TORONTO, ONTARIO--(Marketwire - April 2, 2012) -

Highlights¹

• Increases in Hudbay's copper equivalent proven and probable reserves, measured and indicated resources and inferred resources over the past year, of 5%, 31% and 9%, respectively
  
  
• Initial mineral resource estimate at Pampacancha includes 51.2 million tonnes of measured and indicated mineral resources with a copper equivalent grade of 0.74%, which Hudbay plans to incorporate into the Constancia project mine plan²
  
  
• Capital cost estimate of US$1.5 billion to construct the proposed Constancia mine, with contemplated scope changes including a 15% increase in production capacity to 28.2 million tonnes of ore per year, compared to Norsemont Mining Inc.'s Feasibility Study Optimization
  
  
• Hudbay's Board of Directors approves an additional US$34 million to continue already well advanced engineering and procurement activities and to commence site preparation at Constancia; a formal project recommendation is expected in mid-2012
  
  
• Hudbay management to conduct conference call on April 2, 2012 at 11 a.m. ET.
  
  

HudBay Minerals Inc. ("Hudbay" or the "company") (News - Market indicators)(NYSE:HBM) today announced an increase to its copper equivalent proven and probable mineral reserves for the second consecutive year. Copper equivalent proven and probable mineral reserves increased by 5% to 3.2 million tonnes, including 3.5 million ounces of precious metal equivalent proven and probable reserves, which increased by 18% from 2011. In addition, Hudbay has nearly 1 million tonnes of measured and indicated copper equivalent resources and 1.7 million tonnes of inferred copper equivalent resources, including 1.6 million ounces of precious metal equivalent measured and indicated resources and 2.6 million ounces of precious metal equivalent inferred resources.

Exploration success accounted for approximately 90% of the increase in copper equivalent reserves and resources and 75% of the increase in precious metals equivalent reserves and resources, with the balance due to revised commodity price and exchange rate assumptions.

On a per share basis³, Hudbay's copper equivalent proven and probable reserves grew to 41.3 pounds per share compared to 39.2 pounds per share in 2011. Copper equivalent measured and indicated resources grew to 11.9 pounds per share compared to 9.1 pounds per share in 2011 and copper equivalent inferred resources grew to 21.6 pounds per share compared to 19.8 pounds per share in 2011.

"The continued growth in our metal reserves and resources per share demonstrates our success in providing our shareholders increasing leverage to commodity prices," said David Garofalo, president and CEO. "We added more reserves and resources at Lalor and the initial resource at the higher grade Pampacancha deposit speaks to the value we have added to the Constancia project since we acquired it only one year ago."

Initial Resource Announced at Higher Grade Pampacancha Satellite Deposit

Hudbay today announced an initial resource at its higher grade Pampacancha satellite deposit, which is 2.5 kilometres from the proposed Constancia open pit. The resource includes 51.2 million tonnes of measured and indicated mineral resources with a copper equivalent grade of 0.74%.

The mineral resource includes the drill results announced March 7, 2012, which expanded the Pampacancha deposit to the north and west.

"The mineral resource at Pampacancha is expected to improve the economics of the Constancia project by adding higher grade mineralization into the mine plan early in the mine life," said Mr. Garofalo. "In addition, our exploration team is continuing to follow-up on the recent drill success at the deposit, which demonstrated significantly higher grades than other previously released intersections."

A 30,000 metre drill program in 2012 at Constancia will focus on expanding the resource and exploration. Hudbay believes that, while the low grade hypogene ore within the Constancia deposit is well defined, there is the potential to yield additional higher grade mineralization in satellite deposits.

Exploration drilling is scheduled to resume early in the second quarter of 2012 at the Pampacancha deposit, which remains open in all directions. Two drills will initially focus on the north and west extensions, as these zones have been yielding higher grade intersections.

Drilling at the Chilloroya South prospect area is scheduled to commence in May 2012 with two drills. This area contained interesting intersections from Norsemont's previous exploration program, which concentrated on porphyry copper targets, skarn targets and tourmaline breccia targets.

