WINNIPEG, MANITOBA--(CCNMatthews - March 22, 2006) - HudBay Minerals Inc. (TSX:HBM) -
2005 Financial Highlights
- Record earnings of $85.2 million or $1.04 per share
- Operating cash flow of $144.8 million or $1.77 per share
- Net debt reduced to $66.7 million
- Cash costs of $0.13/lb. for zinc(1) before CMM adjustment, or $0.23/lb.
2005 Production Highlights
- Zinc production up 4,500 tonnes to 115,000 tonnes
- Copper production up 9,000 tonnes to 86,000 tonnes
- Gold production up 23,000 oz. to 102,000 oz.
- Silver production up 296,000 oz. to 1,410,500 oz.
Corporate Highlights
- 76-year safety record at Hudson Bay
- Re-opening Balmat mine in Q2, 2006
- Purchase of White Pine Copper Refinery, Q1, 2006
- Annual $10 million exploration program
HudBay Minerals Inc. (TSX:HBM) ("HudBay") today announced record net
earnings of $85.2 million or $1.04 per share on revenue of $652
million, for the year ended December 31, 2005. This compares to a loss
of $9.9 million on sales of $13.3 million for the year ended December
31, 2004.
"We are delighted with the results being reported today, our first
full year as a publicly traded company," said Peter R. Jones, President
and Chief Executive Officer of HudBay Minerals. "2005 was an excellent
year on all fronts, thanks largely to solid production, good costs and
strong metal prices."
Subsequent to year-end, HudBay announced it had closed the purchase
of White Pine Copper Refinery Inc. (White Pine), a Michigan-based copper
refinery for the previously announced price of US$13 million, subject
to certain adjustments.
(1) Net of by-product credits
In addition, the Company also announced subsequent to year-end that
it had completed a $25 million credit facility with The Bank of Nova
Scotia (Scotia Capital) and that the Bank may consent to increasing the
credit facility to $50 million if HBMS satisfies certain conditions. At
the same time, HudBay also announced that HBMS has repurchased, through
the open market, US$19 million of its 9 5/8% senior secured notes due
January 5, 2012.
Commenting on these announcements, Mr. Jones stated: "The purchase
of White Pine completes our copper vertical integration and provides a
dedicated facility for processing copper anodes, and this will
significantly reduce our operating costs for copper refining. Completing
the $25 million credit facility enhances HudBay's financial strength as
we look toward future growth, and the re-purchase of the secured notes
reduces our net debt to $66.7 million."
For further information, please see attached hereto, HudBay's
management discussion and analysis for the year ended December 31, 2005
and selected financial information for the years ended December 31, 2005
and 2004. A copy of HudBay's consolidated financial statements for the
years ended December 31, 2005 and 2004, as well its MD&A and annual
information form for the year ended December 31, 2005, are available on
SEDAR at
www.sedar.com and on the HudBay website at
www.hudbayminerals.com.
About HudBay Minerals Inc.
HudBay Minerals Inc. is an integrated mining and metal producing
company that operates mines and concentrators in Northern Manitoba and a
metal processing complex in Flin Flon, Manitoba. The company also owns a
zinc oxide production facility in Brampton, Ontario, the White Pine
Copper Refinery in Michigan, and the Balmat zinc mine project in New
York State, which is being re-opened.
Forward Looking Information
Certain information regarding HudBay set forth in this document,
including management's assessment of HudBay's future plans and
operations, contains forward looking statements that involve substantial
known and unknown risks and uncertainties. These forward looking
statements are subject to numerous risks and uncertainties, some of
which are beyond HudBay's and management's control, including but not
limited to, the impact of general economic conditions, industry
conditions, fluctuation of commodity prices, acquisition risks,
fluctuation of foreign exchange rates, imperfection of reserve
estimates, environmental and financing risks, debt and cash
requirements, industry competition and performance or achievement could
differ materially from those expressed in, or implied by, these forward
looking statements and, accordingly, no assurance can be given that any
of the events anticipated to occur or transpire from the forward-looking
statements will provide any benefits.
HUDBAY MINERALS INC.
Consolidated Statements of Earnings (Loss)
(In thousands of Canadian dollars,
except share and per share amounts)
Years ended December 31, 2005 and 2004
---------------------------------------------------------------------
---------------------------------------------------------------------
2005 2004
---------------------------------------------------------------------
Revenue $ 652,028 $ 13,327
---------------------------------------------------------------------
Expenses:
Operating 480,518 14,081
Depreciation and amortization 53,100 1,443
General and administrative 19,620 5,127
Exploration 11,281 1,734
Accretion of asset retirement obligation 2,612 138
Foreign exchange loss 2,338 -
---------------------------------------------------------------------
569,469 22,523
---------------------------------------------------------------------
Operating earnings (loss) 82,559 (9,196)
Interest expense (21,939) (2,320)
Foreign exchange gain on long term debt 6,825 1,562
Realized and unrealized gain on
derivative instruments 5,319 78
Interest and other income 3,996 103
Amortization of deferred financing fees (2,342) (620)
---------------------------------------------------------------------
Earnings (loss) before income taxes 74,418 (10,393)
Tax recovery 10,800 473
---------------------------------------------------------------------
Earnings (loss) for the year $ 85,218 $ (9,920)
---------------------------------------------------------------------
---------------------------------------------------------------------
Earnings (loss) per share:
Basic $ 1.04 $ (1.12)
Diluted 0.70 (1.12)
Weighted average number of common shares
outstanding
Basic 82,008,190 8,894,235
Diluted 121,116,832 8,894,235
---------------------------------------------------------------------
---------------------------------------------------------------------
See the financial statements as filed on SEDAR
HUDBAY MINERALS INC.
