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HudBay Minerals Inc.
(TSX:HBM)(NYSE:HBM) -
Highlights
-- Production of all key metals and costs remain on track to meet 2011 guidance -- Profit before asset impairments(i) increased to $40.0 million, or $0.23 per share, in the second quarter of 2011, compared to $4.4 million, or $0.03 per share, during the second quarter of 2010 -- Lalor development proceeding on schedule with the main production hoist and man hoist starting to arrive on site for installation in the third quarter of 2011 -- Exploration drilling continues to encounter high grade copper (3.23% copper equivalent over 52.5 meters and 1.54% copper equivalent over 44.7 meters) at Pampacancha, demonstrating the continuity of the deposit, with geophysical surveys completed on the Chilloroya South and Pampacancha prospects -- Exploration drilling at 100% owned Tom and Jason zinc-lead rich properties in the Yukon will test possible extensions of known mineralization and provide metallurgical samples and information required for a preliminary economic assessment in early 2012 -- Semi-annual dividend of $0.10 per share declared
HudBay Minerals Inc.
("HudBay", the "company") today released its second
quarter 2011 financial results. Profit before asset impairments(i)
related mainly to the Fenix nickel project in Guatemala, increased to $40.0
million, or $0.23 per share, in the second quarter of 2011, compared to $4.4
million, or $0.03 per share, during the second quarter of 2010. During the
second quarter of 2011, HudBay recognized pre-tax impairment losses of $212.7
million on the Fenix project and $1.4 million related to available-for-sale
investments. Including the impairment losses, the second quarter loss
attributable to shareholders was $171.9 million, or $0.97 per share. Profit
before asset impairments grew during the quarter mainly due to higher metal
prices and sales volumes. HudBay's board of directors has declared a
semi-annual dividend in the amount of $0.10 per common share, payable on
September 30, 2011 to shareholders of record on September 15, 2011.
"Our operating mines delivered very strong performance during the second
quarter of 2011 and we remain confident in our ability to meet our production
and cost guidance for the remainder of the year," said David Garofalo,
HudBay's president and chief executive officer.
(i)Refer to "Non-IFRS Measures" at the conclusion of this press
release
"We have also been successful in securing the railcars needed to
significantly reduce the copper concentrate inventory levels at our northern
Manitoba operations. We made good progress on our strategic objectives, with
the announcement of an optimized project plan and commitment to a new
concentrator at Lalor, progress towards a development decision at Reed,
continued exploration success with high grade drill intercepts in Peru, in
addition to front-end engineering for the Constancia project."
Strong Revenue Growth Due to Higher Metals Prices and Sales Volumes
HudBay generated strong revenue growth as a result of higher metal prices and
higher sales volumes. Results for the second quarters of 2011 and 2010 have
been presented in accordance with International Financial Reporting Standards
("IFRS"). Compared to results for the second quarter of 2010
previously reported under Canadian generally accepted accounting standards
("CGAAP"), IFRS profit for the second quarter of 2010 includes
additional exploration expenses of $11.5 million primarily related to the
Lalor project. Other differences between CGAAP and IFRS and their impact on
the company's financial results are described in HudBay's interim financial
statements for the second quarter of 2011.
On August 5, 2011, HudBay announced it had entered into a definitive
agreement with the Solway Group ("Solway") to sell 100% of the
company's interest in the Fenix ferro-nickel project in Guatemala for US$140
million in cash at closing and US$30 million upon the satisfaction of certain
conditions during the course of Solway's development of the project. Closing
of the transaction is expected to occur in the third quarter of 2011. HudBay
recognized an impairment loss related to its investment in Fenix of $212.7
million during the second quarter.
Co-product costs per unit sold in the second quarter of 2011 were $1.50 per
pound of copper, $266 per ounce of gold and $1.00 per pound of zinc.(i) Co-product costs of copper increased compared to the
first quarter of 2011 as by-product credits included the one-time sale of
copper bearing material in the first quarter following the closure of the
company's copper smelter and refinery.