Hudbay is currently working on a new resource estimate that will be completed once estimated capital costs are confirmed and other project economics are determined.

Constancia Project Decision Expected by Mid 2012; Larger Reserve and Increased Production Rate Expected

Front-end engineering and design work at the 100% owned Constancia project in Peru is nearing completion. Significant changes to the previous project design include:

• Value engineering and comminution optimization, which has yielded an annual ore production capacity increase from 24.5 million tonnes per year in Norsemont's Feasibility Study Optimization to 28.2 million tonnes per year, which represents a 15% increase in throughput
  
  
• An expected increase in the in-pit reserve to incorporate additional economic mineralization. This will require an increase in the project's tailings dam capacity. The increase in reserve along with plans to incorporate the higher grade Pampacancha resource early into the mine plan are expected to be incorporated into a new mine plan by mid-2012
  
  
• Value engineering efforts are underway with optimization efforts focused on areas such as camp accommodations, water management and tailings impoundment
  
  

Project procurement is proceeding well. Fixed price orders have been placed for over US$200 million in project expenditures, including grinding mills and mobile equipment. Permit applications are on track and the principal beneficiation concession permit is expected in late April. Hudbay has negotiated principal commercial terms with regards to an EPCM contract with Ausenco and an agreement with Stracon GyM governing major earth works during the construction period and transition to mining. Formal agreements are expected upon project approval by Hudbay's Board of Directors.

Significant progress has also been made in relations with the two local communities adjacent to the Constancia project. Life of mine agreements have been entered into with both communities, which secure land required for project construction and operations and specify Hudbay's commitments to the communities over the course of mine construction and operations.

As a result of general cost escalation, the scope enhancements described above, local currency appreciation and other factors, Hudbay's capital cost estimate for Constancia is estimated to be US$1.5 billion. This amount represents gross capital costs, with no credits for revenue from production prior to achieving commercial production and includes sunk costs incurred during 2012. Capitalized costs expected to be incurred prior to a formal project decision total US$141 million. To support the continuing pre-construction development of Constancia during the second quarter of 2012, Hudbay's Board of Directors has approved an incremental US$34 million in capitalized spending on Constancia, over and above the US$107 million approved for the first quarter of 2012. These expenditures will support ongoing engineering and procurement activity, hydrogeological drilling and camp construction among other activities.

The anticipated project schedule currently remains unchanged, with first production expected in 2015 and full production in 2016. By mid-2012, Hudbay expects to present its Board of Directors with a formal project recommendation, including a financing plan expected to involve project financing for Constancia.

Detailed Mineral Reserve and Resource Disclosure

The mineral reserves at Lalor are estimated from the indicated zinc-rich and gold zone mineral resources and are exclusive of the mineral resources stated below to produce the mineral reserves shown above. Mineral reserves are based on an updated mineral resource and prefeasibility study completed by Hudbay in March 2012. The updated prefeasibility study includes: re-calculated mineral resource model incorporating the diamond drilling to September 30, 2011, detailed calculation of dilutions and recoveries per mining area, mine ore haulage and milling options, paste backfill requirement, detailed capital and operating cost estimates for a new concentrator located at the Lalor site. The mineral reserve also accounts for relevant economic, marketing, legal, environment and socio-economic factors.

Conference Call and Webcast

The conference call replay will be available until midnight (Eastern Time) on April 13, 2012. An archived audio webcast of the call also will be available on Hudbay's website.

Additional Information Concerning Mineral Reserve and Resource Estimates

The reserve and resource estimates included in this news release were prepared in accordance with NI 43-101 and the Canadian Institute on Mining, Metallurgy and Petroleum Standards on Mineral Resources and Reserves: Definitions and Guidelines. Mineral resources are not mineral reserves and do not have demonstrated economic viability.

Dates used for the comparison of Hudbay's reserves and resources in 2011 and 2012 are as at March 31, 2011 and March 30, 2012, respectively.

