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Hudbay Minerals Announces Second Quarter 2005 Results

August 10, 2005
TORONTO, ONTARIO--(CCNMatthews - Aug. 10, 2005) - HudBay Minerals Inc. (TSX:HBM)(TSX:HBM.WT)

Highlights:

- Second quarter since acquisition of Hudson Bay Mining and Smelting Co., Limited

- Sales revenue $158.2 million for quarter

- Cash position increases to $124 million

- Consolidated cash operating cost US$0.13 per lb of zinc sold, net of by-product credits for the quarter

- $10 million exploration program expenditure continues

HudBay Minerals Inc. (TSX:HBM)(TSX:HBM.WT) earned $8.7 million or $0.11 per share in the second quarter of 2005, compared to a loss of $2.1 million or $0.31 per share in the same period of 2004.

Summarized Financial Results

The following table sets out summary consolidated financial information
for the Company at and for the three-month periods ("quarters") as well as the
six-month periods ended June 30, 2005, and 2004:

------------------------------------------------------------------------
Three Months ended Six Months
March 31 June 30 June 30 ended June 30
-------------------------------------------------
2005 2005 2004(1)(2) 2005 2004(1)(2)
------------------------------------------------------------------------
($000s except per share amounts)
------------------------------------------------------------------------
Statement of operations:
Sales 151,525 158,188 - 309,713 -
Earnings (loss) 9,181 8,691 (2,117) 17,872 (3,781)
Earnings (loss) per
common share(3):
Basic $0.12 $0.11 $(0.31) $0.22 $(0.61)
Diluted $0.12 $0.11 na(4) $0.22 na(4)
------------------------------------------------------------------------
Balance sheet:
Cash and cash
equivalents 97,453 123,967 3,091 123,967 3,091
Total assets 658,894 695,427 15,584 695,427 15,584
Total long term debt
and capital leases,
excluding current
portion 236,993 235,076 1,683 235,076 1,683
Shareholders' equity 170,622 189,914 12,082 189,914 12,082
------------------------------------------------------------------------
(1) Excludes results of HBMS.
(2) Restated to give effect to change in accounting policy related to
expensing of exploration costs, consistent with HBMS practice, and
to retroactively adopt recommendations under Section 3110, Asset
Retirement Obligations.
(3) As of August 9, 2005, there were 83,739,496 common shares of the
Company issued and outstanding, as well as 1,160,989,820 warrants
(pre-consolidated at 30 warrants per one common share).
(4) The conversion of stock options and warrants to calculate fully
diluted was not done for 2004 as the conversion would have been
anti-dilutive.

Quarterly Information

The following table sets forth our selected consolidated financial
information for each of the eight most recently completed quarters. Note
that the results reflect the acquisition of HBMS as of December 21,
2004.

------------------------------------------------------------------------
2005 2004 2003
---------------------------------------------------------------
Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3
---------------------------------------------------------------
(In $000s, except per share information)
------------------------------------------------------------------------
Net
Revenue 158,188 151,525 13,308 6 7 6 3 5
------------------------------------------------------------------------
Earnings
(loss) 8,691 9,181 (2,891) (3,282) (2,083) (1,664) (3,429) (1,359)
------------------------------------------------------------------------
Per Common
Share
------------------------------------------------------------------------
Basic 0.11 0.12 (0.18) (0.45) (0.30) (0.29) (0.65) (0.38)
------------------------------------------------------------------------
Diluted 0.11 0.12 (0.18) (0.45) (0.30) (0.29) (0.65) (0.38)
------------------------------------------------------------------------
Results of Operations

With the exception of ten days in December 2004, HudBay had no production and was essentially a development stage enterprise. As such, discussion and analysis of 2005 compared to 2004 has been limited, and additionally, a comparison of results achieved in the first and second quarters of 2005 has been provided.

