51
HBM Bank of America / Merrill Lynch – 17 th Annual Canada Mining Conference September 8 – 9, 2011
HBM
Bank of America / Merrill Lynch – 17th Annual Canada Mining Conference September 8 – 9, 2011
Forward Looking Information
This presentation contains "forward-looking information" within the meaning of applicable securities laws. Forward-looking information includes but is not limited to information concerning the company’s ability to develop its key development projects, including the Lalor, Constancia and Fenix projects and the 777 North expansion, the ability to maintain a regular dividend on its common shares, the ability of management to execute on key strategic and operational objectives, the ability to meet production forecasts, the potential impact of changing economic conditions on HudBay’s financial results and the company’s strategies and future prospects. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects", or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", “understands” or "does not anticipate", or "believes" or variations of such words and phrases or statements that certain actions, events or results “will”, "may", "could", "would", "might", or "will be taken", "occur", or "be achieved". Forward-looking information is based on the views, opinions, intentions and estimates of management at the date the information is made, and is based on a number of assumptions and subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated or projected in the forward-looking information (including the actions of other parties who have agreed to do certain things and the approval of certain regulatory bodies).Many of these assumptions are based on factors and events that are not within the control of HudBay and there is no assurance they will prove to be correct. Factors that could cause actual results or events to vary materially from results or events anticipated by such forward-looking information include the ability to develop and operate its key projects on an economic basis and in accordance with anticipated 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 costs of construction materials, future commodity prices, currency fluctuations and energy prices), failure of plant, equipment, processes and transportation services to operate as anticipated, including new and upgraded facilities at Lalor, dependence on key personnel, employee relations and availability of equipment and skilled personnel, environmental risks, government regulation, actual results of current exploration activities, possible variations in ore grade, dilution 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 in the company’s Annual Information Form dated March 31, 2010, which risks may cause actual results to differ materially from any forward-looking statement.Although HudBay has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be anticipated, estimated or intended. 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. HudBayundertakes no obligation to update forward-looking information if circumstances or management's estimates or opinions should change 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. The reader is cautioned not to place undue reliance on forward-looking information.
Chisel North Flin Flon Trout Lake2
Lalor Project Disclaimer
3
HudBay's production decision with respect to Lalor was not based on the results of a pre-feasibility study or feasibility study of mineral resources demonstrating economic or technical viability, because significant portions of the deposit are not able to be classified as a mineral reserve until they can be accessed from underground for additional drilling. Because of this, the production decision was based on mineral resources identified to date and estimates of potential grades and quantities of the gold zone and copper-gold zone, along with other available information, including cost estimates and portions of the engineering design, which have been completed to a level suitable for inclusion in a feasibility study. The preliminary assessment respecting HudBay’s Lalor project is preliminary in nature, includes inferred mineral resources and potential grades and quantities of minerals that are considered too speculative geologically to have the economic considerations applied that would enable them to be classified as mineral reserves and there is no certainty that the preliminary assessment will be realized. Among the risks associated with the decision to commence production at Lalor is the possibility that the gold zone will not be economically or technically viable, construction timetables, cost estimates and production forecasts may not be realized.
Qualified Person
The technical and scientific information included in this news release was prepared under the supervision of Cashel Meagher, Vice President, Exploration of HudBay, a “qualified person” for the purposes of National Instrument 43-101.
Note to U.S. InvestorsInformation concerning the mineral properties of the Company 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 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 SEC 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 our AIF for the fiscal year ended December 31, 2010, available on SEDAR at www.sedar.com and incorporated by reference as Exhibit 99.1 in our Form 40-F filed on March 31, 2011 (File No. 001- 34244).
Lalor Ramp Constancia Lalor
Production Growth• Significant copper, gold and zinc production growth of 155%, 105% and 60%
respectively, anticipated over five years as Lalor and Constancia are put into production
• Further production upside at Reed and Back Forty
Disciplined and Clear Growth Strategy• Commodity exposure on a per share basis greatly expanded with Norsemont
acquisition• Portfolio of early stage opportunities more than tripled with holdings in 15
exploration and development companies worth $130 million• Growing gold business represents a further significant re-rating opportunity
Consistent Performance from Existing Low Risk Operations• Strong cash flow generation from existing mines• 1,300 employees with an average of 19 years of service
Fully Funded Growth• $1.1 billion of pro-forma liquidity available• Dividend reinforces capital allocation discipline• Increasing trading liquidity with NYSE listing
Investment Highlights A significant re-rating opportunity
1
2
3
4
4
5
155% Growth
Cu Production
0
25
50
75
100
125
2011E 2016E
Precious Metals Production(1) Zn Production
105% Growth
0
40
80
120
160
200
240
2011E 2016E
60% Growth
0
25
50
75
100
125
150
2011E 2016E
(kt) (koz) (kt)
(1) Silver converted to gold at a ratio of 50:1(2) Based on midpoint of 2011 forecasted production released on December 13, 2010. Anticipated production for 2016 is based on 777 and the 777
North expansion(3) Lalor’s anticipated 2016 gold equivalent production includes production from inferred resources and the conceptual gold and copper-gold zones(4) Based on contained metal in concentrate per NI 43-101 technical report titled, “Constancia Project Technical Report”, dated February 21, 2011.