In-Mine Mineral Reserves and Resources

• To estimate mineral reserves, measured and indicated mineral resources were first estimated in a 12-step process, which includes determination of the integrity and validation of the data collected, including confirmation of specific gravity, assay results and methods of data recording. The process also includes determining the appropriate geological model, selection of data and the application of statistical models including probability plots and restrictive kriging to establish continuity and model validation. The resultant estimates of measured and indicated mineral resources are then converted to proven and probable mineral reserves by the application of mining dilution and recovery, as well as the determination of economic viability using full cost analysis. Other factors such as depletion from production are applied as appropriate.
  
  
• Estimated inferred mineral resources within our mines were estimated by a similar 12-step process, used to estimate measured and indicated resources.
  
  
• The zinc price used for mineral reserve and resource estimations for the Manitoba mines was US$1.00 per pound (includes premium), the copper price was US$2.75 per pound, the gold price was US$1,100 per ounce and the silver price was US$22 per ounce using an exchange of 1.05 C$/US$.
  
  

Lalor

• The mineral resource estimates are effective as of a September 30, 2011 cut-off date for diamond drilling, which includes a total of 121 parent and 101 wedge offsets drilled from surface on the Lalor property. The zinc rich base metal estimate was completed using MineSight 6.5 block modeling software in UTM NAD83 coordinates (MineSight). The block model was constrained by interpreted 3D wireframes of the zinc rich base metal mineralized zones. Gold, silver, copper, zinc, lead, and iron grades and specific gravity were estimated into blocks using Ordinary Kriging (OK) interpolation. Zone intersections were selected based on a minimum 4% Zinc Equivalency formula (ZNEQ) over a two metre core length. The ZNEQ was calculated from metal price and metal recovery assumptions, with economic contributions from gold, silver, copper and zinc. Each block was assigned a ZNEQ.
  
  
• The gold and copper-gold estimate was completed using MineSight in UTM NAD83 coordinates. The block model was constrained by interpreted 3D wireframes of the gold mineralized zones. A 1.0 g/t gold cut-off over a two metre core length was used to determine the zone outlines for continuity purposes to build the 3D wireframes. Gold, silver, copper, zinc, lead, and iron grades and specific gravity were estimated into blocks using OK interpolation.
  
  

Constancia

• For additional details relating to the estimates of mineral reserves and resources at the Constancia project, including data verification and quality assurance/quality control processes refer to the "Constancia Project Technical Report" as filed on SEDAR by Norsemont Mining Inc. on February 21, 2011.

 Pampacancha

• Copper Equivalent % is calculated for the in situ value of contained metals using the following $US metal price assumptions, Cu=2.75/lb Mo=13/lb, Ag=22/oz and Au=1100/oz.

• Measured and indicated mineral resources were estimated in house. The process includes determination of the integrity and validation of the data collected, including confirmation of specific gravity, assay results and methods of data recording. The process also includes determining the appropriate geological model, selection of data and the application of statistical models including probability plots to establish continuity and model validation.

• The estimate as at March 30, 2012 was prepared in accordance with NI 43-101 and the CIM Standards on Mineral Resources and Reserves: Definitions and Guidelines.

Reed

• The weighted average (based on planned production tonnage) used in the Reed pre-feasibility study for mineral reserve estimation for copper was US$2.95 per pound, the gold price was US$1269.09 per ounce and the silver price was US$24.78 per ounce using an exchange rate of 1.034 C$/US$.

Back Forty

• The cut-off grades are based on metal price assumptions of US$0.95 per pound zinc, US$2.50 per pound copper, US$0.59 per pound lead, US$900 per troy ounce gold and US$15.00 per troy ounce silver. Metallurgical recoveries were determined and used for each of the metallurgical domains determined for the deposit. For additional detail relating to the Back Forty mineral resource estimate see "Technical Report, Back Forty Deposit, Menominee County, Michigan" as filed on SEDAR by Aquila Resources Inc. on November 29, 2010.