The company was pleased with its cost control at its flagship 777 mine as mining
costs of $33.49 per tonne were essentially unchanged from the 2010 comparable
period. As expected, unit mining costs per tonne at Trout Lake and Chisel
North increased over the prior year due to the complex nature of these
late-stage mining operations and reduced cost capitalization given the short
remaining mine life. These costs are expected to remain within the range of
guidance for 2011 in HudBay's press release dated December 13, 2010.
Trout Lake's mine life is expected to be extended slightly to the end of the
first quarter of 2012 from the end of 2011, as previously projected. Unit
operating costs at our Flin Flon and Snow Lake concentrators are also
expected to remain within previous guidance over the full year. Unit costs at
Flin Flon of $14.15 per tonne in the second quarter were higher than the
average expected for the full year due to scheduled downtime for preventative
maintenance.
Sales of copper concentrate benefited from substantially improved access to
railcar capacity, both from leased cars as well as railway-supplied cars.
Copper concentrate inventories at Flin Flon have continued to be drawn down,
and HudBay continues to expect copper concentrate sales to exceed production
in the remaining two quarters of 2011, resulting in the sale of most of the
excess inventory.
Strong Cash Flow Generation
Operating cash flow before changes in non-cash working capital(i) increased
to $63.5 million, or $0.37 per share, in the second quarter of 2011 from
$32.5 million, or $0.22 per share, in 2010 mainly as a result of higher
metals prices and sales volumes. Capital expenditures increased to $55.2
million due to the acceleration of construction at Lalor and commencement of
pre-construction activities at Constancia, offset in part by reduced sustaining
capital expenditures.
Cash and cash equivalents decreased to $747.7 million at June 30, 2011 from
$901.7 million at December 31, 2010. The decrease in cash and cash
equivalents during 2011 was due mainly to our acquisition of Norsemont,
capital expenditures, strategic investments and payment of dividends.
Together with our unused credit lines, HudBay has available liquidity of
approximately $1.0 billion and no debt. While the company believes that the
Lalor and Constancia projects can be financed from existing resources and
future cash flows, it expects to arrange additional debt financing at either
the corporate or project level to maintain optimum financial flexibility.
For additional information on HudBay's second quarter 2011 financial results,
please refer to the Second Quarter 2011 Supplemental Disclosure document at:
http://media3.marketwire.com/docs/HBMSUPP0809.pdf
Lalor Development Proceeds on Schedule;
New Concentrator to Be Constructed
The Lalor project's development and site construction are proceeding on
schedule. As at August 8, 2011, the Lalor project has gone over 600 days
without a lost time accident.
On July 5, 2011, the company committed to an incremental $144 million
investment to construct a new concentrator and paste backfill plant at the
Lalor site. The project's overall budget is now $704 million, which includes
$441 million for the construction of the mine and associated infrastructure,
and $263 million for a concentrator and backfill plant adjacent to the main
production shaft.
The new concentrator will have a milling capacity of 4,500 tonnes per day and
is expected to allow for reduced operating costs, improved economies of scale
and efficiencies compared to upgrades to the company's Snow Lake
concentrator. HudBay has spent approximately $122 million on the project to
June 30, 2011.
The company continues to make significant progress on the planned 3,200 meter
access ramp at the Lalor project, having advanced close to 2,500 meters since
the start of the project in December 2009. The ramp is intended to extend to
the base of the ventilation shaft that is currently under construction.
HudBay expects to complete the ramp to the 810 meter level and continue with
multiple headings by the fourth quarter of 2011. HudBay plans to reach the
ventilation site in the first quarter of 2012, start diamond drilling from
underground, access the ore zones and proceed to the main production shaft
location.
The ventilation shaft has been presunk to the 30 meter level and construction
is complete on the temporary headframe and hoist arrangement to support the
sinking.
The shaft crews have commissioned the sinking equipment and, as of August 8,
2011, the shaft has been sunk to a depth of approximately 63 meters. The
ventilation shaft is scheduled to be completed in the second quarter of 2012,
after which first ore production is expected up the ventilation shaft.
HudBay has started construction on the permanent main fresh air fan and
heater system for the ramp. This work is scheduled to be completed during the
summer of 2011 in preparation for the next heating season.
