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HudBay
Minerals Inc. (TSX:HBM)(NYSE:HBM) -
Highlights
-- Production of all key metals was higher in the first quarter of 2011 compared to the same period last year and remains on track to meet 2011 guidance, with copper production up 23% to 14,386 tonnes, zinc production up 27% to 19,205 tonnes and precious metals production up 31% to 30,006 gold-equivalent ounces(1) -- Acquisition of Norsemont and its 100% owned Constancia copper project completed in the first quarter of 2011; project optimization and initial stages of construction preparation commenced -- Significant construction activities continue at Lalor as project remains on budget and on schedule for first production in the second quarter of 2012; optimized feasibility study due in the third quarter of 2011 -- Additional copper-gold mineralization intersected in three separate horizons in copper-gold zone at Lalor -- Drill intersections in Pampacancha deposit, three kilometers southeast of Constancia, confirm continuity of mineralization, with localized high grade intervals -- New high-grade copper mineralized zone discovered in exploration drilling at option property 1.8 kilometers from the Reed copper project
HudBay
Minerals Inc. ("HudBay", the
"company") today released its first quarter 2011 financial
results. Net profit attributable to shareholders increased to $16.8
million or $0.11 per share in the first quarter of 2011, compared to
$10.6 million, or $0.07 per share, during the first quarter of 2010.
Earnings in the first quarter of 2011 included a charge of $5.8
million, or $0.04 per share, for transaction costs associated with the
successful acquisition of Norsemont Mining
Inc. ("Norsemont") in March 2011.
Earnings grew during the quarter mainly due to higher metal prices and
reduced exploration expense, partly offset by lower sales volumes, a
stronger Canadian dollar and Norsemont
transaction costs.
"Our operating mines delivered very strong performance during the
first quarter of 2011 and we remain confident in our ability to meet
our production guidance for the remainder of the year," said David
Garofalo, HudBay's
president and chief executive officer. "After outlining our growth
strategy in 2010, which entailed acquiring development stage assets
with exploration upside, our current focus is to execute against that
strategy. We continued to make significant progress at Lalor and our production timelines for the project
remain on track. We have also commenced pre-construction and
feasibility study optimization activities at Constancia
and expect to make a formal construction decision in early 2012."
Solid Earnings Growth Due to Strong Metals Prices
During the first quarter of 2011, the company generated net profit
attributable to shareholders of $16.8 million or $0.11 per share, which
compared to $10.6 million, or $0.07 per share, during the first quarter
of 2010. Profit for the first quarters of 2011 and 2010 has been
presented in accordance with International Financial Reporting
Standards ("IFRS"). Compared to results for the first quarter
of 2010 previously reported under Canadian generally accepted
accounting standards ("CGAAP"), IFRS earnings for the first
quarter of 2010 include additional exploration expenses of $9.2 million
related to the Lalor project, in addition to
other differences between CGAAP and IFRS described in HudBay's interim financial statements for the first
quarter of 2011.
Co-product costs per unit sold in the first quarter of 2011 were $0.82
per pound copper, $241 per ounce gold and $1.00 per pound zinc.(2)
Co-product costs of copper and gold were reduced as a result of
byproduct credits from the sale of copper bearing material and recovery
of additional gold and silver arising from the closure of the copper
smelter and refinery.
As previously disclosed, shipments of copper concentrate continued to
be affected in the first quarter of 2011 by an insufficient supply of
railcars to HudBay's Manitoba operations and
copper concentrate inventory continued to grow during the quarter. Had
the approximately 24,000 dry metric tonne
("dmt") increase in copper concentrate
inventory been sold in the first quarter at a copper price of US$4.26
per pound, a gold price of US$ 1,392 per ounce and a silver price of
$36.38 per ounce (being the average realized prices for copper and
precious metals during the first quarter of 2011), the impact on
revenues, earnings before tax and net earnings per share from such a
sale is estimated to be an additional $65 million, $37 million and
$0.14 per share, respectively.
Railcar availability has improved significantly since the end of the
first quarter, and copper concentrate inventories at Flin Flon have been
steadily drawn down from a peak level of over 66,000 dmt at March 31, 2011. HudBay
expects copper concentrate sales to exceed production in each of the
ensuing three quarters of 2011, resulting in the sale of most of the
excess inventory by the end of 2011.
Operating Cash Flow Remained Strong
Operating cash flow before changes in non-cash working capital(2)
decreased to $45.1 million, or $0.29 per share, in 2011 from $49.5 million
or $0.32 per share in 2010 mainly as a result of lower sales volumes,
offset in part by higher prices received for copper and gold.
