Hudbay Minerals Inc. press release

Hudbay and Mitsubishi Approve Copper World Project Construction; Advancing Next Major U.S. Copper Mine Towards First Production in 2029

2026-10-21

TSX - Toronto Stock Exchange · Copper · Molybdenum · Gold · Silver · Sulfur · Zinc · Canada · Project Development

TORONTO, Oct. 21, 2026 (GLOBE NEWSWIRE) -- Hudbay Minerals Inc. (“Hudbay” or the “Company”) (TSX, NYSE: HBM)today announced the results of the definitive feasibility study and related pre-feasibility studies (collectively, the “DFS”) for its 70%-owned Copper World project in Arizona, located approximately 50 kilometres (31 miles) southeast of Tucson. Copper World is 30%-owned by Mitsubishi Corporation (“Mitsubishi”) pursuant to a joint venture agreement entered into with Hudbay in January 2026. Supported by a robust DFS, Hudbay and Mitsubishi have formally approved the final investment decision to proceed with the construction and development of Copper World as the next major copper mine in the U.S. with first production targeted for the second half of 2029. Hudbay will be filing a technical report pursuant to National Instrument 43-101 containing the results of the DFS for Copper World. All dollar amounts are in U.S. dollars, unless otherwise noted. "Tonnes” refer to metric tonnes and “tons” refer to imperial or U.S. short tons.

Copper World Will Be One of the Largest Open-Pit Copper Mines in the United States, Doubling Hudbay’s Annual Copper Production Levels

With first production projected in the second half of 2029, Copper World will be the first of the next generation of long-life, low-cost copper mines in the Americas. Copper World DFS outlines annual copper production of 102,000 tonnes over the first 10 years, an 11% increase when compared to 92,000 tonnes in Hudbay’s 2023 pre-feasibility study for Copper World (“2023 PFS”). Average annual cash costsiof $1.65 per pound over the first 10 years continues to position Copper World as one of the lowest cost open-pit copper mines in the U.S.ii Hudbay’s consolidated annual copper production is expected to increase to approximately 250,000 tonnes, doubling current production levels, with other brownfield growth projects underway.

Robust Base Case Project Economics and Strong Returns with Unique Extension Optionality

The base case for the Copper World project (“Base Case”) contemplates a 15-year mine life utilizing mineral reserves, requires only state and local permits and contemplates a comparable total mill feed tonnage to the 2023 PFS. Base Case after-tax net present value (8%) of $1.2 billion and internal rate of return of 17% at a long-term copper price of $5.00 per pound, increasing to $2.3 billion and 22%, respectively, at a copper price of $6.00 per pound. Base Case further optimizes the 2023 PFS mine plan with an in-pit crushing and conveying system in year four and an expansion of the concentrator from 60,000 tons per day to 90,000 tons per day in year five. Concentrator expansion enables a 43% increase in average annual copper production to 120,000 tonnes in years six to 10 compared to 84,000 tonnes over the first five years. The extension case for the Copper World project contemplates a 37-year mine life utilizing only measured and indicated mineral resources and expands mining activities onto federal lands in year 10, subject to obtaining federal permits (“Extension Case”), maintaining annual copper production of 117,000 tonnes from years 11 to 20. The Extension Case incorporates and further optimizes the second phase from Hudbay’s 2022 preliminary economic assessment (“2022 PEA”) with less additional growth capital. Extension Case after-tax net present value (8%) of $2.5 billion and internal rate of return of 19% at a long-term copper price of $5.00 per pound, increasing to $4.0 billion and 24%, respectively, at a copper price of $6.00 per pound.

Copper World is One of the Lowest Capital Intensity Copper Projects, Prudently Funded with Low-Leverage Financing Plan

Initial growth capital of $2.07 billioniii($1.84 billion net of precious metals stream deposit) includes approximately $200 million related to changes in project scope since the 2023 PFS providing an optimized pathway to the expansion to 90,000 tons per day in year five. Copper World maintains an attractive capital intensity of approximately $22,600 per annual copper tonne using average production in years five to twelve, including the expansion capital in years three and four. Well balanced project funding plan with initial capital provided by Mitsubishi’s $600 million initial joint venture equity investment and Wheaton Precious Metals Corp.’s (“Wheaton”) $230 million deposit for the existing precious metals stream, followed by approximately $650 million in anticipated project-level debt financing, representing less than 30% leverage. Balance of funding from Hudbay and Mitsubishi’s pro-rata equity capital contributions is deferred to 2028.