Quarter Ended June 30, 2005 Compared to Quarter Ended March 31, 2005

Net income for the quarter ended June 30, 2005 was $8.7 million compared to $9.2 million for the quarter ended March 31, 2005.

Total sales revenue for the quarter ended June 30, 2005 was $158.2 million from sales of approximately 20,200 tonnes of copper, 28,500 tonnes of zinc, 10,600 tonnes of zinc oxide, 26,500 ounces of gold, and 322,200 ounces of silver. Over the quarter, gross realized prices averaged US$1.57/lb copper, US$0.59/lb zinc, US$440/troy oz gold, and US$7.13/troy oz silver. The Canadian to US dollar exchange rate averaged Cdn $1.24 per US $1.00 for the quarter.

Total sales for the second quarter of 2005 improved by 4.4% compared to the first quarter largely as a result of a 5.4% improvement in copper price. Average realized zinc price declined by 4.8% to US 59 cents for pound, although a 5% increase in zinc sales volume offset the impact of the lower price. Operating expenses in the second quarter of 2005, at $114.1 million, decreased by approximately 3.1% compared to the first quarter at $117.7 million, with the decrease largely relating to a 3.0% decrease in mining and processing costs, and a 5.2% decrease in the cost of purchased copper concentrate treated - which equated to a 9.6% reduction in purchased concentrate volume. However, net earnings for the second quarter of 2005 was slightly lower than net earnings for the first quarter as the $6.7 million impact of increased sales and $3.6 million of reduced operating costs was offset by additional expenses. These expenses included a one-time $1.0 million increase in general and administrative costs, $2.6 million additional exploration, miscellaneous net cost decreases of $0.3 million, and non-cash items including a $1.4 million stock-based compensation expense, a $1.4 million unrealized foreign exchange loss, and a $4.2 million change in the valuation of derivative instruments.

General and administrative ("G&A") expenses for the quarters ended March 31 and June 30, 2005 were $3.6 million and $4.6 million, respectively. Total G&A expenses for the six months ended June 30, 2005 included approximately $1.6 million of non-recurring expenses.

In June 2005, a stock option plan was approved whereby the Company may grant options up to 10% of the number of issued and outstanding common shares of the Company to employees, officers, and directors for a maximum term of ten years. In addition, HudBay has undertaken to limit the number of total issued options outstanding to 8.0 million. For the quarter ended June 30, 2005, the Company recorded an expense of approximately $1.4 million relating to stock-based compensation as one-third of the options were exercisable immediately. Based on the stock options granted to June 30, 2005, stock-based compensation is expected to be in the order of $600,000 per quarter for the remainder of the year.

The previously announced program of exploration on the Company's lands in Manitoba and Saskatchewan continued during the quarter. The program provides for up to $10 million of planned exploration in the Flin Flon Greenstone Belt during 2005 and the first quarter of 2006, of which approximately $3 million has been spent as of June 30, 2005.

The unrealized foreign exchange loss relates to the change in US$ denominated debt as valued at quarter end exchange rates.

In the quarter ended June 30, 2005, the Company recorded a $1.8 million loss on derivative instruments compared to a $2.4 million gain for the quarter ended March 31, 2005. The derivatives are forward contracts matched with Considar Metal Marketing ("CMM") fixed price sales contracts. Unexpired contracts are valued based on month end market price compared to the forward price.

In the quarter ended June 30, 2005, the Company recorded a tax expense of $2.7 million compared to an expense of $2.8 million in the quarter ended March 31, 2005. The Company has sufficient tax pools to shelter income and does not anticipate significant cash taxes in the foreseeable future.

Quarter Ended June 30, 2005 Compared to Quarter Ended June 30, 2004

Net income for the quarter ended June 30, 2005 was $8.7 million compared with a loss of $2.1 million for the quarter ended June 30, 2004.

Total sales revenue for the quarter ended June 30, 2005 was $158.2 million from sales of metals produced. The Company had no metal sales in the second quarter of 2004.