HudBay - Current Ops (2) Lalor (3) Constancia (4)
Production Growth Further production growth expected from Reed and Back Forty
Metals Reserves Growth Near quadrupling of Cu equivalent reserves
6
(1) HudBay reserves as of January 1, 2010, excluding Fenix. (2) HudBay reserves as of March 31, 2011 excluding Fenix. (3) In-situ value calculated using commodity prices of US$900/oz Au, US$0.95/lb Zn, US$2.50/lb Cu and US$12.00/lb Mo;
silver converted to gold at ratio of 60:1
791
30711121
713
1286
1550
0
1,000
2,000
3,000
4,000
5,000
2010 2011
(000 tonnes)
3198
5334
Proven & Probable InferredMeasured & Indicated
1,3 2,3
288%
Copper Eq. Reserves & Resources
288% increase in copper equivalent reserves(all metals)
68% increase in precious metals reserves and resourcesProven & Probable Reserves 3.0 M ozMeasured + Indicated Resources 1.1 M ozInferred Resources 1.9 M ozExcludes Lalor Conceptual Est 1.1 – 1.6 M oz
Expansion in Commodity Exposure Per Share
7
(1) HudBay reserves and resources as of January 1, 2010, excluding Fenix. Per share metrics for 2010 are based on 153.9M basic shares outstanding as at Dec. 31, 2009. (2) HudBay reserves and resources as of March 31, 2011 excluding Fenix. Per share metrics for 2011 are based on 149.4M basic shares outstanding as at Dec. 31, 2010
plus 23.4M shares issued to complete the Norsemont Mining acquisition.(3) In-situ value calculated using commodity prices of US$900/oz Au, US$0.95/lb Zn, US$2.50/lb Cu and US$12.00/lb Mo; silver converted to gold at ratio of 60:1
Zn33%
Pb6%
Mo4%
Cu39%Au Eq.
16%
Pb10%
Au Eq.18%
Zn56%
Cu16%
2010 (1)(3)
2011 (2)(3)
Copper
Gold equivalent
Molybdenum
Zinc
Lead
Copper Eq. Reserves & Resources per Share
11.3
39.216.1
9.1
18.4
19.8
0
10
20
30
40
50
60
70
2010 2011
(lb Cu/sh)
Proven & Probable InferredMeasured & Indicated
45.8
68.1
Six Months EndedJune 30
8
Strong Financial Performance Strong financial results reflect higher metal sales volumes and prices
Three Months EndedJune 30
Revenue
Profit before asset impairments1
EPS before asset impairments1
Operating cash flow1
Operating cash flow per share1
1 Profit before asset impairments, EPS before asset impairments and operating cash flow are considered non-GAAP measures. See "Non-GAAP Performance Measures" in our Management's Discussion and Analysis for the quarter ending June 30, 2011.
2011 20102011 2010
246,823
39,967
0.23
63,467
0.37
424,168
56,764
0.35
109,803
0.67
187,341
4,431
0.03
32,499
0.22
428,647
15,014
0.10
82,013
0.54
Six Months EndedJune 30
9
Production Results Strong financial results reflect higher metal sales volumes and prices
Three Months EndedJune 30
Guidance1
Copper tonnes
Zinc tonnes
Precious Metals2 troy oz.
Co-Product Cash Costs3
Gold US$/oz
Copper US$/lb
Zinc US$/lb
11,840
16,881
22,669
$266$1.50$1.00
40-55,000
70-90,000
95-120,000
1 Metal reported in concentrate is prior to refining loses or deductions associated with smelter terms.2 Silver production converted to gold at the average gold and silver realized sales prices during each respective quarter. 3 Cash costs are considered non-GAAP measures. See "Non-GAAP Performance Measures" in our Management's Discussion and Analysis for the quarter
ending June 30, 2011.