Transformative Copper World Project to be Delivered with Disciplined Capital Allocation and Prudent Funding Plan Leading to Superior IRRs for Hudbay

With the successful execution of its disciplined capital allocation strategy, attracting Mitsubishi as a long-term strategic joint venture partner and prudent project funding plan, Hudbay’s Copper World capital contributions are expected to be approximately $500 million, representing less than 25% of the initial growth capital, with capital contributions not required until 2028. Hudbay is well-positioned to fund capital contributions from its existing cash balance and liquidity, as well as projected strong free cash flow from its diversified operations during Copper World’s project development. The levered IRR to Hudbay increases to 32% at $5.00 per pound of copper long-term in the Base Case and to 44% at $6.00 per pound of copper in the Extension Case. Copper World’s final investment decision enables Hudbay to deliver on its growth initiatives and maximize long-term risk-adjusted returns, while maintaining strong financial discipline within Hudbay’s holistic capital allocation framework. Copper World is expected to deliver average annual EBITDAivof $661 million over the first 10 years in the Base Case and $735 million over the next 10 years in the Extension Case at a copper price of $5.00 per pound. Using a copper price of $6.00 per pound, Copper World’s annual EBITDA over these periods increases to $859 million and $963 million in the Base Case and Extension Case, respectively, representing an 80% to 90% increase in Hudbay’s consolidated annual EBITDA as compared to 2025. Copper World project sanctioning is supported by Hudbay’s strong balance sheet, which has been further improved with a proactive two-year extension of the Company’s senior secured revolving credit facilities from November 2028 to November 2030 and an upsize of the facilities to $700 million. Closing of the upsized credit facilities is expected in the fourth quarter and the extended term will provide increased financial flexibility to manage the maturity of the Company’s 6.125% coupon 2029 senior unsecured notes and develop the Copper World project. The amended credit facilities also include an improved pricing grid reflecting the enhanced financial position of Hudbay and feature an opportunity to increase the facility by an additional $150 million at Hudbay’s discretion during the four-year tenor, providing additional financial flexibility.

Copper World Expected to Deliver Strong Benefits to All Stakeholders for Decades

Copper World is one of the highest-grade open pit copper projects in the Americasvwith proven and probable mineral reserves of 390 million tonnes at 0.47% copper and a 15-year mine life with a low strip ratio of 1.5. Measured and indicated resources of 1.2 billion tonnes (inclusive of reserves) at 0.40% copper have the potential to extend the mine life for decades, to a total of 37 years, as demonstrated by the Extension Case. Significant benefits for the community and local economy in Arizona through payments of $1.1 billion to $3.7 billion in total U.S. taxes and the creation of over 1,000 construction jobs, 500 permanent, multi-generational jobs and up to 3,000 indirect jobs. The fully permitted concentrate leach facility—which would produce "Made in America" copper cathode for the U.S. critical minerals supply chain—represents a key future upside opportunity. Backed by advanced engineering work, it has the potential to add approximately $377 million of additional after-tax net present value to Copper Worldvi.

“The approval of the development of Copper World represents a significant milestone for Hudbay, our partners at Mitsubishi, our stakeholders, and the copper landscape in the U.S.,” said Peter Kukielski, Hudbay’s Chief Executive Officer. “Copper World is one of the most attractive copper growth projects in the Americas, offering some of the highest copper grades, lowest cash costs and favourable capital intensity. This project adds more than 100,000 tonnes of annual copper production over the first 10 years, and the DFS demonstrates the full potential of the project in the Extension Case, delivering higher annual copper production for more than 30 years. It also adds a fourth operating asset to our diversified operating platform and further enhances our tier one operating jurisdictions profile with the addition of the U.S. We are continuing to set the new gold standard in copper as we embark on building a leading copper district in Arizona.”

“The robust Copper World DFS and our joint final investment decision paves the road to production in the second half of 2029, establishing a low-capital intensity, high-margin operation that will generate strong long-term returns for Hudbay, Mitsubishi and our stakeholders,” said Eugene Lei, Hudbay’s President and Chief Financial Officer and Chair of the Copper World Joint Venture Board. “We successfully executed a disciplined capital allocation strategy and ideal funding plan that only requires Hudbay to fund one-quarter of the project capital cost and defers Hudbay’s first capital contribution to 2028, resulting in superior IRRs. We are well-positioned to fund our share of the Copper World project capital and make generational investments in our operating mines with existing cash on hand and strong free cash flow from our diversified operations to double our copper production per share.”

“The final investment decision for Copper World marks the beginning of a new phase for the joint venture,” said Taro Abe, Mitsubishi's Critical Minerals Division COO, Mineral Resources Group. “We are pleased to move forward with the project and advance it toward first production in the second half of 2029. Copper World is important to our growth strategy and the U.S. copper landscape, with the potential to deliver lasting benefits to communities and stakeholders. As a committed long-term partner, we continue to leverage our broad business footprint in North America and extensive experience in mining project development and marketing to maximize the value of the Copper World joint venture.”

