Hudbay Minerals Inc. Mining Forum Americas 2026

First, thanks very much for having me here today, Lawson. There's a bunch of questions that I need to unpack. Fundamentally what today's announcements represented was more gold in the near term, more gold in the long term, and lots more opportunity ahead beyond what we see in the reserves and the resources that we have. What we announced today was essentially an increase of 60% of our life of mine gold assets in Snow Lake, Manitoba. It represents also steady production at about 185,000 ounces per year for the next five years in reserves, and we think significantly beyond that. What we've done really is 150,000 ounces of gold relative to the 2021 mine plan. If you think of that in terms of margin and value, that's close to CAD 1 billion of value that we've added today.

What's not included in the announcement really but we touch on it is some of the opportunities that lie ahead of us in Snow Lake, specifically one of them being the Britannia Gold Project. Britannia Gold Project, a series of deposits sort of anchored by what came along with the New Britannia Mill, which was the New Britannia Mine at the time. There's a resource down there. It was mined until the early 2000s when it was shut down because of gold price. We think if you look at the resource that's there and you couple it with some of the other resources that are almost contiguous with it, we think that there may be a fault structure that actually links those assets, so we need to do some exploration.

This is all additive to what we release as resources and reserves. On the question of what this means longer term for Hudbay and where gold sits in the portfolio. We used to always get asked the question, does gold belong in your portfolio? In those days, gold really was a counter-cyclical investment for us. Today it seems to be running in parallel with copper almost. Today it's providing very, very significant free cash flow to us, which funds our very well. When we were asked maybe five years ago, "Does it really belong in your portfolio? Should you sell it? You're not getting the right multiples." Our answer was, we want to identify some of the upside first. We don't want to give it away. I still feel the same.

There's so much upside in this camp that unless somebody wants to come and just give us a knockout preemptive offer for it's going to continue to drive cash flows which aid our ability to invest in the business and to deliver cash flows back to our shareholders in terms of sustainable dividends.

I mean, we're super excited about what lies ahead. I think we expect to issue the definitive feasibility study weeks ahead, certainly before our Q3 results. When we deliver the definitive feasibility study, that'll be accompanied by a final investment decision. Our final investment decision really is moving along in sync with our partner, Mitsubishi Corporation, who has their own series of internal approvals and will conduct those at roughly the same time. The key milestones will be obviously the final investment decision, which will come forward in the next several weeks. We'll continue then with detailed engineering. We'll place orders for all of the long lead items, get going on the construction, be a 2.5-year build. So we would complete the project or construction completion in third quarter of 2029, ramp up through the remainder of 2029, full production in 2030.

Projects always have interim milestones that'll be interesting for our shareholders, but the ones that people really need to focus on right now are final investment decision and then completion of construction.

Yeah. For people in the audience who do not know the project, the preliminary feasibility study was issued back in October of 2023. The capital estimate at the time was $1.5 billion, of which $200 million represented equipment financing. So $1.3 billion net of equipment financing, but the headline number is $1.5 billion. In those three years, we have seen escalation, we have seen some inflation associated with the current environment. We have seen tariffs, which of course have added to the cost of some of the imported components. We have seen an increase of about a couple of hundred percent in the cost of steel. So that all accumulates to the concept that, of course, there is going to be escalation and inflation in the estimate.

You have to remember that in the interim, the copper price has moved from $3.75 in our PFS to, I have no idea what it is today, but it is approaching $7. So regardless of what the final capital estimate is, this is a project that is likely more robust than it was in 2023. I do not have a number today because we have not issued the definitive feasibility study, but I think you get where I am coming from. I think that it is fair to say that there will be a fairly significant of escalation, but nothing beyond what is expected by our analyst community. I think we are well in line with what is expected by the analyst community. Then if you layer that on with the escalation of the copper price in the meanwhile, you have a project that is going to deliver a value and an IRR of 20% plus.

Remember, this is the highest grade copper project in, or certainly the highest grade sulfide copper project in the Union. What is not to love about that? It is 20-year mine life in phase one. Phase two takes us to 40 years. I should also add that there are elements that need to be contemplated as we determine exactly what the cost is going to be, because there will be an element of scope change in all likelihood, because we are contemplating an expansion of the concentrator in the first five years. A couple of reasons. We phase two, and it makes sense to do that. Our partners, Wheaton Precious Metals, have also agreed to pay us $70 million if we expand the concentrator in the first five years. So it certainly makes sense to do that.

Now, to do that, if we were to simply conduct phase one on its own and then in five years' time come back and expand, you would incur all kinds of disruptions. So what we are looking at, the trade-off that we are looking at right now is to expand the footprint of the concentrator a little bit, make a provision for concrete, make a provision for increased size of piping, perhaps some pumping capacity, and that will no doubt add to the capital estimate a little bit too.