Construction is proceeding on the main site. The polishing pond (settling
pond) is complete and being used for the water from the ventilation shaft
sink. The water treatment plant is moving ahead with piping, and the civil
foundation work is complete. The ventilation plenum, main shaft collar and
production hoist foundations have been excavated. Framing and concrete pours
for the shaft hoist foundations are proceeding.
Steeling framing is arriving on site for the hoist house building and is
currently being erected, with headframe steel to follow.
The construction camp in Snow Lake is fully commissioned, and HudBay can now
accommodate 196 construction workers.
Procurement and tendering is ongoing on the long-lead items. The main
production hoist and man hoist have started to arrive on site for
installation in the third quarter of 2011.
HudBay is continuing with metallurgical testing of Lalor ores, focusing on
gold recovery optimization and environmental testing of the potential water
effluent from the concentrator. Work continues on optimization of the reagent
used and projected consumption.
Three drills are operating near the Lalor project, with two drills
concentrating on geophysical anomalies peripheral to the deposit. An
underground drill from the Lalor ramp is testing geophysical and geological
targets. Results will be disclosed as they are compiled and evaluated.
Exploration Drilling Continues at the Constancia Project;
Assays from Infill Holes Demonstrate Continuity of Copper Mineralization
The exploration permits required to continue testing the mineralized extent
of the Pampacancha deposit to the west and south of drill hole PO-11-072,
which intersected 121.45 meters of 1.62% copper (see HudBay's press Release
dated June 14, 2011), were received during the second quarter of 2011.
The geophysical surveys over Chilloroya South and Pampacancha are now
complete and results are being interpreted. One diamond drill will be
diverted from the exploration program in the short term to facilitate the
geotechnical program and maintain the project schedule, while three drills
will continue to explore Pampacancha.
Highlights from recent infill drilling on the Pampacancha deposit include the
following:
---------------------------------------------------------------------------- Cu HOLE Length From To (%) Mo- (ppm) Ag- (g/t) Au-(g/t) Cu Eq (%) ---------------------------------------------------------------------------- PO-11-077 52.50 7.00 59.50 2.48 262 3.23 0.99 3.23 ---------------------------------------------------------------------------- PO-11-079 44.70 62.3 107 1.06 419 6.00 0.33 1.54 ---------------------------------------------------------------------------- Note: Calculated using commodity prices of US$1,000/oz Au, US$20.00/oz Ag, US$2.50/lb Cu and US$13.00/lb Mo. Copper cut-off reported as 0.2%. Composited intersections are reported as core length and do not represent true width. Composited intersections reported considered maximum internal dilution of 6 meters and minimum reported interval length of 6 meters. HOLE Easting Northing Elevation Azimuth Dip Depth PO-11-077 204,751.00 8,397,051.00 4,200.70 88.00 -86.00 203.40 PO-11-079 204,645.00 8,397,055.00 4,218.30 94.00 -85.00 183.90 Note: Collar coordinates, National Grid UTM coordinates based on the Provisional South America 1956 (PSAD56) datum 19S
Additional drill results and a
plan map showing the location of the Pampacancha drill holes can be viewed at
http://www.hudbayminerals.com/ourBusiness/exploration.php#.
For additional detail on Pampacancha and the Constancia project generally,
refer to Norsemont Mining Inc.'s NI 43-101 technical report entitled
"Norsemont Mining Constancia Project Technical Report 21 February
2011" (the "Constancia Technical Report"), available under
Norsemont's profile at www.sedar.com.
Constancia Feasibility Study Optimization is Ongoing;
On Track Toward Construction Decision in Early 2012
On March 31, 2011, HudBay announced a 2011 pre-construction program for the
Constancia project with a total budget of US$116 million. The program
contemplates early equipment procurement for long lead items, a resource
model update, metallurgy review, pit optimization study, geotechnical and
condemnation drilling and a US$9 million exploration program.
HudBay is conducting a technical review of the feasibility study optimization
("FSO") completed by Norsemont in February 2011, to consider
initiatives from its earlier due diligence review and the requirements of the
existing FSO project schedule, which currently remains the project base case.
Subject to Board approval, HudBay expects construction to begin in early
2012, leading toward the first full year of production by 2016.