Copper World De-Risked and Optimized Through Feasibility and Pre-feasibility Studies

The Copper World project includes four deposits discovered in 2021, together with the East deposit. Copper World is planned to be a traditional open pit shovel and truck operation with a conventional flotation concentrator producing copper concentrate and molybdenum concentrate. A new resource model was completed for the 2022 PEA, which contemplated a two-phased mine plan with Phase I as a stand-alone operation requiring state and local permits only and Phase II expanding onto federal lands requiring federal permits. Phase I contemplated a 60,000 tons per day sulfide concentrator and Phase II assumed an expansion of the concentrator to 90,000 tons per day.

In September 2023, Hudbay released the 2023 PFS for Copper World reflecting the results of further technical work on Phase I of the project. Phase I had a mine life of 20 years, reflecting a 60,000 tons per day sulfide concentrator that would produce copper concentrate as a final product. The 2023 PFS also contemplated the addition of a concentrate leach facility and a solvent extraction and electrowinning plant in year five that would allow the project to produce copper cathode.

Since 2023, Hudbay has focused on metallurgical testing and progressing the engineering of the initial operation to a feasibility study level, in addition to completing related pre-feasibility studies on the mill expansion and IPCC projects listed below, trade-off studies and de-risking activities. Hudbay has also received all major permits required to bring the mine plan into operation under the 60,000 tons per day concentrator scenario and secured Mitsubishi as a 30% joint venture partner.

The principal enhancements since the 2023 PFS include several optimizations:

_Concentrator Expansion to 90,000 tons per day_– The current plan contemplates an expansion of the milling capacity starting in year five to 90,000 tons per day from 60,000 tons per day. The $443 million in capital invested in year four for the concentrator expansion is expected to be funded from cash flows from the operation and a $70 million additional payment from Wheaton in year five. _In-Pit Crushing and Conveying (“IPCC”)_– Copper World’s development plan contemplates the addition of an IPCC system starting in year four to efficiently manage the higher mined material tonnages to match the concentrator expansion throughput in year five. The IPCC system will have a nominal design capacity of 100,000 tons per day and forms a critical component of the mine plan that will convey ore from the East pit to stockpiles and the processing plant. The IPCC will enable fewer haul trucks and lower emissions and operating costs. _Enhanced Tailings Strategy_– The current plan contemplates a conversion from conventional tailings deposition to filtered tailings for approximately one-third of the total volume of tailings in the Base Case starting in year five, enabling the concentrator expansion with no additional water supply required. _Lower Mine Strip Ratio _– The mine plan has been optimized for space constraints for tailings and waste rock disposition in the Base Case, reflecting a new flotation recovery formulation with updated price and cost assumptions and resulting in an approximately 20% smaller East pit with a significant reduction in the strip ratio through lower waste mined. _Extension Case Illustrates Project’s Full Potential _– Pre-feasibility work has been advanced on the scenario that contemplates an extension of mining activities onto Copper World’s unpatented claims and the associated federal lands in year 10, subject to obtaining federal permits. The Extension Case incorporates and further optimizes the second phase from Hudbay’s 2022 PEA, illustrating the full potential of Copper World and extending the mine life to 37 years. Under FAST41, mining projects in Arizona have received federal permits in approximately three years. _Concentrate Leach Facility Continues to Provide Future Optionality_– Significant engineering work has advanced to pre-feasibility level on the concentrate leach facility to establish its technical viability and provide the option to produce “Made in America” copper cathode in the future. The Company will continue to evaluate Copper World’s concentrate leach facility considering future market conditions, such as premiums for copper metal in the U.S., and the unique strategic opportunity it presents as one of the few fully permitted domestic copper cathode producing facilities in the U.S. It also presents opportunities to unlock potential synergies with Hudbay’s Cactus project in Arizona.

2026 DFS Summary

The _Base Case_presented in the DFS is used to support the mineral reserve estimates of 390 million tonnes with strong copper grades of 0.47% over a 15 year mine plan. Total mill feed tonnage in the Base Case is comparable to the 2023 PFS. The Base Case is limited to the exterior boundary of Copper World’s private landholdings requiring only state and local permits. All major permits have been obtained for construction and initial operations. Please refer to Figure 1 for an overview of the site layout in the Base Case.

Base Case after-tax net present value (8%) is $1.2 billion with an internal rate of return of 17% and an initial payback period of 5.4 years at a long-term copper price of $5.00 per pound. At a copper price of $6.00 per pound, the after-tax net present value (8%) increases to $2.3 billion and the internal rate of return increases to 22%. Base Case average annual copper production is 102,000 tonnes over the first 10 years at average cash costsiand sustaining cash costsiof $1.65 and $2.22 per pound of copper, respectively. Base Case annual average EBITDA is $566 million at a long-term copper price of $5.00 per pound, increasing to $742 million at a long-term copper price of $6.00 per pound.