Tom and Jason

• Metal prices used (US$0.57/lb Zn, US$0.35/lb Pb and US$7.00/oz Ag) and a gross dollar value cut-off of US$50/tonne. Ag values were capped at 550 g/t. For additional detail relating to the Tom/Jason mineral resource estimates see "Technical Report on the Tom and Jason Deposits, Yukon territory, Canada" dated May 24, 2007, available at www.sedar.com.

Qualified Person

The technical and scientific information in this news release related to the Constancia project has been approved by Cashel Meagher, P. Geo, Hudbay's Vice-President, South America. The technical and scientific information related to all other sites and projects contained in this news release has been approved by Robert Carter, P. Eng, Hudbay's Manager, Project Evaluation. Mr. Meagher and Mr. Carter are qualified persons pursuant to NI 43-101.

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 changes to the scope of our Constancia project, project development plan, and the anticipated timing of a project decision by the company's Board of Directors, 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 estimation of mineral reserves and resources, the realization of mineral estimates, the timing and amount of estimated future production, costs of production, capital expenditures, costs and timing of the development of new deposits, mineral pricing. 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 our actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information, including the ability to develop and operate our Lalor, Constancia and Reed projects on an economic basis and in accordance with applicable timelines, the ability to receive permits required to achieve production at Lalor, Constancia and Reed, geological and technical conditions at our key projects being adequate to permit development, 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 (including anti-bribery legislation), aboriginal rights and title, 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 our AIF under the heading "Risk Factors".

Although we have 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 news release relate to prospective results of operations, financial positions or cash flows based on assumptions about future economic conditions or courses of action. Such information is provided in an attempt to assist the reader in identifying trends and anticipated events that may affect our 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. Specific reference is made to our most recent Form 40-F on file with the United States Securities and Exchange Commission (the "SEC") and our most recent AIF on file with Canadian provincial securities regulatory authorities for a discussion of some of the factors underlying forward looking statements. We do not undertake to update or revise any forward-looking information whether as a result of new information, future events or otherwise, except as required by applicable securities laws, or to comment on analyses, expectations or statements made by third parties in respect of our financial or operating results or our securities.

Note to United States Investors

Information concerning Hudbay's 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.

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).

About Hudbay

Hudbay (News - Market indicators)(NYSE:HBM) is a Canadian integrated mining company with assets in North and South America principally focused on the discovery, production and marketing of base and precious metals. Hudbay'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. Further information about Hudbay can be found on www.hudbayminerals.com.

¹ Mineral resources are exclusive of and additional to stated mineral reserves. Overall copper equivalent reserves and resources and precious metal equivalent reserves and resources are in-situ contained metal based on estimated reserves and resources at Constancia, 777, Lalor, Reed, Chisel North, Trout Lake, Back Forty, Tom and Jason and Lost property. Copper equivalent metal for 2012 calculated using a copper price of US$2.75 per pound, zinc price of US$0.95 per pound, gold price of US$1,100 per ounce, silver price of US$22.00 per ounce, lead price of US$0.85 per pound and molybdenum price of US$13.00 per pound. Copper equivalent metal for 2011 was calculated using a copper price of US$2.50 per pound, zinc price of US$0.95 per pound, gold price of US$900 per ounce, silver price of US$15.00 per ounce, lead price of US$0.70 per pound and molybdenum price of US$12.00 per pound. For 2012, precious metal equivalent reserves and resources include gold and silver only, expressed in ounces of gold, including silver converted to gold at a ratio of 50:1. For 2011, precious metal equivalent reserves and resources include gold and silver only, expressed in ounces of gold, including silver converted to gold at ratio of 60:1.

² Mineral resources that are not mineral reserves do not have demonstrated economic viability.

³ Per share metrics for 2011 are based on 149.4M common shares outstanding as at Dec. 31, 2010 plus 23.4M shares issued to complete the acquisition of Norsemont Mining Inc. Per share metrics for 2012 are based on 171.94 M common shares outstanding as at Dec. 31, 2011.