12,123
24,961
24,475
-
-
-
201126,226
36,086
52,415
$258$1.26$1.00
201023,840
40,103
47,405
-
-
-
2011 2010 2011
10
1 Includes cash, $300 million credit facility and $140 million for sale of Fenix project2 As at market close on August 4, 2011
Available Liquidity (Pro-forma)1
Long Term Debt
Shares Outstanding
Annualized Dividend Yield2
$1.1 billion
0
171.4 million
1.7%
June 302011
Solid Financial PositionAvailable liquidity of $1.1 billion with no debt
Additional debt financing can maximize financial flexibility
1 2
4
3
Americas Based Mining Company
777 (MANITOBA)1
Lalor (MANITOBA) 2
Constancia (PERU)3
Back Forty (MICHIGAN)4
Exploration Properties
Producing/Development Properties
11
Flin Flon Greenstone Belt Prolific and underexplored camp
AmiskLake
AmiskLake
ReedLake
ReedLake
NN
25 km25 km
Flin FlonFlin Flon
Snow LakeSnow Lake
Hwy #39Hwy #39
Hwy #10Hwy #10
777 Mine777 Mine
Trout Lake MineTrout Lake Mine
Flin FlonOre ConcentratorZinc plant
Snow Lake Ore Concentrator
LalorProject
Lost Deposit
Lost Deposit
Chisel North MineChisel North Mine
Reed Copper Project
777 Mine Blue chip long-life operation set to expand
• $20 million expansion of 777 North
• Production growth from expansion
• Underground exploration access
• Enhanced access to existing mine
13
1 12 months ended December 31, 2010.2 2011 forecast.3 Contained metal in concentrate, 2011 forecast.4 Estimated Mineral Reserves and Resources – January 1, 2011
OwnershipLife of Mine
Mining Costs/tonne ore2
2011 Production Forecast3
Cu tonnes
100%9 years
777 OVERVIEW
Zn tonnesAu equivalent oz
Proven ProbableTonnes (M)Au (g/t)Ag (g/t)Cu (%)Zn (%)
4.52.27
29.382.874.44
8.31.79
27.311.784.24
2011 Prod.Forecast
1.492.0
27.92.84.2
Reserves and Resources4
Milling Costs/tonne ore2
Annual Sustaining CAPEX1 $22 millionAnnual Ore Production (tonnes)2
$37-$41
38,80051,90079,900
$11-$13
1.49 million
777 Mine Underground exploration potential being tested for the first time
14
Downcast777 SHAFTDowncast
Raise
METALLURGICAL COMPLEX
777
Shaf
tResources to be mined
Mined areas
Exploration Target Areas
0m 100m 200m 300m
530m level
840m level
1412m level
LalorDevelopment and construction on track
• Access ramp near 2,500 meter mark• Ventilation shaft presink completed; scheduled
for completion in Q2 2012 • Construction started on permanent fresh air fan
and heater system for ramp
15
Indic.1,3 Inferred1,3
Tonnes (M)Au (g/t)Ag (g/t)Cu (%)Zn (%)
2.61.0
27.10.295.72
4.81.3
26.20.589.25
Inferred1,3
5.44.7
30.60.470.46
Base Metal Zone Gold Zone
Tonnes (M)Au (g/t)Ag (g/t)Cu (%)Zn (%)
4.3 – 5.15.1 – 6.1
23 – 270.2 – 0.40.2 – 0.4
5.8 – 7.0
18 – 223.2 – 4.00.2 – 0.3
1.8 – 2.2
100%20 years
$704 million$22 million
$36.00$16.00
OwnershipProjected Life of MineConstruction CAPEX (2010-2014)Annual Sustaining CAPEXEstimated Mining Cost/tonneEstimated Milling Cost/tonne
Prob.2
10.51.6
21.00.648.31
RAMP Development
SHAFT Development
2010 2011 20122009 2013 2014 2015
Construction of ramp Initial production
Shaft construction Fullproduction via shaft
Q3 Q4Q2Q3 Q1Q4 Q3 Q4Q2Q1 Q3 Q4Q2Q1 Q3 Q4Q2Q1 Q3 Q4Q2Q1 Q3Q2Q1
Au Zone Cu-Au Zone Conceptual Estimate1,3
(1) Mineral resources and potential conceptual estimates are exclusive of and additional to stated mineral reserves.
(2) As at January 1, 2011(3) As at May 1, 2010
Lalor Exploration drilling further extends copper-gold zone1
16
Exploration Platform
Cu-Au25
21
26
27
24
1000m
500m
40
10
11
203031
750m
1250m Cu-Au zone
Looking N70oW0m 250m
Ramp from Chisel
Base Metal Resource
Gold Potential Mineral
Zn Rich
Au Rich
Vent Raise Production Shaft
DUB-270
4.8m 7 g/t Au, 21 g/t Ag, 4.8% Cu
1500m
Copper - Gold Potential Mineral
Gold Inferred Resource
DUB-189W01
8m 9.28 g/t Au, 46.9 g/t Ag
DUB-274
5.1m 13.7g/t Au, 19.8 g/t Ag, 4.4% Cu
DUB-274W02
Three zones of Cu-Au mineralization
1. For additional detail on Lalor, refer to HudBay’s technical report entitled “Technical Report, Lalor Deposit, Snow Lake, Canada” dated October 8, 2009
17
Benefits of Project Optimization1
Optimized Lalor Lalor – Aug. 4, 2010Construction CAPEX C$ 704M C$ 560MAnnual Sustaining CAPEX C$ 22M C $15M
Production Rate 4,500 tpd 3,500 tpdMining Costs $36 per tonne $56 per tonneMilling Costs $16 per tonne $24 per tonne
Metallurgy
95% Zn86% Cu66% Au60% Ag
95% Zn90% Cu80% Au75% Ag
1 All figures are estimates
Decision to construct a gold plant will be made beforehigher grade gold mineralization is mined