This work includes items such as additional resource modelling, geotechnical
and hydrogeological studies along with further condemnation drilling. Actions
are also underway to move the project forward into the next phase of
engineering and to prepare for project construction.
To maintain the FSO schedule, procurement of long lead items such as the
grinding mills and mining fleet is expected to commence by the end of 2011.
Reed Copper Project;
Advancing Pre-feasibility Work
Pursuant to a joint venture with VMS Ventures Inc, ("VMS"), HudBay
has a 70% interest in the Reed copper project, which is a high-grade
near-surface copper deposit that could be accessed via a ramp with the ore
trucked to HudBay's Flin Flon concentrator.
A pre-feasibility study and the technical activities required for permitting,
including metallurgical and geotechnical testing and mine design, are underway.
An application for an advance exploration permit is expected to be submitted
in the third quarter.
Two drills are operating at the Reed copper project and targeting regional
geophysical anomalies within three kilometers of the project with an aim to meet
work commitment requirements on properties under option from VMS.
Back Forty Project;
Feasibility Study and Permit Application Targeted for Second Quarter 2012
Preparation for a permit application and an economic assessment at the Back
Forty project are ongoing. Current engineering efforts are focusing on the
optimal size and scope of the project. Preliminary economic guidance is
expected before year end. HudBay intends to complete a feasibility study and
submit a permit application by the second quarter of 2012.
Drilling on several near deposit geophysical anomalies is scheduled to begin
in the third quarter of 2011. The exploration alliance with Aquila Resources
Inc. has yielded some promising greenfield geophysical targets to date, which
will be further examined during the balance of the year.
Tom and Jason Properties;
Exploration to begin Mid-August
Exploration at HudBay's Tom and Jason properties in the Yukon is set to begin
in mid-August with two drills testing possible extensions to known mineralization
and enabling collection of metallurgical samples required for the preparation
of economic assessments. The Tom and Jason properties include an indicated
mineral resource of 6.4 million tonnes of 6.33% zinc, 5.05% lead, and 56.55
g/t silver and an inferred resource of 24.6 million tonnes of 6.71% zinc,
3.48% lead and 33.85 g/t silver. The exploration on these properties is
intended to assist with upgrading and expanding the current mineral resource
and provide the necessary information for a preliminary economic assessment
in early 2012.
Key Financial Results
---------------------------------------------------------------------------- ($000s except per share Three Months Ended Six Months Ended amounts) June 30 June 30 ---------------------------------------------- 2011 2010 2011 2010 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Revenue 246,823 187,341 424,168 428,647 ---------------------------------------------------------------------------- Profit before tax and asset impairments(2,3) 69,908 19,926 105,208 54,905 ---------------------------------------------------------------------------- Profit before asset impairments(2,3) 39,967 4,431 56,764 15,014 ---------------------------------------------------------------------------- EPS(1) before asset impairments(2,3) 0.23 0.03 0.35 0.10 ---------------------------------------------------------------------------- (Loss) profit before tax (145,672) 19,794 (112,082) 54,783 ---------------------------------------------------------------------------- (Loss) profit (171,878) 4,299 (156,791) 14,892 ---------------------------------------------------------------------------- Basic and diluted (loss) EPS(1) (0.97) 0.03 (0.92) 0.10 ---------------------------------------------------------------------------- Operating cash flow(3,4) 63,467 32,499 109,803 82,013 ---------------------------------------------------------------------------- Operating cash flow per share(3,4) 0.37 0.22 0.67 0.54 ---------------------------------------------------------------------------- Cash and cash equivalents 747,710 911,778 747,710 911,778 ---------------------------------------------------------------------------- Total assets 2,348,226 1,984,576 2,348,226 1,984,576 ---------------------------------------------------------------------------- (1) Earnings per share. (2) Attributable to owners of the Company (3) Refer to "Non-IFRS measures" at the conclusion of this press release. (4) Before changes in non-cash working capital.
Non-IFRS Measures
Operating cash flow before changes in non-cash working capital, operating
cash flow per share, cash cost per pound of zinc sold, co-product cash costs
per unit sold, profit before tax and asset impairments, profit before asset
impairments and earnings per share before asset impairments are included in
this news release because these measures are performance indicators that we
use internally to monitor performance. We use these measures to assess how
well we are performing compared to plan and to assess the overall
effectiveness and efficiency of mining, processing and refining operations.