Operating costs for the quarter ended June 30, 2005 increased to $114.1 million from $0.7 million for the quarter ended June 30, 2004. Costs in the second quarter of 2004 primarily related to care and maintenance costs of the Balmat Mine acquired in September 2003 but also included care and maintenance costs of the Gays River property.

Six Months Ended June 30, 2005 Compared to Six Months Ended June 30, 2004

Net income for the six months ended June 30, 2005 was $17.9 million compared with a loss of $3.8 million for the six months ended June 30, 2004. Total sales revenue for the six months ended June 30, 2005 was $309.7 million. The Company had no metal sales in the first half of 2004. Operating costs for the six months ended June 30, 2005 increased to $231.8 million from $1.7 million for the six months ended June 30, 2004. Costs in the first half of 2004 primarily related to care and maintenance of the Balmat and Gays River properties.

Cash Cost per Pound of Zinc Sold

HudBay's total cash cost net of by-product credits for the quarter ended June 30, 2005 was US$0.13 per pound of zinc sold. The Company had no metal sales in the same quarter of 2004.

Non GAAP Reconciliation of Cash Cost per Pound of Zinc Sold, Net of
By-Product Credits
Three Months Three Months Six Months
Ended Ended Ended
March 31, June 30, June 30,
HudBay Minerals Inc. 2005 2005 2005
------------ ------------ ------------
($000) ($000) ($000)

Expenses C$135,049 C$136,726 C$271,775
Non-cash operating costs
Depreciation and amortization (12,724) (13,228) (25,952)
Stock-based compensation - (1,354) (1,354)
Accretion and other non-cash (652) (649) (1,301)
------------ ------------ ------------
121,673 121,495 243,168
Less: By-product credits(1) (106,263) (111,408) (217,671)
------------ ------------ ------------
Cash cost net of by-products C$15,410 C$10,087 C$25,497
Exchange rate (C$/U.S$.)(2) 1.227 1.244 1.234
------------ ------------ ------------
Cash cost net of by-products US$12,559 US$8,109 US$20,668
Zinc sales (000 lbs) 59,739 62,754 122,493
Cash cost per pound of zinc,
net of by-product credits US$0.21 US$0.13 US$0.17
------------ ------------ ------------
------------ ------------ ------------

(1) By-product credits include revenues from sale of copper, gold,
silver, the premium on zinc oxide sales and the Company's
proportionate share of by-product sales by its marketing joint
venture.
(2) Average exchange rate for the period.

The above table shows a US 8.0 cent per pound reduction in the cash cost per pound of zinc for the quarter ended June 30, 2005 compared to the quarter ended March 31, 2005. The change is comprised of favourable variances of 1.0 cent arising from the additional sales volume, 6.2 cents from increased copper credits, 1.6 cents from increased gold credits, 2.2 cents from reduced mining and processing costs, 2.3 cents for reduced concentrate purchase cost, 0.5 cents from reduced anode freight and refining costs, and 0.4 cents miscellaneous. Offsetting the favourable variances are increased G&A costs of 1.2 cents, additional exploration of 3.4 cents, and a 1.6 cent reduction in credits from the Company's 50% share of CMM revenue.

The calculation of cash cost per pound of zinc is strongly influenced by by-product metal prices, which may fluctuate going forward.