The _Extension Case_reflects a phased development approach that minimizes initial waste rock movement while operations remain constrained to the existing exterior boundary over the first 10 years and then expand beyond Copper World’s private property and onto its unpatented lode and mill site claims starting in year 10 to achieve and sustain a higher total material movement capacity. The Extension Case contemplates a 37-year mine life utilizing only measured and indicated mineral resources totalling 1,048 million tonnes and requires federal permits by year 10 of operations.

Extension Case after-tax net present value (8%) is $2.5 billion with an internal rate of return of 19% and an initial payback period of 5.4 years at a long-term copper price of $5.00 per pound. At a copper price of $6.00 per pound, the after-tax net present value (8%) increases to $4.0 billion and the internal rate of return increases to 24%. Extension Case average annual copper production over the first 10 years is similar to the Base Case with 101,000 tonnes and increases to 117,000 tonnes on over the period from year 11 to 20. Average cash costsiand sustaining cash costsiover the 10-year period from year 11 to 20 are expected to be $1.76 and $2.20 per pound of copper, respectively. Extension Case average annual EBITDA is $522 million over the mine life and $735 million over the period from year 11 to 20 at a long-term copper price of $5.00 per pound.

As shown in Figure 2, following the concentrator expansion in year five, annual copper production increases to an average of 122,000 tonnes between year five and year twelve in the Base Case, excluding low-grade stockpile years at the end of the mine life, and average annual cash costsidecrease to $1.46 per pound of copper over this period. The elevated production levels further extend to beyond year 20 in the Extension Case as additional resources are mined and utilize the larger concentrator capacity.

A summary of key valuation, production and cost details can be found below. For further details, including operating and cash flow metrics provided on an annual basis, please refer to Exhibit 1 at the end of this news release.

| BASE CASE – Summary of Key Metrics (at $5.00/lb Cu long-term) | | | | | | | | | | | | | | | | | | Valuation Metrics (Unlevered)1 | Unit | Base Case | | | | | | | | | | | | | | | | Net present value @ 8% | $ millions | $1,241 | | | | | | | | | | | | | | | | Internal rate of return | % | 16.8% | | | | | | | | | | | | | | | | Payback period | # years | 5.4 | | | | | | | | | | | | | | | | Initial & Expansionary Capital | Unit | Base Case | | | | | | | | | | | | | | | | Growth capital – initial (year -3 to year -1)2 | $ millions | $2,070 | | | | | | | | | | | | | | | | Growth capital – molybdenum plant (year 1) | $ millions | $25 | | | | | | | | | | | | | | | | Growth capital – IPCC (year 3)3 | $ millions | $242 | | | | | | | | | | | | | | | | Growth capital – concentrator expansion (year 4)3 | $ millions | $443 | | | | | | | | | | | | | | | | Operating Metrics | Unit | Years 1-5 | Years 6-10 | Years 11-15 | Years 1-10 | LOM | | | | | | | | | | | | Copper production (annual avg.)4 | 000 tonnes | 84 | 120 | | 77 | 102 | | 95 | | | | | | | | | | EBITDA (annual avg.)5 | $ millions | $531 | $791 | $377 | $661 | $566 | | | | | | | | | | | | Sustaining capital (annual avg.) | $ millions | $50 | $35 | $11 | $43 | $32 | | | | | | | | | | | | Cash cost6 | $/lb Cu | $1.80 | $1.55 | $1.85 | $1.65 | $1.70 | | | | | | | | | | | | Sustaining cash cost6 | $/lb Cu | $2.57 | $1.98 | $2.17 | $2.22 | $2.21 | | | | | | | | | | | | BASE CASE – Copper Price Sensitivity Analysis | | | | | | | | | | | | | | | | | | | Unit | $4.50/lb | Base Case $5.00/lb | $5.50/lb | $6.00/lb | $6.50/lb | | | | | | | | | | | | Net present value1 @ 8% | $ millions | $663 | | $1,241 | | $1,725 | | $2,258 | | $2,783 | | | | | | | | Net present value1@ 10% | $ millions | $345 | | $845 | | $1,254 | | $1,708 | | $2,156 | | | | | | | | Internal rate of return1 | % | | 12.9% | | | 16.8% | | | 19.5% | | | 22.5% | | | 25.2% | | | Payback period | # years | | 5.9 | | | 5.4 | | | 5.1 | | | 4.8 | | | 4.5 | | | EBITDA (annual avg.)5 | $ millions | $471 | | $566 | | $652 | | $742 | | $833 | | | | | | |