Reed Copper Project Construction decision expected by the end of 2011
18
1 HudBay has a 70% interest in the Reed copper project pursuant to a joint venture with VMS Ventures.
Location 115 km from Flin Flon
Indicated InferredTonnes (M)Cu (%)Zn (%)Ag (g/t)Au (g/t)
2.554.520.917.860.64
0.174.260.524.550.38
2011 Resources
Reed Copper Project
Life of Mine ~5 yearsOwnership1 70%
• Application for advanced exploration permit expected to be submitted in Q3 2011
• Hole RLE006 on an adjacent option property tested these anomalies and intersected the following zones of mineralization:
• 7.18 meters of 7.44% Cu, 0.23% Zn, 0.48 g/t Au and 7.57 g/t Ag
• 44.49 meters of 0.79% Cu, 0.39% Zn, 0.16 g/t Au and 1.58 g/t Ag
ConstanciaUS$116 million pre-construction program to enable construction decision in early 2012
19
LocationOwnership
By-Products
Cash Costs2
Peru100%
CONSTANCIA OVERVIEW 1
Proven ProbableTonnes (M)Cu (%)Mo (g/t)Ag (g/t)Au (g/t)
195.00.421173.490.04
177.00.37
923.660.05
RESERVES
Capital Costs
Life of Mine 15 yearsAvg. Annual Cu Prod.
Mo, Ag, AuUS$920M
85,000 t
US$0.93/lb Cu
Concentrator Capacity 70,000 tpd
(1) Based on NI 43-101 technical report titled, “Constancia Project Technical Report”, dated February 21, 2011 available under Norsemont’s profile at www.sedar.com.
(2) Excludes sustaining CAPEX, which equates to approximately $0.09/lb Cu
Constancia Budget (US$M)Environmental, Permitting, Land 12G&A 12Engineering 10Construction 27Procurement 46Exploration 9
Total 116
Pampacancha Skarn Target Cu-Au Sulphides
Chilloroya Skarn TargetHigh Grade Gold Target
Chilloroya Porphyry TargetCu-Au Sulphides
• Hole PO-11-077 intersected 2.48% copper over 52.5 meters and hole PO-11-079 intersected 1.06% copper over 44.7 meters
• Obtained permits required to continue testing mineralized extent of Pampacancha
• Three drills will continue to explore Pampacancha to the north and west
• Targets identified for future drilling at Chilloroya South
PO-11-072121.45m1.62% Cu13.62 g/t Ag1.02 g/t Au
SO-10-0103.0m7.10 g/t Au0.6 g/t Ag
SR-10-0133.0m242.6 g/t Au19.1 g/t Ag
Constancia Main
North
0 1 km
Constancia Exploration Program Drilling confirms continuity of copper mineralization
20
PO-11-07752.50m2.48% Cu3.23 g/t Ag
• Permit application and economic assessment are ongoing
• Engineering efforts focused on optimal size and scope of project
21
M&I InferredTonnes (M)Au (g/t)Ag (g/t)Cu (%)Zn (%)
17.91.57
19.600.192.44
3.41.31
25.170.461.87
Oct. 15, 2010 Resource Table:Combined Open Pit & Underground
Targeting second quarter of 2012 for permit application
Ownership 51% (65%1)
1 65% on completing a feasibility study & submitting a mine permit application; option to Aquila for 75% on free carry to development
Back Forty ProjectExploration drilling to continue on near deposit geophysical anomalies in Q3 2011
1 Estimated Mineral Resources – May 24, 2007 by Scott Wilson RPA - Metal Price used Ag $7/oz, Zn $0.57/lbs, and Pb $0.35/lbs2 Metal price assumption: Ag $15/oz, Zn $0.95/lbs, and Pb $0.70/lbs3 1986 Internal Reserve HBMS quoted as a historical estimate of mineral reserves included for illustrative purposes only and should not be considered a mineral reserve for purposes of NI 43-101.
OwnershipLife of Mine
100%7-18 years
Indicated InferredTonnes (M)Ag (g/t)Zn (%)Pb (%)In-situ $/t2
6.456.6
6.35.1
$238
24.533.9
6.73.5
$211
2007 Resources1
Production Rate TPD 2000-5000Environmental Permitting 5-8 years
HistoricReserve3
18.468.4
6.66.4
$270
Tom & Jason Overview
22
Yukon: Tom & JasonActive exploration to begin in mid-August 2011
• Two drills to test possible extensions to known mineralization
• Will enable collection of metallurgical samples required for preparation of economic assessments
• Exploration intended to assist with upgrading and expanding current mineral resource
• Preliminary economic assessment expected in early 2012
$68 Million Investment in 2011 Exploration• Includes US$9 million exploration spending at Constancia
Exploration Program Highlights
1
2
3
4 Expanding Activity in New Camps Across Americas• $16 million committed to Back Forty• Exploration re-start at Tom and Jason Deposits in Yukon• San Antonio project in Chile is focused on exploration and evaluation• Constancia budget currently being formulated
One of the Largest Budgets in HudBay’s History
Nearly $33 Million in Flin Flon Greenstone Belt for Grassroots, Near Mine, and Exploration Near Projects
Total Drill Meters for 2011 Program is approx. 190,000 23
Growth of Mineral DepositsDiscoveries in the Greenstone Belt
24
0 5 10 15 20 25 30Tonnes (millions)
MandyNorth StarBirch Lake
FlexarCuprus
Ghost & LostPhoto
RodDickstone
White LakeCoronation
Chisel PitWestarm
CentennialSchist Lake
SpruceKonuto
AndersonOsborne
ChiselCallinan
Chisel U/GStall Lake
Lalor777
Trout LakeFlin Flon
2011 Exploration Budget of $68 million
The mineral resource estimate for Lalor is made up of 13.3 million tonnes of indicated resources and 10.2 million tonnes of inferred mineral resources, not including 6.9 – 8.3 million tonnesof conceptual estimates.