We believe that the inclusion of these measures in the news release helps an
investor to assess performance "through the eyes of management" and
that certain investors use these measures to assess our performance.
These measures do not have a meaning presented by IFRS and should not be
considered in isolation or as a substitute for measures prepared in
accordance with IFRS. These measures are not necessarily indicative of operating
profit or cash flow from operations as determined under IFRS. Other companies
may calculate these measures differently.
Operating cash flow before changes in non-cash working capital and operating
cash flow per share
The following table presents our calculations of operating cash flow before
changes in non-cash working capital and operating cash flow per share for the
three months and six months ended June 30, 2011 and June 30, 2010.
---------------------------------------------------------------------------- Three Months Ended Six Months Ended ---------------------------------------------------- ($000s except share and June 30 June 30 June 30 June 30 per share amounts) 2011 2010 2011 2010 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Cash generated by operating activities, per financial statements 82,000 72,860 74,656 137,230 Adjustments: Changes in non-cash working capital (8,463) (18,112) 2,375 (17,313) Changes in tax receivable (5,417) (4,098) 7,568 (15,313) Changes in tax payable, excluding effect of OCI items (4,653) (18,151) 25,204 (22,591) ---------------------------------------------------------------------------- Operating cash flow before changes in non- cash working capital 63,467 32,499 109,803 82,013 Weighted average shares outstanding 171,381,834 150,795,852 163,737,799 152,215,266 ---------------------------------------------------------------------------- Operating cash flow per share $0.37 $0.22 $0.67 $0.54 ----------------------------------------------------------------------------
This measure is intended to
provide an indication of HudBay's operating cash flow generation prior to the
impact of fluctuations in working capital accounts, including taxes payable
and receivable (but excluding the effect of OCI items).
Under CGAAP, "Changes in non-cash working capital" in the statement
of cash flows included changes in taxes payable and receivable (but excluding
the effect of OCI items), whereas IFRS presentation requires that taxes paid
be presented separately in the statement of cash flows.
This non-IFRS measure generates results that are comparable to HudBay's
previous non-GAAP presentation of Operating cash flow before changes in
non-cash working capital.
Cash cost per pound of zinc sold
HudBay's cash cost per pound of zinc sold, net of by-product credits, for the
second quarter of 2011 was negative US$1.12 per pound, representing costs
associated with HBMS operations, as calculated in the following table:
---------------------------------------------------------------------------- Three Months Ended Six Months Ended -------------------------- -------------------------- June 30 June 30 June 30 June 30 ($000s except as noted) 2011 2010 2011 2010 ---------------------------------------------------------------------------- Other cost of sales 126,064 111,132 220,935 253,765 Selling and other operating expense 1,229 1,451 3,040 2,137 ----------------------------------------------------- 127,293 112,583 223,975 255,902 Less by-product credits(1) (188,224) (142,218) (306,850) (308,702) ----------------------------------------------------- Cash cost net of by- products (60,931) (29,635) (82,875) (52,800) Exchange rate (US $1 to C$)(2) 0.968 1.028 0.977 1.034 ----------------------------------------------------- Cash cost net of by- products US (62,945) US (28,828) US (84,826) US (51,064) Zinc sales (000's lbs.) 56,176 49,112 111,022 114,735 ----------------------------------------------------- Cash cost per pound of zinc sold, net of by-product credits in US $/lb. US (1.12) US (0.59) US (0.76) US (0.45) ---------------------------------------------------------------------------- (1) By-product credits include revenues from sale of copper, gold, silver, the value added by converting zinc to zinc oxide, and by-product sales. (2) Weighted average exchange rate for sales during the period.
HudBay's calculation of cash cost
per pound of zinc sold is significantly influenced by by-product metal
prices, which may fluctuate going forward.
Co-product cash costs per unit sold
In the third quarter of 2010, HudBay introduced co-product cash costs as a
new non-IFRS measure. The company believes these costs serve as meaningful
indicators for investors to evaluate HudBay's operations.