Operating Costs
Quarter Quarter Six Months
Ended Ended Ended
March 31, June 30, June 30,
2005 2005 2005
----------------------------------------
Mines
Trout $/tonne 36.39 31.49 33.91
Konuto $/tonne 40.32 34.81 37.52
777 $/tonne 42.20 36.07 38.76
Chisel $/tonne 36.28 37.56 36.91
----------------------------------------

Total mines $/tonne 39.16 34.55 36.71

Concentrators
Flin Flon $/tonne 8.21 7.68 7.94
Snow Lake $/tonne 16.51 17.30 16.89

Metallurgical Plants
Zinc Plant $/lb Zn 0.25 0.25 0.25
Copper Smelter $/lb Cu 0.24 0.24 0.24

Non-GAAP Reconciliation of
Operating Expenses ($ 000)
Mine:
Trout 7,754 6,926 14,680
Konuto 3,510 3,132 6,642
777 10,136 9,488 19,624
Chisel 3,141 3,084 6,225
Concentrator:
Flin Flon 4,538 4,290 8,828
Snow Lake 1,414 1,375 2,789
Metallurgical Plant:
Zinc Plant 16,015 16,005 32,020
Copper Smelter 10,770 11,226 21,996
Other:
Purchased Concentrate
Treated 34,555 32,747 67,302
Anode Freight & Refining 6,313 5,931 12,244
Services & Administration 6,059 6,186 12,245
Care & Maintenance 820 1,122 1,942
Zochem (excluding zinc
purchases from HBMS) 4,131 4,279 8,410
Other(1) 8,557 8,319 16,876
----------------------------------------
Total Operating Expenses,
per financials 117,713 114,110 231,823
----------------------------------------
----------------------------------------
(1) Includes profit sharing, changes in domestic inventory, , share of
CMM, and miscellaneous minor provisions.


Cash Flows, Liquidity, and Capital Resources

The following table summarizes our cash flows for the three and six
month periods ended June 30, 2005, and 2004:

------------------------------------------------------------------------
Three Months ended Six Months
March 31 June 30 June 30 ended June 30
-------------------------------------------------
2005 2005 2004(1)(2) 2005 2004(1)(2)
($000s) ($000s) ($000s) ($000s) ($000s)
------------------------------------------------------------------------
Operating activities
Earnings (loss)
for the period 9,181 8,691 (2,117) 17,872 (3,781)
Items not affecting
cash 13,674 24,195 427 39,697 250
Net change in non-
cash items 5,031 5,122 77 8,325 (116)
------------------------------------------------------------------------
Cash generated by
(required for)
operating activities 27,886 38,008 (1,613) 65,894 (3,647)
Cash generated by
(required for)
investing activities (4,298) (18,313) (148) (22,611) (2,450)
Cash generated by
financing activities 9,068 6,099 (812) 15,167 7,074
Foreign exchange loss
on cash held in
foreign currency 244 720 - 964 -
------------------------------------------------------------------------
Increase in cash and
short term deposits 32,900 26,514 (2,573) 59,414 977
------------------------------------------------------------------------
------------------------------------------------------------------------
(1) Excludes results of HBMS.
(2) Restated to give effect to change in accounting policy relating to
expensing of exploration costs, consistent with HBMS practice, and
to retroactively adopt recommendations under Section 3110, Asset
Retirement Obligations.

With the exception of ten days in December 2004, HudBay had no production and was essentially a development stage enterprise. As such, discussion and analysis of 2005 compared to 2004 has been limited, and additionally, a comparison of results achieved in the first and second quarters of 2005 has been provided.

Quarter Ended June 30, 2005 Compared to Quarter Ended March 31, 2005

As of June 30, 2005, HudBay had cash and cash equivalents of $124.0 million compared to $97.4 million as at March 31, 2005. As at June 30, 2005, there were outstanding letters of credit in the amount of $35.2 million, secured by an equal amount of cash. This compares to outstanding letters of credit in the amount of $37.8 million as at March 31, 2005.

Cash flow from operating activities totaled $38.0 million for the quarter ended June 30, 2005 compared to $27.9 million for the quarter ended March 31, 2005. The increase in cash flow from operations relates essentially to the increase in sales revenue and decrease in mining and processing costs as described under Results of Operations.

In the second quarter of 2005, a net total of $18.3 million was required for investing activities, which related essentially to mine development and other sustaining capital expenditures at HBMS. This compares to $17.3 million required for investment in development and other sustaining capital in the first quarter of 2005.