Initial resourceAdded resource
62.5⁄⁄
25
Focus on Americas, mining favourable jurisdictions
VMS or porphyry deposits with exploration upside
Transaction size of no more than 20% of market capitalization
Add value through technical expertise and financial capacity
Accretive to in-situ metal value and net asset value per share
In 2011, HudBay is committed to executing against growth strategy
Clearly Defined Acquisition Strategy Helps create sustainable underlying business value
26
Substantial Near Term News Flow
2011 2012
Preparation for permit application and economic assessment are ongoing; Engineering efforts focused on optimal size and scope of project
BACK FORTY Initial production at a rate of 1,200 tonnesper day by Q2-2012
Construction decision expected in Q1 2012
. . .
REED PRODUCTION DECISION
Q4 2011
CONSTANCIA
Feasibility study and permit application submission by end of Q2 2012
BACK FORTY
LALORUnderground drill platform established
LALOR
1 All timelines reflect HudBay’s current expectations.
1
Preliminary economic assessment in early 2012
TOM & JASON
Mission Statement
27
To create sustainable value through increased commodity exposure on a per share basis, in high quality and growing long life deposits in mining friendly jurisdictions
APPENDIX28
Appendix Contents
• Cost Curves
• 2011 Operating Guidance, Capital Expenditures and Exploration Spending Breakdown
• Lalor Guidance, Mineralization and Plan Views
• Constancia Project
• Back Forty Deposit
• Tom & Jason Deposit
• South America Property
• Early Stage Investments
• Reserves & Resources29
0
200
400
600
800
1,000
1,200
1,400
1,600
0 10 20 30 40 50 60 70 80 90 100
Cumulative Percentile Production (%)
C1 C
ash
Cos
t (U
S$/
oz A
u)Gold Cost Curve
777 Mine 1
Lalor 1
Source: Brook Hunt (curve) and HudBay estimates (777 Mine and Lalor).
1 Co-product cash costs calculated using Brook Hunt’s co-product costing methodology which is materially different from the co-product costs reported by HudBay in its public disclosure.30
0
50
100
150
200
250
300
0 10 20 30 40 50 60 70 80 90 100
Cumulative Percentile Production (%)
C1 C
ash
Cost
(100
x U
S$/lb
Cu)
Copper Cost Curve
Lalor 2
777 Mine 1
Constancia (LOM) 3
31
Source: Brook Hunt (777 Mine and curve) and HudBay estimates (Lalor).
1 Brook Hunt co-product cash costs.2 Co-product cash costs calculated using Brook Hunt’s co-product costing methodology which is materially different from the co-product costs reported by HudBay in its public disclosure.
3 Based on NI 43-101 technical report titled, “Constancia Project Technical Report”, dated February 21, 2011.
0
20
40
60
80
100
120
0 10 20 30 40 50 60 70 80 90 100
Cumulative Percentile Production (%)
C1
Cas
h C
ost (
100
x U
S$/lb
Zn)
Zinc Cost Curve
777 Mine 1Lalor 2
32
Source: Brook Hunt (777 Mine and curve) and HudBay estimates (Lalor).
1 Brook Hunt co-product cash costs.2 Co-product cash costs calculated using Brook Hunt’s co-product costing methodology which is materially different from the co-product costs reported by HudBay in its public disclosure.
33
2011 Operating Guidance
777 Trout Lake Chisel Northtonnes 1,490,000 450,000 260,000
Zinc % 4.2% 2.8% 6.1%Copper % 2.8% 1.8% 0.5%Gold g/tonne 2.0 - -Silver g/tonne 27.9 - -
C$/tonne $37 - 41 $70 - 86 $80 - 100
Ore MinedGrades
Unit Operating Costs 3
1 Metal reported in concentrate is prior to refining loses or deductions associated with smelter terms.2 Gold Equivalent production includes gold and silver production. Silver converted to gold equivalent at 60:1 ratio.3 Forecast unit operating costs are calculated on the same basis as reported unit operating costs in HudBay’s quarterly and annual management’s discussion and analysis. For a reconciliation of the costs that are included in unit operating costs to total operating costs in accordance with GAAP, refer to the Non-GAAP Detailed Operating Expenses table in HudBay’s MD&A for the nine months ended September 30, 2010. Costs in any particular quarter can vary from the annual guidance above based on a variety of factors including the scheduling of maintenance events and seasonal heating requirements.
