Strong Production Results as Company Still on Track to Meet 2011 Guidance
TORONTO, ONTARIO -- (MARKET WIRE) -- 11/02/11 --
HudBay Minerals Inc. (TSX: HBM)(NYSE: HBM)
Highlights
-- Strong third quarter production and cost results as full year mine
performance still on target
-- Operating cash flow before changes in non-cash working capital(i) grew
to $58.3 million in the third quarter of 2011 from $25.6 million in the
same period last year
-- Lalor development proceeding well with the ventilation shaft now sunk to
the 190 metre level and the planned 3,200 metre access ramp currently
advanced to 2,900 metres
-- Applications submitted for key development permits for the Reed copper
deposit
-- Exploration drilling at Constancia's high-grade Pampacancha deposit
continues to demonstrate the continuity of the deposit. A resource
estimate on Pamapcancha is expected by Q1 2012. Front end engineering
and design well advanced with long lead orders commencing
HudBay Minerals Inc. ("HudBay", the "company") today released its third quarter 2011 financial results. The company reported a net loss of $41.1 million, or $0.23 per share, in the third quarter of 2011, compared to a loss of $0.01 per share in the third quarter of 2010. Operating cash flow before changes in non-cash working capital(i) more than doubled to $58.3 million, or $0.34 per share, in the third quarter of 2011 from $25.6 million, or $0.17 per share, in 2010 mainly as a result of higher sales volumes and higher prices received for copper and gold.
Third quarter 2011 profit under IFRS was negatively affected by a number
of non-cash, unusual charges, all of which are presented after-tax:
Impairment on the company's investment in
Zochem Inc. $5.0 million ($0.03 per share)
Impairments on available-for-sale investments $2.2 million ($0.01 per share)
Impairments on zinc inventory $2.9 million ($0.02 per share)
Foreign currency translation and other loss $22.5 million ($0.13 per
on disposal of Fenix share)
Impact on deferred taxes of changes to $19.0 million ($0.11 per
Peruvian tax law share)
Impact on deferred taxes of change in
discount rates on decommissioning and
restoration liabilities $7.9 million ($0.05 per share)
"Our operating mines delivered very strong performance during the third quarter of 2011. With the transportation bottleneck in Manitoba resolved, our sales volumes have increased significantly, resulting in strong cash flows," said David Garofalo,
HudBay's president and chief executive officer. "We also continue to
execute well on our production growth objectives as Lalor advances to
first production by the middle of 2012 and Constancia project
engineering, optimization and exploration are expected to lead to a
formal project decision by the first quarter of 2012. In addition, the
submission of permit applications for the Reed copper deposit and
continued pre-feasibility work on Back Forty give HudBay incremental
growth opportunities."
Strong Revenue Growth Due to Higher Metals Prices and Sales Volumes
Revenues increased to $212.3 million in the third quarter of 2011 compared to $167.8 million
in 2010. Revenue growth was driven by higher metal prices and sales
volumes. Increased availability of railcars helped to substantially
eliminate the stockpile of copper concentrate in Flin Flon
that had previously accumulated. HudBay continues to expect copper
concentrate sales to exceed production in the fourth quarter of 2011,
resulting in the sale of most of the remaining excess inventory.
Due to the extraction of higher-value copper ore, copper and gold grades
at 777 are anticipated to be higher than 2011 guidance, whereas 777
zinc grades are expected to be lower than 2011 guidance. The reduced 777
zinc grades are expected to be partially offset by higher zinc grades
from Trout Lake, which are expected to average 3.4% for 2011 compared to previous guidance of 2.8%.
Co-product costs per unit sold in the third quarter of 2011 were $1.63 per pound of copper, $500 per ounce of gold and $0.94
per pound of zinc.(i) For the first nine months of 2011, co-product
costs of copper decreased compared to the same period in 2010 mainly as a
result of higher by-product credits from the sale of miscellaneous
copper bearing material, while zinc co-product costs increased mainly as
a result of reduced zinc oxide and other by-product credits.
HudBay continued to achieve good cost control at its operations, with operating costs per tonne at the 777 mine, the Flin Flon
concentrator and zinc plant all expected to remain within the range of
guidance for 2011 as set forth in HudBay's press release dated December 13, 2010. Mining operating costs at the Trout Lake mine remain above comparable 2010 levels due to additional expensed development work associated with extending mine life. Trout Lake's mine life is now expected to be extended to June 2012 from early 2012 as previously projected.