Costs for the second quarter of 2010 have not been included for comparability
because they included substantial purchased copper concentrate volumes
together with the cost of the smelter and refinery, which were closed in
2010.
Whereas cash costs net of by-product credits present the cash costs of a
single metal, assuming that all other metals are by-products of the given
metal, co-product cash costs present a cost of producing each of our primary
metals, copper, zinc and gold, based on an allocation of costs among the
metals. Costs that can be readily associated with a specific metal are
allocated to that metal. Mining and milling costs for HudBay's Trout Lake and
777 mines are allocated proportionately based on the value of the contained
metals at prevailing metals prices. Operating overhead expenses and site
administrative expenses (in both cases, excluding costs not related to
HudBay's HBMS operations) are generally allocated equally between zinc and
copper with some further cost allocation to gold.
In order to present a cost per finished unit sold, the company also adds to
these costs third party treatment and refining costs, which are deducted from
revenue in HudBay's financial statements.
We treat zinc oxide production as a by-product of zinc production, so the
costs of our Zochem operation are allocated to zinc operating expenses, and
zinc oxide revenues are deducted from total zinc cash costs. Similarly, we
treat silver production as a by-product of gold production. Copper
by-products include the one-time sale of copper bearing material from the
closure of the WPCR. Other miscellaneous revenues are allocated among zinc,
copper and gold in the same manner as general and administrative costs unless
specific to either the zinc or copper processing.
While we expect the impact of fluctuating metals prices to be less
significant on co-product cash costs than it is on by-product cash costs,
changes in relative metals prices may cause our reported cash costs to vary
substantially over time, irrespective of our operational results. Significant
management judgement is also required in determining how costs should be
allocated among metals. Caution should also be exercised in using co-product
cash costs to evaluate the profitability of a particular metal, as the
profitability of our polymetallic mines is dependent on the production of all
of our principal metals.
Three Months Ended June 30, 2011
---------------------------------------------------------------------------- ($000s except as noted) Copper Zinc Gold Total ---------------------------------------------------------------------------- Other cost of sales 47,435 64,926 13,703 126,064 Treatment and refining costs(1) 7,685 - 2,548 10,233 ------------------------------------------- 55,120 64,926 16,251 Zinc oxide and by-product revenues (4,421) (8,485) (8,906) -------------------------------- Co-product costs 50,699 56,441 7,345 Sales volume(2) 33,880 56,175 27,632 -------------------------------- Co-product cash costs per unit(2) sold $1.50 $1.00 $266 ---------------------------------------------------------------------------- (1) Treatment and refining costs are deducted from revenue (2) Copper and zinc sales volumes denoted in 000's pounds, and gold sales volumes denoted in troy oz.
Six Months Ended June 30, 2011
---------------------------------------------------------------------------- ($000s except as noted) Copper Zinc Gold Total ---------------------------------------------------------------------------- Other cost of sales 72,273 128,746 19,916 220,935 Treatment and refining costs(1) 12,054 - 3,601 15,655 ------------------------------------------- 84,327 128,746 23,517 Zinc oxide and by-product revenues (18,293) (17,371) (13,047) -------------------------------- Co-product costs 66,034 111,375 10,470 Sales volume(2) 52,480 111,022 40,582 -------------------------------- Co-product cash costs per unit(2) sold $1.26 $1.00 $258 ---------------------------------------------------------------------------- (1) Treatment and refining costs are deducted from revenue (2) Copper and zinc sales volumes denoted in 000's pounds, and gold sales volumes denoted in troy oz.