Financing activities in the second quarter of 2005 generated $6.1 million which included approximately $2.8 million proceeds from the exercise of warrants, and the private placement of 2,193,000 flow-through shares at a price of $3.42 per share for a gross aggregate proceeds of approximately $7.5 million, which is being spent on Canadian exploration activities. A repayment of $2.0 million to the provincial government debt and approximately $0.9 million payments under capital lease obligations were made. Financing activities in the first quarter of 2005 generated $9.1 million, which included $8.7 million from issuance of shares and warrants.

As at June 30, 2005, HudBay had long-term financial debt (excluding the current portion) of $224.1 million compared to $225.1 as at March 31, 2005. The Company will consider, from time to time, reducing debt through various means including open market purchases of senior secured notes.

Quarter Ended June 30, 2005 Compared to Quarter Ended June 30, 2004

As of June 30, 2005, HudBay had cash and cash equivalents of $124.0 million compared to $3.1 million as at June 30, 2004. As at June 30, 2005, there were outstanding letters of credit in the amount of $35.2 million, secured by an equal amount of cash, while there were no outstanding letters of credit in 2004.

Cash flow from operations totaled $38.0 million for the quarter ended June 30, 2005. This relates primarily to HBMS operations, which contributed $41.0 million, and compares with $1.6 million cash required for operating activities in the same period in 2004 when the Company incurred a loss of $2.1 million primarily in relation to management fees, mine care and maintenance activities and debenture interest expense.

Six Months Ended June 30, 2005 Compared to Six Months Ended June 30, 2004

Cash flow from operations totaled $65.9 million for the six months ended June 30, 2005. This relates primarily to HBMS operations, which contributed $73.8 million, and compares with $3.6 million cash required for operating activities in the same period in 2004 when the Company incurred a loss of $3.8 million primarily in relation to management fees, mine care and maintenance activities and debenture interest expense.

Interim Financial Condition

Financial Condition at June 30, 2005 Compared to Financial Condition as at December 31, 2004

With the exception of the items discussed below, the financial condition of the Company as at June 30, 2005 is not materially different from that as at December 31, 2004:

-  Cash and cash equivalents at June 30, 2005 increased by $59.4 million
compared to December 31, 2004.
- Restricted cash decreased by $13 million as funds placed in trust for
the Provinces of Manitoba and Saskatchewan as financial assurance for
the Company's asset retirement obligations were replaced with letters
of credit that are also supported by cash in an equivalent amount.
- Working capital improved by $44.6 million, reflecting the improved
cash position net of $13.0 million of restricted cash and routine
fluctuations in other working capital items.
- Share capital increased by $19.9 million, which included
$10.5 million from exercise of warrants and $10.0 million from flow-
through shares, net of $0.6 million share issue costs.
- HudBay's contractual obligations at June 30, 2005 are materially
unchanged from December 31, 2004 except that, for the mutual benefit
of both parties, the evergreen concentrate purchase agreement with
Compania Minera Dona Ines de Collahuasi was terminated effective
June 30, 2005. Pursuant to the agreement, the Company purchased
40,000 dmt of copper concentrate per year. The termination of the
agreement, which would otherwise have expired in 2008, is not
expected to impact the Company's ability to obtain copper concentrate
for its Flin Flon smelter.
- Pursuant to a previous commitment to convert the notes, a prospectus
was filed in Ontario and a registration statement on form F-10 filed
with the SEC, on August 4, 2005, HBMS is offering in the
United States to exchange the outstanding 9 5/8% Senior Secured Notes
due January 15, 2012 (issued on December 21, 2004 in a private
offering) of HBMS for 9 5/8% Senior Secured Exchange Notes due
January 15, 2012, which have been registered under the United States
Securities Act of 1933, as amended (the "Securities Act of 1933").
The terms of the exchange notes are identical in all material aspects
to those of the outstanding notes, except that the exchange notes
will not be subject to the same transfer restrictions, and will not
be entitled to additional interest in the event of a registration
default. The Company has received a commitment from the Bank of Nova
Scotia to establish a revolving credit facility in the total amount
of C$50 million. The first $25 million is committed, with the
remainder contingent upon meeting certain conditions precedent. The
facility is expected to close before the end of the year.
Risk Management