Cash, cash equivalents and short term investments decreased from $901.7
million at the end of 2010 to $721.4 million at March 31, 2011.
This was due mainly to the cash component of the Norsemont
acquisition, combined with capital expenditures, strategic investments,
increases in inventory and other changes in working capital. Together
with our unused credit lines, HudBay has
available liquidity of $1.0 billion and no debt. While the company
believes that the Lalor and Constancia projects can be fully 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 first
quarter 2011 financial results, please refer to the First Quarter 2011
Supplemental Disclosure document at http://investor.shareholder.com/hbm/reports.cfm.
Lalor Development Proceeds on Schedule;
Feasibility Optimization Expected to be Released in Early Q3 2011
The Lalor project's development and site
construction are proceeding on schedule. As at April 26, 2011, the Lalor project has gone 505 days without a lost time
accident and all safety and environmental systems are in place and
working well.
The company continues to make significant progress on the planned 3,200
meter access ramp at the Lalor project,
having advanced over 2,100 meters from the Chisel North mine as at May
16, 2011. The ramp is intended to extend to the base of the ventilation
shaft that is currently under construction by the first quarter of
2012.
During the quarter, HudBay completed the
ventilation shaft presink to the 30 meter
level and construction is well underway on the headframe
and hoist arrangement to support the sinking. The ventilation shaft is
scheduled to be completed in the second quarter of 2012. The
ventilation shaft will provide increased ventilation flows for further
underground development of Lalor, enable more
development crews working on the project, provide temporary hoisting of
ore and waste until the main production shaft is completed in 2014 and
provide a second egress from the underground workings.
Surface site construction has proceeded on several fronts. The access
road to the site is complete. All power poles for the site have been
installed and full power to the construction site is now available. The
temporary substation became operational at the end of February. Water
lines for process water and discharge water are being placed and civil
work on the pump stations is well underway.
On the main site, construction is proceeding with the completion of the
polishing pond (settling pond), and water treatment plant.
Temporary construction trailers have been installed. The ventilation
plenum and main shaft collar have been excavated as well as the
production hoist foundations. Framing and concrete pours for the hoist
foundations are ongoing.
Procurement and tendering is ongoing on the long lead items. The main
production hoist and man hoist have been ordered with the man hoist is
expected to be delivered in the second quarter of 2011, for
installation in the third quarter of 2011. A memorandum of
understanding with Dumas Contracting Ltd. has been signed for the
production shaft construction contract. With this contract secured,
over 55% of the $560 million planned construction commitment at Lalor has been fixed and no material cost
escalation has been realized to date.
HudBay is continuing with the metallurgical
testing of the Lalor ores, focusing on gold
optimization.
This includes variable testing on the primary grind, with and without a
regrind circuit, as well as optimization of the reagent used and
projected consumption.
Tradeoff studies undertaken by the company indicate that the Lalor orebody is likely
sufficient to support the construction of a new concentrator. HudBay is continuing to evaluate options for the
capacity and flowsheet of a new concentrator,
and expects to be in a position to make a decision on whether to
proceed with a new concentrator early in the third quarter of 2011.
The construction of a new concentrator is expected to result in an
increase in the company's overall capital expenditure investment in Lalor compared to refurbishing the existing Snow
Lake concentrator. It is also expected to lead to higher daily
production levels along with other benefits, which include reduced
operating costs, higher gold recoveries in the plant and further
production rate scalability.
Hole DUB274W02 Intersects Three Different Horizons at the Lalor Copper-Gold Zone
Exploration is continuing in the Snow Lake Region in and around the Lalor deposit. Hole DUB274W02 intersected the
following mineralization:
-- 1291.00 to 1297.42 meters (6.42 meters) at 2.63% Cu and 3.33 g/t Au -- 1328.34 to 1328.89 meters (0.55 meters) at 4.60 %Cu and 6.22 g/t Au -- 1536.14 to 1537.73 meters (1.59 meters) at 4.55% Cu and 3.74 g/t Au
These intersections at
different horizons of the copper-gold zone suggest a change in the
distribution of mineralization. Drilling continues on the copper-gold
zone with hole DUB274W03 completed and assays pending. Drill hole
DUB280 is in progress. Both holes are intended to define the nature of
the lower portion of the zone and are shown on a schematic available at
http://www.hudbayminerals.com/ourBusiness/exploration.php.