Profit before tax and asset
impairment, profit before asset impairment, earnings before asset impairment
per share(1)
---------------------------------------------------------------------------- Three Months Ended Six Months Ended ---------------------------------------------------- Jun. 30 Jun. 30 Jun. 30 Jun. 30 ($000s except per share amounts) 2011 2010 2011 2010 ---------------------------------------------------------------------------- (Loss) profit (171,878) 4,299 (156,791) 14,892 Adjustments: Taxes 26,206 15,495 44,709 39,891 Impairment, available- for-sale investments 1,390 - 1,390 - Impairment, Fenix 212,739 - 212,739 - ---------------------------------------------------------------------------- Profit before tax and asset impairments 68,457 19,794 102,047 54,783 Add: non-controlling interest 4,959 132 6,669 122 ---------------------------------------------------------------------------- Less: impairment loss attributable to non- controlling interests (3,508) - (3,508) - ---------------------------------------------------------------------------- Profit before tax and asset impairments(1) 69,908 19,926 105,208 54,905 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Profit before tax and asset impairments(1) 69,908 19,926 105,208 54,905 Less: taxes (26,206) (15,495) (44,709) (39,891) ---------------------------------------------------------------------------- Adjust for: tax recovery related to impairment of available-for-sale investment (174) - (174) - ---------------------------------------------------------------------------- Adjust for: tax recovery related to impairment of Fenix (3,561) - (3,561) - ---------------------------------------------------------------------------- Profit before asset impairments(1) 39,967 4,431 56,764 15,014 ---------------------------------------------------------------------------- Weighted average number of common shares outstanding 171,381,834 150,795,852 163,737,799 152,215,266 ---------------------------------------------------------------------------- Earnings before asset impairment per share(1) $0.23 $0.03 $0.35 $0.10 ---------------------------------------------------------------------------- (1) Attributable to owners of the company.
Please also see HudBay's
consolidated financial statements and related notes together with
Management's Discussion and Analysis of Operations and Financial Condition
for the quarter ended June 30, 2011, which are available under HudBay's SEDAR
profile at www.sedar.com and
HudBay's website at www.hudbayminerals.com. All
amounts are in thousands of Canadian dollars unless otherwise noted.
Website Links
HudBay Minerals Inc.:
www.hudbayminerals.com
Management's Discussion and Analysis:
http://media3.marketwire.com/docs/HBMMDA0809.pdf
Financial Statements:
http://media3.marketwire.com/docs/HBMFS0809.pdf
Second Quarter 2011 Supplemental Disclosure
http://media3.marketwire.com/docs/HBMSUPP0809.pdf
Conference Call and Webcast
Date: Wednesday, August 10, 2011 Time: 8:30 a.m. ET Webcast: http://www.hudbayminerals.com/ Dial in: 416-644-3418 or 800-814-4861 Replay: 416-640-1917 or 877-289-8525 Replay Passcode: 4458908#
The
conference call replay will be available until midnight (Eastern Time) on
August 17, 2011. An archived audio webcast of the call also will be available
on HudBay's website.
HudBay Minerals Inc.
HudBay Minerals Inc. (TSX:HBM)(NYSE:HBM) is a Canadian integrated mining
company with assets in North, Central and South America principally focused
on the discovery, production and marketing of base and precious metals. The
company's objective is to maximize shareholder value through efficient
operations, organic growth and accretive acquisitions, while maintaining its
financial strength. A member of the S&P/TSX Composite Index and the S&P/TSX
Global Mining Index, HudBay is committed to high standards of corporate
governance and sustainability.
Qualified Person
The technical and scientific information in this news release has been
prepared by or under the supervision of Cashel Meagher, P.Geo. Mr. Meagher is
a "qualified person" for the purposes of National Instrument 43-101
Standards of Disclosure for Mineral Projects.
Forward-Looking Information
This news release contains "forward-looking information" within the
meaning of applicable Canadian and United States securities legislation.
Forward-looking information includes, but is not limited to, information with
respect to the Company's intentions respecting Norsemont and its Constancia
project, the Company's ability to develop its key projects, the ability of
management to execute on key strategic and operational objectives and meet
production forecasts, exploration expenditures and activities and the
possible success of such exploration activities, the timing and amount of
estimated future production, costs of production, capital expenditures, costs
and timing of the development of new deposits, mineral pricing, mine life
projections, and business and acquisition strategies. Often, but not always,
forward-looking information can be identified by the use of forward-looking
words like "plans", "expects", or "does not
expect", "is expected", "budget",
"scheduled", "estimates", "forecasts",
"intends", "understands", "anticipates", or
"does not anticipate", or "believes" or variations of
such words and phrases or statements that certain actions, events or results
"may", "could", "would", "might", or
"will be taken", "occur", or "be achieved".