The Company uses forward exchange or currency collar contracts to limit the effects of movements in exchange rates on foreign currency denominated assets and liabilities and future anticipated transactions. At June 30, 2005 the Company held US dollar put options giving it the right, but not the obligation, to sell up to US$70 million in equal quarterly amounts at $1.20482 per US dollar, starting in April 2005 and continuing to January 2009.

From time to time the Company maintains price protection programs and conducts commodity price risk management through the use of instruments similar to those used to limit currency exposures. Through its joint venture interest in CMM, the Company manages risk associated with forward physical sales that are made on a fixed price basis regarding zinc and zinc oxide and, accordingly, enters into forward zinc purchase contracts. These contracts effectively offset the Company's forward sales price commitments. In the current environment of strong base metal market prices, the Company has benefited from full exposure to metal price movements, and will consider implementing protection to limit the effects of future price changes.

HBMS Production

A summary of production statistics for the second quarter of 2005, as well as year-to-date data, together with comparative information for 2004 is shown in the following table:

Second Quarter Results                  Three months          Six months
ended June 30 ended June 30
2005 2004 2005 2004
---- ---- ---- ----
Mines:
Trout Lake: tonnes 219,913 246,404 432,968 450,127
Copper % 1.19 1.33 1.23 1.47
Zinc % 6.51 5.61 6.44 5.31
Gold g/tonne 1.43 1.49 1.49 1.45
Silver g/tonne 14.46 11.74 15.19 12.48

Konuto: tonnes 89,986 87,076 177,048 167,824
Copper % 4.47 4.84 4.33 4.50
Zinc % 1.66 2.28 1.53 2.17
Gold g/tonne 1.84 2.09 1.78 1.97
Silver g/tonne 9.28 10.50 8.89 10.02

777: tonnes 263,078 246,521 506,326 483,825
Copper % 2.16 3.13 2.19 3.23
Zinc % 4.54 4.11 4.16 4.28
Gold g/tonne 2.29 2.23 2.09 2.29
Silver g/tonne 25.93 21.51 23.35 22.96

Chisel North: tonnes 82,100 82,926 168,646 164,849
Copper % 0.22 0.16 0.19 0.16
Zinc % 9.08 10.66 9.36 10.76
Gold g/tonne 0.77 0.80 0.72 0.59
Silver g/tonne 36.20 28.51 30.19 29.75

Total Mines: tonnes 655,077 662,927 1,284,988 1,266,625
Copper % 1.91 2.31 1.90 2.38
Zinc % 5.37 5.25 5.25 5.21
Gold g/tonne 1.75 1.76 1.67 1.73
Silver g/tonne 21.08 17.31 19.51 18.40


Second Quarter Results Three months Six months
ended June 30 ended June 30
2005 2004 2005 2004
---- ---- ---- ----
Concentrators:
Flin Flon Concentrator: tonnes 558,919 533,586 1,111,748 1,059,852
Copper % 2.10 2.58 2.10 2.65
Zinc % 4.85 4.46 4.69 4.39
Gold g/tonne 1.87 1.88 1.79 1.89
Silver g/tonne 18.42 15.94 17.69 16.95

Copper Concentrate
Produced tonnes 44,957 54,202 90,623 111,373
Grade % Cu 24.27 23.67 23.66 23.60
Zinc Concentrate
Produced tonnes 44,366 37,249 83,814 72,345
Grade % Zn 52.10 50.35 51.27 50.00

