs from the impact of the revaluation of Hudbay's share-based compensation.

As at June 30, 2026, total liquidityiiwas $1,044.6 million, including $890.9 million in cash and cash equivalents, which excludes $49.8 million in U.S. municipal bond proceeds that is classified as restricted cash, and undrawn availability of $153.7 million under Hudbay's revolving credit facilities. Net debtiat the end of the second quarter was negative $80.5 million, marking an $86.1 million improvement from first quarter of 2026 primarily as a result of positive cash flows from operations. Hudbay expects that the current liquidity, together with cash flows from operations, will be sufficient to meet the Company's liquidity needs for the remainder of 2026.

| Consolidated Financial Condition (in $ millions, except net debt to adjusted EBITDA ratio) | Jun. 30, 2026 | Mar. 31, 2026 | Dec. 31, 2025 | | Cash and cash equivalents1 | 890.9 | 1,003.8 | 568.9 | | Total long-term debt | 860.2 | 1,009.4 | 1,008.6 | | Net debt2,3 | (80.5) | 5.6 | 439.7 | | Working capital4 | 751.8 | 407.3 | (65.6) | | Total assets | 8,062.0 | 6,896.9 | 6,223.3 | | Equity attributable to owners of the Company | 4,797.2 | 3,533.5 | 3,231.0 | | Net debt to adjusted EBITDA2 | (0.1) | 0.0 | 0.4 |

1As at June 30, 2026 cash and cash equivalents include $334.5 million in cash held by Copper World LLC. These funds are contractually restricted solely for the advancement of the Copper World project and are not available to the general Hudbay group. 2Net debt and net debt 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. 3 Hudbay calculates net debt as total long-term debt less cash and cash equivalents and restricted cash related to unspent proceeds of its senior unsecured municipal bond financing. 4 Working capital is determined as total current assets less total current liabilities as defined under IFRS and disclosed on the consolidated interim financial statements.

| Consolidated Financial Performance | | Three Months Ended | | | | | | Jun. 30, 2026 | Mar. 31, 2026 | Jun. 30, 2025 | | Revenue | $ millions | 631.3 | 757.3 | 536.4 | | Cost of sales | $ millions | 362.3 | 389.3 | 359.9 | | Earnings before tax | $ millions | 240.4 | 339.0 | 153.1 | | Net earnings | $ millions | 138.1 | 191.5 | 114.7 | | Net earnings attributable to owners | $ millions | 137.4 | 190.4 | 117.7 | | Basic and diluted attributable earnings per share | $/share | 0.34 | 0.48 | 0.30 | | Adjusted earnings attributable per share1 | $/share | 0.28 | 0.40 | 0.19 | | Operating cash flow before change in non-cash working capital | $ millions | 210.1 | 208.7 | 193.9 | | Adjusted EBITDA1 | $ millions | 321.2 | 421.9 | 245.2 | | Free cash flow1 | $ millions | 101.8 | 102.3 | 86.7 |

1Adjusted earnings attributable per share, adjusted EBITDA and free cash flow 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 | | | | | | | Jun. 30, 2026 | Mar. 31, 2026 | Jun. 30, 2025 | | Contained metal in concentrate and doré produced1 | | | | | | Copper | tonnes | 28,267 | 27,929 | 29,956 | | Gold | ounces | 51,234 | 61,700 | 56,271 | | Silver | ounces | 845,161 | 787,449 | 814,989 | | Zinc | tonnes | 4,760 | 4,565 | 5,130 | | Molybdenum | tonnes | 277 | 380 | 375 | | Payable metal sold | | | | | | Copper | tonnes | 23,780 | 29,544 | 30,354 | | Gold2 | ounces | 56,266 | 66,562 | 62,466 | | Silver2 | ounces | 674,490 | 923,051 | 894,160 | | Zinc | tonnes | 2,635 | 3,897 | 2,871 | | Molybdenum | tonnes | 298 | 375 | 427 | | Consolidated cash cost per pound of copper produced3 | | | | | | Cash cost | $/lb | (0.40) | (1.80) | (0.02) | | Sustaining cash cost | $/lb | 1.39 | 0.00 | 1.65 | | All-in sustaining cash cost | $/lb | 1.80 | 0.73 | 2.03 |

1Metal reported in concentrate is prior to deductions associated with smelter contract terms and includes other secondary products. 2Includes total payable gold and silver in concentrate and in doré sold and other secondary products. 3Cash cost, sustaining cash cost and all-in sustaining cash cost per pound of copper produced, net of by-product credits 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.