Zinc tonnes 70,000 – 90,000Copper tonnes 40,000 – 55,000Gold Equivalent 2 ounces 95,000 – 120,000
tonnes
Zinc %Copper %Gold %
C$/tonne
Ore MilledRecoveries
Unit Operating Costs 3
Flin Flon Snow Lake
2,000,000 200,000
83% 95%93% -69% -
$11 - 13 $25 - 29
Metal in Concentrate1
34
2011 Operating Guidance – Zinc Plant
Flin Flon Zinc Plant2011
Guidance
Zinc concentrate treatedDomestic tonnes 155,000Purchased tonnes 65,000
Total tonnes 220,000
% 97%
tonnes 115,000
C$/lb $0.31 - 0.35
Recovery
Zinc Produced
Unit Operating Costs1
1 Forecast unit operating costs are calculated on the same basis as reported unit operating costs in HudBay’s quarterly and annualmanagement’s discussion and analysis. For a reconciliation of the costs that are included in unit operating costs to total operating costs inaccordance with GAAP, refer to the Non-GAAP Detailed Operating Expenses table in HudBay’s MD&A for the nine months endedSeptember 30, 2010. Costs in any particular quarter can vary from the annual guidance above based on a variety of factors including thescheduling of maintenance events and seasonal heating requirements.
2011 Capital Expenditures
35
• ~3/4 of Capex allocated to growth initiatives in 2011• Well positioned to fund growth investments
(figures in C$ millions)2010
Guidance2011
Guidance
Lalor $65 $140
777 North - 8
Fenix - 13
Back Forty 14 -
79 268
28 -
101 105
$208 $373Total Capital Expenditures
Preparation for sale of concentrate
Growth
Total Growth Capital
Sustaining
Constancia - 107
2011 Exploration Expenditures
Reed Copper Project & Cold/Lost 2Grassroots Exploration (including Lalor) 27Other 4
33
Fenix (excluding project development) 5Back Forty (including project development) 16Yukon 2Chile 2Other 1
26
$68
Total Other Opportunities
Total Exploration Expenditures
Flin Flon Greenstone Belt
Total FFGB
Other Opportunities
Flin Flon Greenstone Belt
Constancia 9
MetersDrilled
9,00080,00020,000
109,000
16,00025,0005,0005,0005,000
56,000
190,000
25,000
36
Total(C$ millions)
Lalor Project Guidance
• CAPEX for new concentrator (including paste backfill plant) estimated at $264 million
• $120 million estimate in August 2010 for Snow Lake concentrator refurbishment
• Incremental investment of $144 million brings total Lalor CAPEX to $704 million
• Non-concentrator capital costs remain on budget; $122 million incurred to June 30, 2011
37
2011 $140 million
2012 $190 million
2013 $185 million
2014 $130 million
Tonnes(millions)
Au(g/t)
Ag (g/t)
Cu (%)
Zn(%)
Reserves
Proven - - - - -
Probable 10.5 1.55 21.0 0.64 8.31
Base Metal Zone Mineral Resource
Indicated 2.6 1.0 27.1 0.29 5.72
Inferred 4.8 1.3 26.2 0.58 9.25
Gold Zone Inferred Mineral Resource
Inferred 5.4 4.7 30.6 0.47 0.46
Potential Gold Zone Conceptual Estimate 5.1 – 6.1 4.3 – 5.1 23 – 27 0.2 – 0.4 0.2 – 0.4
Potential Copper-Gold Zone Conceptual Estimate 1.8 – 2.2 5.8 – 7.0 18 – 22 3.2 – 4.0 0.2 – 0.3
Lalor Mineralization
The Lalor gold zone and copper-gold zone potential mineral deposit estimates are conceptual in nature and to date there has been insufficient exploration to define a mineral resource compliant with National Instrument 43-101. It is uncertain if further exploration will result in the target deposit being delineated as a mineral resource. Additional detail may be found in HudBay’s press release dated August 4, 2010, available at www.sedar.com.38
LalorProject
39
Down plunge exploration potential
Constancia - Strategic Location
Selected Cu Projects in Peru Established Mining District
Toromocho
Marcona
Galeno
Rio Blanco
Lima
Haquira ConstanciaLas Bambas
Tintaya
Antamina
Antapaccay
Operating Mine
Development Project
CuajoneToquepala
Cerro Verde
Cerro Corona
Close to roads, major power lines, a rail line and port
Southern Peru Copper Belt
Rail Road to Matarani
Main Powerlines
Xstrata - Las Bambas Proposed Mineral Pipeline
Roads
First Quantum – Haquira
Pan Pacific – Quechua
Xstrata – Las Bambas
Xstrata – Antapaccay
AREQUIPA DEPT.
CUSCO DEPT.