Along with the drill testing the down-plunge portion of the copper-gold
zone, a second drill is conducting a program of periphery drilling
around the Lalor deposit and is testing
geophysical and geological targets. Results are pending for four
recently completed periphery holes, DUB276 to DUB279, and hole DUB281
is underway.
A third drill rig has been testing a target located approximately two
kilometers southeast of the Lalor deposit and
1.3 kilometers northwest of the currently active Chisel North mine.
Four holes were drilled in the area between 2003 and 2007, each of
which intersected scattered copper mineralization hosted in an altered
volcanic unit.
Recently completed hole CH1101 intersected 6.40 meters grading 4.80%
Cu, 0.18% Zn and 0.92 g/t Au at a depth of 736.00 to 742.40 meters.
Wedge hole CH1101W01 intersected scattered copper values at approximately
the same depth. The drill was removed from the area because pending
spring conditions would have blocked access to the drill. Additional
drilling is planned during 2011 to further test this area of
mineralization. A fourth drill is cementing drill holes in preparation
for mine development.
For additional detail on Lalor, refer to HudBay's NI 43-101 technical report entitled
"Technical Report Lalor Deposit, Snow
Lake, Manitoba Canada", dated October 8, 2009, available at www.sedar.com.
Technical Review of Constancia Feasibility
Study Optimization is Ongoing;
Construction Decision Expected in Early 2012
On March 31, 2011, HudBay announced a 2011
pre-construction program for the Constancia
project with a total investment of US$116 million. The program
contemplates early equipment procurement for long lead items, a
resource model update, metallurgy review and pit optimization study,
geotechnical and condemnation drilling and a US$9 million exploration program.
HudBay is currently conducting a technical
review of the feasibility study optimization ("FSO")
completed by Norsemont in February 2011, in
conjunction with a number of initiatives from both 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.
Exploration Drilling Begins at Constancia;
Pampacancha Zone Proving to be Continuous
with Localized High Grade Intervals
One drill rig has begun the condemnation drilling program, in
preparation for detailed engineering of the Constancia
project. A second drill rig will be mobilized from Pampacancha
and will be added to the condemnation program in mid-May 2011. By the
end of May 2011, four drill rigs will be on site to facilitate the
collection of geotechnical data.
Exploration was conducted with two drill rigs through the first quarter
of 2011. Pampacancha will continue being
evaluated with three drill rigs that will be on site once regulatory
authorization is granted, which is expected in May 2011. The focus is
the Pampacancha skarn
prospect.
"The Pampacancha zone is proving to be
continuous with localized high grade intervals of copper-gold skarns," said Cashel
Meagher, Vice President, Exploration. "We expect that Pampacancha will become an important mine
optimization option for high-grade feed early in the Constancia mine life."
A plan map showing the location of the recent results can be viewed at http://www.hudbayminerals.com/ourBusiness/exploration.php. Of
particular note are:
-- Hole PO-11-049 which intersected 36.10 meters (from 122 to 158.10 meters) of 1.03% Cu and 0.49 g/t Au, including 21.15 meters (from 128.05 to 149.20 meters) of 1.68% Cu and 0.80 g/t Au. This hole indicates that the skarn mineralization system remains open to the west and northwest. It is located in what is known as Sector Three, located 427 meters North West of discovery hole PR-08-008. -- Hole PO-11-058, located 40 meters west of hole PR-08-008, intercepted 30.25 meters (from 165 to 195.25 meters) averaging 1.03% Cu, 565 ppm Mo, and 0.42 g/t Au (1.72% Cu-Eq), including 21.20 meters (from 174.05 to 195.25 meters) of 1.41% Cu, 791 ppm Mo and 0.58 g/t Au (2.37% Cu-Eq). Additionally, a 0.80 meter, high-grade Au structure (from 53.60 to 54.40m) returned 33.67 g/t Au. -- Hole PO-11-064, located 137 meters southwest of hole PR-08-008 intercepted 38.95 meters (from 129.05 to 168 meters) of 1.09% Cu and 0.61 g/t Au (1.64% Cu-Eq), including 32.10 meters (from 129.90 to 162 meters) of 1.29% Cu and 0.70 g/t Au (1.93% Cu-Eq). Additionally, a 0.50 meter structure (from 220.50 to 221.00 meters) returned 12.82 g/t Au.
Holes PO-11-064 and Hole
PO-11058 suggest that the mineralized horizon remains open to the West.