Copper recovery to
Cu Conc % 92.9 93.2 91.9 93.6
Gold recovery to
Cu Conc % 78.3 66.8 77.9 67.4
Silver recovery to
Cu Conc % 66.6 66.8 67.3 64.8

Zn recovery to Zn Conc % 85.3 78.8 82.5 77.8

Snow Lake Concentrator: tonnes 79,496 75,772 165,128 157,467
Zinc % 9.09 10.65 9.38 10.76

Zinc Concentrate
Produced tonnes 13,643 15,165 29,470 31,913
Grade % Zn 51.68 51.53 51.26 51.59

Zn recovery to Zn Conc % 97.5 96.8 97.6 97.2



Second Quarter Results Three months Six months
ended June 30 ended June 30
2005 2004 2005 2004
---- ---- ---- ----
Smelter:
Copper Concentrate Treated:
Domestic tonnes 53,038 44,518 101,390 94,387
Purchased tonnes 26,057 27,608 54,896 55,474
--------- --------- --------- ---------
Total tonnes 79,095 72,127 156,286 149,862

Zinc Plant:
Zinc Concentrate Treated:
Domestic tonnes 58,105 54,722 116,914 104,471
Purchased tonnes 0 0 0 3,488
--------- --------- --------- ---------
Total tonnes 58,105 54,722 116,914 107,960


Metal Produced:
From HBMS Mines:
Copper tonnes 12,407 10,654 23,819 22,294
Zinc tonnes 29,162 26,639 58,339 50,935
Gold oz 27,177 17,026 52,374 35,373
Silver oz 232,797 144,376 447,407 310,174

From Purchased Concentrates:
Copper tonnes 8,652 8,583 17,939 18,590
Zinc tonnes 26 25 53 1,790
Gold oz 363 283 940 713
Silver oz 106,201 108,542 229,886 219,390

Total Metal Produced:
Copper tonnes 21,060 19,237 41,757 40,884
Zinc tonnes 29,188 26,664 58,392 52,725
Gold oz 27,540 17,309 53,314 36,086
Silver oz 338,998 252,918 677,293 529,564
About HudBay Minerals Inc.

HudBay Minerals Inc. is an integrated mining and metal producing company that operates mines and concentrators in northern Manitoba and Saskatchewan and a metal processing complex in Flin Flon, Manitoba. The company also operates a zinc oxide production facility in Brampton, Ontario and the former producing mines of Balmat in New York State and Gays River in Nova Scotia that are being evaluated for re-opening.

Unless the context otherwise suggests, references to "we", "us", "our" and similar terms, as well as references to the "Company", refer to HudBay Minerals Inc. All figures are in Canadian dollars unless otherwise noted

This press release contains certain forward-looking statements. All statements, other than statements of historical fact, included herein, including without limitation, statements regarding the Company's future plans and objectives are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove accurate, and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company's expectations are disclosed in documents that we have filed from time to time with the Toronto Stock Exchange and other regulatory authorities.

Certain items of financial information in this press release, including unit operating expenses, and cash cost per pound of zinc, net of by-product credits are non-GAAP measures and are furnished to provide additional information. As non-GAAP measures they do not have standardized meanings nor are they necessarily comparable with similar measures presented by other companies. These measures should not be considered in isolation as a substitute for measures of performance prepared in accordance with generally accepted accounting principles and are not necessarily indicative of operating expenses as determined under generally accepted accounting principles. These measures are intended to provide investors with information about the cash generating capabilities of the Company's operations. HudBay uses this information for the same purpose. Mining operations are capital intensive. These measures exclude capital expenditures. Capital expenditures are discussed throughout the press release and the unaudited consolidated financial statements.

FOR FURTHER INFORMATION PLEASE CONTACT:

HudBay Minerals Inc.
Peter R. Jones
President & CEO
(204) 949-4261
peter.jones@hbms.ca
www.hudbayminerals.com

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