Cusco
40
Constancia NI 43-101 Mineral Reserves
Grade ContainedMt Cu (%) Mo (g/t) Ag (g/t) Au (g/t) Cu (mlb) Mo (mlb) Ag (koz) Au (koz)
Reserves
Proven 195 0.42 117 3.49 0.04 1,806 50 21,880 251
Probable 177 0.37 92 3.66 0.05 1,444 36 20,828 285
Total 372 0.39 105 3.57 0.05 3,250 86 42,708 536
Source: NI 43-101 technical report titled, “Constancia Project Technical Report”, dated February 21, 2011
41
Peru Tax and Royalties
• Royalties:• Staged Peruvian mining royalty based on NSR
• 1% NSR – when NSR < US$60 million per annum• 2% NSR – when US$60 < NSR < US$120 million per annum• 3% NSR – when NSR > US$120 million per annum
• 0.5% NSR Minera Livitaca and Katanga (capped at US$10 million)• Labour participation = 8% of pre-tax profits• 30% corporate income tax rate• Deductible expenses for corporate income tax:
• Peruvian mining royalty• Labour participation = 8% of pre-tax profits• Tax depreciation
• Withholding/Dividend Tax:• 4.1% applies to profits distributed to nonresidents
• Legal Stability Agreements• Guaranteed stability of income tax regime for 15 years
Source: Norsemont’s NI 43-101 technical report titled “Constancia Copper Project – Definitive Feasibility Study”, dated September 28, 2009
42
The Back Forty Project –Mineral Resources October 15, 2010*
*Mineral resources are not mineral reserves and do not have demonstrated economic viability. All figures have been rounded to reflect the relative accuracy of the estimates. The cut-off grades are based on metal price assumptions of US$0.95 per pound zinc, US$2.50 per pound copper, US$0.70 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.†
Cut off grades were determined for each of the metallurgical domains based on NSR values. Average cut-off grade for the open pit resource contained within an optimized pit shell was US$20. See “Mineral Resource Estimate Disclosure.”‡
Cut off grades were determined for each of the metallurgical domains based on NSR values. Average cut-off grade for the underground resources outside of the optimized pit shell was US$62. See “Mineral Resource Estimate Disclosure.”
Classification Tonnes (millions) Au (g/t) Ag (g/t) Cu (%) Zn (%)
Open Pit †
Measured 14.1 1.59 16.97 0.15 2.54
Indicated 2.1 1.53 32.80 0.41 1.17
Measured and Indicated
16.2 1.58 19.00 0.18 2.36
Inferred 1.4 1.40 32.89 0.62 1.00
Underground ‡
Measured 0.8 1.67 25.83 0.24 3.45
Indicated 0.9 1.28 24.72 0.34 2.85
Measured and Indicated
1.7 1.46 25.23 0.29 3.13
Inferred 2.0 1.22 18.34 0.32 2.64
Combined Open Pit and Underground
Measured and Indicated
17.9 1.57 19.60 0.19 2.44
Inferred 3.4 1.29 24.33 0.44 1.96
43
Tom and Jason 5,000 metre drill program to upgrade resource
• 100% owned, located in the Selwyn Basin• Deposits are relatively shallow from surface
to 600m depth• Can be accessed via ramp
44
Class MTAu
(g/t)Ag
(g/t)Zn(%)
Pb(%)
Cu(%)
$/t
Tom & Jason
M&I 6.4 - 56.6 6.3 5.1 - $238
Inf 24.5 - 33.9 6.7 3.5 - $211
SelwynM&I 154 - - 5.4 1.9 - $141
Inf 234 - - 4.6 1.4 $118
Wolverine2P 5.2 1.4 282 9.7 1.3 0.9 $447
Inf 1.7 1.7 385 12.2 1.7 1.2 $585
Metal price: Au $900/oz, Ag $15/oz, Zn $0.95/lbs, Cu $2.50/lbs, and Pb $0.70/lbs
In-situ Resource Value
MacTung
Wolverine
SelwynFaro
Cano
l Roa
d ~
200k
m
YUKONTERRITORY Tom & Jason
PropertiesTom & Jason Properties
Ross River
NORTHWESTTERRITORIES
Whitehorse
Paci
fic O
cean
Argentina
VALLENAR
COPIAPO
LA SERENACOQUIMBO
CHANARAL EL SALVADOR
SAN ANTONIODOS AMIGOS Cu
CANDELARIA Cu
EL SALVADOR Cu
MANTOS VERDES Cu
HUASCO
South America – Property Acquisition
• Focus on Chile, Peru and Columbia
• Compilation of geological data at San Antonio
• Option Agreement signed for greenfield Cu-Au prospect Loma Negra
• Regional Exploration office opened in Santiago
• Evaluation of early stage exploration opportunities underway
Antofagasta
Copiapo
SANTIAGO
SAN ANTONIO
CHILE
La Serena
45
LOMA NEGRA
Investing in Early Stage Opportunities Enables us to participate in development of new mining camps
46
Project Location Strategic Consideration Equity
Joint Ventures
Aquila Resources Back Forty Michigan Advanced stage, gold-zinc VMS, exploration upside
Yes
VMS Ventures Reed Lake Manitoba VMS, near-term copper production, exploration upside
Yes
Equity Placement