Consolidated Balance Sheets
(In thousands of Canadian dollars)
December 31, 2005 and 2004
---------------------------------------------------------------------
---------------------------------------------------------------------
2005 2004
---------------------------------------------------------------------
Assets:
Current assets:
Cash and cash equivalents $ 141,660 $ 64,553
Accounts receivable 44,698 73,210
Inventories 116,596 100,282
Prepaid expenses 3,625 3,496
Current portion of fair value of
derivatives (note 16c) 4,483 3,418
Future income taxes 26,200 12,900
--------------------------------------------------------------------
337,262 257,859
--------------------------------------------------------------------
Property, plant and equipment 378,207 358,662
Other assets 13,284 26,176
---------------------------------------------------------------------
$ 728,753 $ 642,697
---------------------------------------------------------------------
Liabilities and Shareholders' Equity:
Current liabilities:
Accounts payable and accrued liabilities $ 91,930 $ 89,749
Interest payable on long-term debt 8,004 563
Current portion of other liabilities 28,211 20,595
--------------------------------------------------------------------
128,145 110,907
Long-term debt 191,493 223,529
Pension obligation 46,743 57,437
Other employee future benefits 61,250 57,929
Asset retirement obligations 29,219 27,120
Obligations under capital leases 9,011 11,719
Future income tax liabilities 1,666 1,290
---------------------------------------------------------------------
---------------------------------------------------------------------
$ 467,527 $ 489,931
---------------------------------------------------------------------
Shareholders' equity:
Share capital:
Common shares 143,611 120,138
Warrants 28,931 35,850
Contributed surplus 10,015 3,288
Cumulative translation adjustment (63) (24)
Retained earnings (deficit) 78,732 (6,486)
--------------------------------------------------------------------
261,226 152,766
---------------------------------------------------------------------
$ 728,753 $ 642,697
---------------------------------------------------------------------
---------------------------------------------------------------------
See the financial statements as filed on SEDAR
HUDBAY MINERALS INC.
Consolidated Statements of Cash Flows
(In thousands of Canadian dollars)
Years ended December 31, 2005 and 2004
---------------------------------------------------------------------
---------------------------------------------------------------------
2005 2004
---------------------------------------------------------------------
Cash provided by (used in):
Operating activities:
Earnings (loss) for the year $ 85,218 $ (9,920)
Items not affecting cash:
Depreciation and amortization 53,100 1,227
Realization of previously unrecorded
tax losses (11,858) (397)
Unrealized foreign exchange gain (4,012) (2,980)
Amortization of deferred financing costs 2,342 216
Accretion expense on asset retirement
obligation 2,612 73
Stock-based compensation 2,674 1,193
Unrealized portion of change in fair
value of derivative (562) (78)
Other (6,343) 1,165
Change in non-cash working capital 21,691 2,273
--------------------------------------------------------------------
144,862 (7,228)
--------------------------------------------------------------------
Financing activities:
Issuance (repayment) of senior secured
notes (note 8a) (21,953) 214,112
Issuance of common shares, net of costs 20,607 139,484
Repayments of obligations under capital
leases (3,672) (17)
Repayment of loans payable (2,000) -
Deferred financing cost (350) (9,600)
Proceeds of exercise of stock options - 64
Proceeds on exercise of warrants - 117
Decrease in debenture subscription receivable - 2,000
Issuance of convertible debenture - 600
Repayment of convertible debenture - (2,860)
Advance from HBMS prior to acquisition - 540
--------------------------------------------------------------------
(7,368) 344,440
--------------------------------------------------------------------
Investing activities:
Additions to property, plant and equipment (70,924) (5,180)
Decrease (increase) in restricted cash 13,000 (13,000)
Additions (reductions) to environmental
deposits 31 (294)
Sale of investments 463 -
Acquisition of HBMS, net of cash acquired - (255,610)
--------------------------------------------------------------------
(57,430) (274,084)
--------------------------------------------------------------------
Foreign exchange loss on cash held in
foreign currency (2,957) (689)
---------------------------------------------------------------------
Change in cash and cash equivalents 77,107 62,439
Cash and cash equivalents, beginning of year 64,553 2,114
---------------------------------------------------------------------
Cash and cash equivalents, end of year $ 141,660 $ 64,553
---------------------------------------------------------------------
---------------------------------------------------------------------
See the financial statements as filed on SEDAR
To view the Management's Discussion and Analysis please click on the following link:
http://www.ccnmatthews.com/docs/hbmmda3.pdf
FOR FURTHER INFORMATION PLEASE CONTACT:
HudBay Minerals Inc.
Don Bain
Director, Investor Relations
(204) 949-4272
(204) 942-8177 (FAX)
don.bain@hbms.ca
www.hudbayminerals.com