Forward-looking information is based on the opinions and estimates of
management as of the date such information is provided and is subject to
known and unknown risks, uncertainties and other factors that may cause the
actual results, level of activity, performance or achievements of HudBay to
be materially different from those expressed or implied by such
forward-looking information, including the ability to develop and operate its
key projects on an economic basis and in accordance with applicable
timelines, geological and technical conditions, the ability to meet required
solvency tests to support a dividend payment, risks associated with the
mining industry such as economic factors (including future commodity prices,
currency fluctuations and energy prices), failure of plant, equipment,
processes and transportation services to operate as anticipated, dependence
on key personnel and employee relations, environmental risks, government
regulation, actual results of current exploration activities, possible
variations in ore grade or recovery rates, permitting timelines, capital
expenditures, reclamation activities, land titles, and social and political
developments and other risks of the mining industry as well as those risk
factors discussed or referred to in HudBay's Annual Information Form under
the heading "Risk Factors". Although HudBay has attempted to identify
important factors that could cause actual results to differ materially from
those contained in forward-looking information, there may be other factors
that cause results not to be as anticipated, estimated or intended. In
addition, certain forward-looking information in this MD&A relate to
prospective results of operations, financial position or cash flows based on
assumptions about future economic conditions or courses of action.
Such information is provided in attempt to assist the reader in identifying
trends and anticipated events that may affect HudBay's business, results of
operations and financial position and may not be appropriate for other
purposes. There can be no assurance that forward-looking information will
prove to be accurate, as actual results and future events could differ
materially from those anticipated in such information. Accordingly, readers
should not place undue reliance on forward-looking information. HudBay does
not undertake to update any forward-looking information, except as required
by applicable securities laws, or to comment on analyses, expectations or
statements made by third parties in respect of HudBay, its financial or
operating results or its securities.
Note to United States Investors
Information concerning our mineral properties has been prepared in accordance
with the requirements of Canadian securities laws, which differ in material
respects from the requirements of SEC Industry Guide 7. Under Securities and
Exchange Commission (the "SEC") Industry Guide 7, mineralization
may not be classified as a "reserve" unless the determination has
been made that the mineralization could be economically and legally produced
or extracted at the time of the reserve determination, and the SEC does not
recognize the reporting of mineral deposits which do not meet the United
States Industry Guide 7 definition of "Reserve".
In accordance with National Instrument 43-101 - Standards of Disclosure for
Mineral Projects ("NI 43-101") of the Canadian Securities
Administrators, the terms "mineral reserve", "proven mineral
reserve", "probable mineral reserve", "mineral
resource", "measured mineral resource", "indicated
mineral resource" and "inferred mineral resource" are defined
in the Canadian Institute of Mining, Metallurgy and Petroleum (the
"CIM") Definition Standards for Mineral Resources and Mineral
Reserves adopted by the CIM Council on December 11, 2005. While the terms
"mineral resource", "measured mineral resource",
"indicated mineral resource" and "inferred mineral resource"
are recognized and required by NI 43-101, the SEC does not recognize them.
You are cautioned that, except for that portion of mineral resources
classified as mineral reserves, mineral resources do not have demonstrated
economic value. Inferred mineral resources have a high degree of uncertainty
as to their existence and as to whether they can be economically or legally
mined.
Under Canadian securities laws, estimates of inferred mineral resources may
not form the basis of an economic analysis. It cannot be assumed that all or
any part of an inferred mineral resource will ever be upgraded to a higher
category. Therefore, you are cautioned not to assume that all or any part of
an inferred mineral resource exists, that it can be economically or legally
mined, or that it will ever be upgraded to a higher category. Likewise, you
are cautioned not to assume that all or any part of measured or indicated
mineral resources will ever be upgraded into mineral reserves. You are urged
to consider closely the disclosure on the technical terms in Schedule A
"Glossary of Mining Terms" of HudBay's annual information form for
the fiscal year ended December 31, 2010, available on SEDAR at www.sedar.com and
incorporated by reference as Exhibit 99.1 in HudBay's Form 40-F filed on
March 31, 2011 (File No. 001-34244).
(HBM-F)
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