Augusta Resources Rosemont Arizona Advanced stage copper porphyry Yes
Copper Reef Mining WAX Claims Manitoba VMS, proximity to existing infrastructure
Yes
CuOro Resources Santa Elena Colombia Porphyry and massive sulphide polymetallic deposits
Yes
MacDonald Mines Ring of Fire Northern Ontario VMS and magmatic sulphidedeposits, new camp, exploration
upside
Yes
Polar Star Montezuma Atacama, Chile Copper porphyry, extensive land package, exploration upside
Yes
Waymar Resources Anzá Colombia VMS mineralization Yes
Optionor
Halo Resources Cold, Lost Manitoba VMS, potential near-term zinc production, exploration upside
Yes
Estimated Mineral Reserves1
Mine Tonnes Au (g/t) Ag (g/t) Cu (%) Zn (%)
777
Proven 4,516,000 2.27 29.38 2.87% 4.44%
Probable 8,307,000 1.79 27.31 1.78% 4.24%
Total 12,823,000 1.96 28.04 2.16% 4.31%
777 NORTH
Proven 81,000 1.61 26.52 0.68% 4.89%
Probable 449,000 1.44 21.48 1.09% 3.31%
Total 530,000 1.47 22.25 1.03% 3.55%
TROUT LAKE
Proven 409,000 2.06 9.66 2.10% 3.53%
Probable 36,000 1.17 1.01 2.18% 1.43%
Total 445,000 1.99 8.96 2.11% 3.36%
CHISEL NORTH -ZINC
Proven 164,000 - - - 8.77%
Probable 56,000 - - - 10.60%
Total 220,000 - - - 9.24%
CHISEL NORTH -COPPER
Proven - - - - -
Probable 92,000 2.41 31.56 1.72% 3.67%
Total 92,000 2.41 31.56 1.72% 3.67%
LALOR
Proven - - - - -
Probable 10,525,000 1.55 21.00 0.64% 8.31%
Total 10,525,000 1.55 21.00 0.64% 8.31%
1Estimated mineral reserves exlcude the Fenix project. Please refer to HudBay’s Annual Information Form and Management’s Discussion and Analysis for the year ended December 31, 2010 and applicable technical reports in respect of the properties filed on SEDAR for further information.
January 1, 2011
47
Other Mineral Resources
Grade Containedt Cu (%) Zn (%) Ag (g/t) Au (g/t) Cu (mlb) Zn (mlb) Ag (koz) Au (koz)
REED LAKE
Measured - - - - - - - - -
Indicated 2,550,000 4.52 0.91 7.86 0.64 254.1 51.2 644.4 52.5
M + I 2,550,000 4.52 0.91 7.86 0.64 254.1 51.2 644.4 52.5
Inferred 170,000 4.26 0.52 4.55 0.38 16.0 1.9 24.9 2.1
LOST PROJECT
Measured - - - - - - - - -
Indicated 411,000 1.8 6.1 20.0 1.0 16.3 55.3 264.3 13.2
M + I 411,000 1.8 6.1 20.0 1.0 16.3 55.3 264.3 13.2
Inferred 69,000 1.5 6.2 16.5 0.8 2.3 9.4 36.6 1.8
Source: HudBay Minerals Inc. news release entitled, “HudBay Minerals Announces Near Quadrupling of Metals Reserves; US$116 Million 2011Pre-Construction Program for Constancia,” March 31, 2011
48
Reserves and Resources
• To estimate mineral reserves, measured and indicated mineral resources were first estimated by 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 on a fully costed basis using historical operating costs. Other factors such as depletion from production are applied as appropriate. Long term metal prices, excluding premiums, used to determine economic viability of the 2010 mineral reserves were US $900 oz. gold, US $15.00 oz. silver, US $2.50 lb. copper and US $0.95 lb. zinc.
• The 2011 estimated mineral reserves were prepared under the supervision of Robert Carter, P.Eng., who is employed by HBMS as Superintendent, Mines Technical Services and who is a Qualified Person as defined by NI 43-101.
49
Reserves and Resources
• Cashel Meagher, P.Geo., Vice President, Exploration, of HudBay Minerals Inc. is the Qualified Person accountable for the supervision of the technical information contained within this presentation as defined by NI 43-101 with respect to the Fenix project.
• Greg Greenough, P.Geo., a Senior Resource Geologist with Golder Associates carried out, and is responsible for the Back Forty resource estimate described in this presentation. Cashel Meagher P.Geo, VP Exploration for HudBay Minerals Inc. is the Qualified Person for HudBay as described in NI 43-101 and is responsible for the Back Forty contents of this presentation.
• Please refer to HudBay’s Annual Information Form and Management’s Discussion and Analysis for the year ended December 31, 2010 and applicable technical reports in respect of the properties filed on SEDAR for further information.
50
For more information contact:
John Vincic, VP of Investor Relations and Corporate CommunicationsTel: 416.362.0615Email: [email protected]
HBM
hudbayminerals.com2011.v.29