Other results that confirm the continuity of the Pampacancha
skarn mineralization include:
-- PO-10-043: 30.95 meters of 1.17% Cu, 11.6 g/t Ag and 0.41 g/t Au -- PO-11-054: 45.00 meters of 0.58% Cu, 3.3 g/t Ag and 0.25 g/t Au -- PO-11-057: 63.50 meters of 0.62% Cu, 3.8 g/t Ag and 0.31 g/t Au -- PO-11-051: 61.70 meters of 0.57% Cu, 4.0 g/t Ag and 0.25 g/t Au -- PO-11-055: 1.85 meters of 0.20% Cu, 15.1 g/t Ag and 12.81 g/t Au -- PO-11-059: 66.80 meters of 0.80% Cu, 19.32 g/t Ag and 0.22 g/t Au
Compilation and
interpretation of recent results is ongoing. For the remainder of 2011,
HudBay's exploration plans will be as
follows:
-- The mobilization of surface geophysics crews to the Pampacancha and Chilloroya prospects by the end of May 2011 to target further potential mineralization -- Increased drilling at Pampacancha once exploration permits are approved -- Surface recognition and preliminary evaluation of the precious-metal potential of the volcanic area located at the eastern sector of the Constancia mining holdings. The surface work started on April and is currently underway.
For additional detail on Pampacancha and the Constancia
project generally, refer to Norsemont's NI
43-101 technical report entitled "Norsemont
Mining Constancia Project Technical Report 21
February 2011", available under Norsemont's
profile at www.sedar.com.
Reed Copper Project
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 feasibility study and the technical activities required for
permitting, including metallurgical and geotechnical testing and mine
design, are underway with the expectation of a construction decision by
year-end.
Two surface drill rigs are currently operating near the Reed project.
These drills are testing geophysical targets on properties optioned
from VMS to HudBay. A recent hole, RLE004,
intersected two short sections of copper mineralization hosted in both
basalt and rhyolite volcanic units and
associated with a VTEM conductivity and magnetic anomaly. A down-hole
EM survey conducted on hole RLE004 indicated two zones of stronger
conductivity away from the hole. Hole RLE006 tested these anomalies and
intersected the following zones of mineralization:
-- 7.18 meters (133.89 to 141.07 meters) of 7.44% Cu, 0.23% Zn, 0.48 g/t Au and 7.57 g/t Ag -- 44.49 meters (214.00 to 258.49 meters) intersected of 0.79% Cu, 0.39% Zn, 0.16 g/t Au and 1.58 g/t Ag
Holes RLE004 and RLE006 are
located approximately 1.8 kilometers northeast of the Reed project and
represent a separate mineralized zone. One drill will continue to test
this new zone once helicopter support is established. The second drill
will continue to test other targets on the option properties.
Exploration Drilling Continues to Follow-up on Deep Zone Extensions at
Back Forty
Exploration with joint venture partner Aquila Resources Inc.
("Aquila") at the Back Forty project in the Upper Peninsula
of northern Michigan is ongoing with three drill rigs in operation.
One drill rig continues to follow-up on the deep drilling results
reported by Aquila in holes LK-479 and LK-484. The second drill rig is
targeting an extension of the deep zone immediately beneath the known
deposit.
The third drill rig is currently drilling geotechnical holes. Permits
are anticipated by the end of May to enable testing of EM anomalies
within a kilometer east of the known deposit.
Preparation for the permit application and economic assessment are
ongoing. Current engineering efforts are focusing on the optimal size
and scope of the project and guidance will be given before year end. HudBay is targeting to complete a feasibility study
and submit a permit application by the second quarter of 2012.
Key Financial Results
---------------------------------------------------------------------------- Three Months Ended March 31 ---------------------------- ($000s except per share amounts) 2011 2010 ---------------------------------------------------------------------------- Revenue 177,345 241,306 ---------------------------------------------------------------------------- Profit before tax 33,590 34,989 ---------------------------------------------------------------------------- Profit attributable to owners of the Company 16,797 10,583 ---------------------------------------------------------------------------- Operating cash flow(1), (2) 45,106 49,485 ---------------------------------------------------------------------------- Basic and diluted EPS(3) $ 0.11 $ 0.07 ---------------------------------------------------------------------------- Operating cash flow per share(1), (2) $ 0.29 $ 0.32 ---------------------------------------------------------------------------- Cash and cash equivalents and short term investments 721,406 901,693 ---------------------------------------------------------------------------- Total assets 2,524,551 2,092,060 ---------------------------------------------------------------------------- (1) Operating cash flow and operating cash flow per share are considered non-IFRS measures. See the reconciliation of these measures to IFRS at the end of this news release. (2) Before changes in non-cash working capital. (3) Earnings per share.
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 and
co-product cash costs per unit sold 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 year ended March 31, 2011 and March 31,
2010.
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.
---------------------------------------------------------------------------- ($000s except as noted) Three Months Ended March 31 ------------------------------- 2011 2010 ---------------------------------------------------------------------------- Cash (used in) generated by operating activities, per financial statements (7,343) 64,370 Adjustments: Changes in taxes receivable 12,581 (10,797) Changes in tax payable, excluding effect of OCI items 29,030 (4,859) Changes in non-cash working capital 10,838 799 ---------------------------------------------------------------------------- Operating cash flow before changes in non- cash working capital 45,106 49,513 ---------------------------------------------------------------------------- Weighted average shares outstanding 156,008,830 153,650,452 ---------------------------------------------------------------------------- Operating cash flow per share $ 0.29 $ 0.32 ----------------------------------------------------------------------------
Cash cost per pound of zinc
sold
HudBay's cash cost per pound of zinc sold for
our HBM&S operations, net of by-product credits, for the first
quarter of 2011 was negative US$0.41 per pound compared to negative
US$0.34 per pound in 2010, as calculated in the following table.
---------------------------------------------------------------------------- ($000s except as noted) Three Months Ended March 31 2011 2010 ---------------------------------------------------------------------------- Other cost of sales 94,871 142,633 Selling and other operating expense 1,811 686 ---------------------------------------------------------------------------- 96,682 143,319 Less by-product credits(1) (118,626) (166,486) ---------------------------------------------------------------------------- Cash cost net of by-products (21,944) (23,167) Exchange rate (US $1 to C$)(2) 0.986 1.041 ---------------------------------------------------------------------------- Cash cost net of by-products US (22,256) US (22,255) Zinc sales (000's lbs.) 54,847 65,623 ---------------------------------------------------------------------------- Cash cost per pound of zinc sold, net of by- product credits in US $/lb. US (0.41) US (0.34) ---------------------------------------------------------------------------- (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
Commencing in the third quarter of 2010, we introduced co-product cash
costs as a new non-IFRS measure. We believe that these costs serve as
meaningful indicators for investors to evaluate our operations.
Costs for the first 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 shut down 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 our Trout Lake and 777 mines are allocated proportionately based on
the value of the contained metals at prevailing metals prices.
Operating overhead expenses and general and administrative expenses (in
both cases, excluding costs not related to our 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, we also add to these
costs third party treatment and refining costs, which are deducted from
revenue in our financial statements.
Zinc oxide production is treated 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, silver production is
treated as a by-product of gold production.
Other miscellaneous revenues are allocated among zinc, copper and gold
in the same manner as general and administrative costs.
While the impact of fluctuating metals prices is expected 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 March 31, 2011
---------------------------------------------------------------------------- ($000s except as noted) Copper Zinc Gold Total ---------------------------------------------------------------------------- Other cost of sales 24,839 63,819 6,213 94,871 Treatment and refining costs(1) 4,369 - 1,053 5,422 ---------------------------------------- 29,208 63,819 7,266 Zinc oxide and by-product revenues (13,872) (8,886) (4,141) --------------------------------- Co-product costs 15,336 54,933 3,125 Sales volume(2) 18,600 54,846 12,951 --------------------------------- Co-product cash costs per unit(3) sold $ 0.82 $ 1.00 $ 241 ---------------------------------------------------------------------------- (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. (3) Copper and zinc costs are per pound and the gold cost is per troy oz.
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 March 31,
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/MDAQ111.pdf
Financial Statements:
http://media3.marketwire.com/docs/FSQ111.pdf
First Quarter 2011 Supplemental Disclosure
http://media3.marketwire.com/docs/SUPPQ11.pdf
Conference Call and Webcast
Date: Tuesday, May 17, 2011 Time: 10 a.m. ET Webcast: www.hudbayminerals.com Dial in: 416-644-3415 or 877-974-0446 Replay: 416-640-1917 or 877-289-8525 Replay Passcode: 4435076#
The conference call replay
will be available until midnight (Eastern Time) on May 24, 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.
(1) Silver production converted to gold equivalent at the average gold and silver realized sales prices during each respective quarter. (2) Co-product cash costs and operating cash flow (before changes in non- cash working capital) and are considered non-IFRS measures. See the reconciliation of these measures to IFRS at the end of this release.
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 the Lalor, Constancia and Fenix 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).
(F)
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