Strong Cash Flow Generation
Operating cash flow before changes in non-cash working capital(i) increased to $58.3 million, or $0.34 per share, in the third quarter of 2011 from $25.6 million, or $0.17
per share, in 2010 mainly as a result of higher sales volumes and
higher prices received for copper and gold. Capital expenditures
increased to $69.2 million due to the acceleration of
construction at Lalor and commencement of pre-construction activities at
Constancia, offset in part by reduced sustaining capital expenditures.
Cash and cash equivalents increased to $871.1 million at September 30, 2011 from $747.7 million at June 30, 2011.
The increase in cash and cash equivalents during the third quarter 2011
was due mainly to proceeds realized on the sale of the Fenix project of
US $140 million and operating cash flow of $78.5 million, only partly offset by capital investments of $69.2 million, strategic investments of $8.7 million and payment of dividends of $17.2 million.
Together with our unused credit lines, HudBay has available liquidity of approximately $1.1 billion
and no debt. While the company believes that the Lalor and Constancia
projects can be 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.
Lalor Development and Site Construction Proceeding Well;
Ramp Nearing Completion and First Underground Drilling Expected in Q1 2012
The Lalor project has now gone over 693 days without a lost time
accident. The company continues to make significant progress on the
planned 3,200 metre access ramp at the Lalor project, having advanced
close to 2,900 metres since the start of the project in December 2009.
By the fourth quarter of 2011, the ramp is intended to extend to the
810 metre base of the ventilation shaft, which is now approximately 23%
complete. By early 2012, diamond drilling from underground will commence
for the first time at Lalor. Initial drilling will focus on delineating
the first ore production and finalizing infrastructure development.
Initial ore production up the ventilation shaft is expected by the
middle of 2012.
Construction is progressing well on the main site with the water
treatment plant building completed and electrical and mechanical
installation ongoing. The main shaft collar presink has been completed
and the sinking galloway for the main shaft sinking was put in place
mid-October. The bin house steel, waste bunker and the hoist house are
well advanced. Work over the next few months will be focused on the
headframe steel erection and cladding. Detailed engineering around the
design of the new concentrator is underway with procurement expected to
commence early in 2012.
Two drills continued to operate near the Lalor project testing
geophysical targets. These drills will continue to operate for the
remainder of the year. The targets being tested are peripheral to the
Lalor deposit and are part of a program exploring for new zones of
mineralization.
Exploration Drilling Continues at the Constancia Project;
Hole PO-11-086 intercepted 49 metres with 1.83% copper and 0.95 g/t gold at
Pampacancha
Two exploration drilling rigs continued at Pampacancha, south of
previously reported Hole PO-11-072, which intersected two main intervals
of mineralization, including 121.45 metres of 1.62% copper, 13.62 g/t
silver and 1.02 g/t gold and 87.50 metres of 0.46% copper, 2.30 g/t
silver and 0.22 g/t gold. Assays from Hole PO-11-086 intercepted 49
metres with 1.83% copper and 0.95 g/t gold, which demonstrates the
continuity of high grade copper and gold mineralization in the
Pampacancha deposit. HudBay expects to announce a NI 43-101 mineral
resource estimate at Pampacancha in early 2012.
In June and July of 2011 a Titan 24 IP/DC/MT survey was completed over
the Constancia property on eight reconnaissance lines for a total of
38.4 kilometres. The survey was designed to test the response from
Constancia to create a target template to be used elsewhere in the
region. HudBay also used this system to test the limits of the company's
geophysical knowledge beyond the depth of investigation as the previous
conventional survey methods were somewhat limited. Several targets have
been identified near surface and at depth at the Chilloroya and
Pampacancha prospects including one near Constancia. These targets are
currently in the interpretation/planning stages. Drill testing of these
targets will begin in 2012.
For additional detail on Pampacancha and the Constancia project generally, please refer to NI 43-101 technical report filed by HudBay Peru Inc. (formerly Norsemont Mining Inc.) entitled "Norsemont Mining Constancia Project Technical Report 21 February 2011", available at www.sedar.com and the company's press release dated June 14, 2011 entitled "HudBay Minerals Intersects 2.4% Copper Equivalent Over 120 Meters at Constancia's Pampacancha Deposit."
HudBay's previously announced $116 million
pre-construction program for Constancia is progressing well. The program
contemplates early equipment procurement for long lead items, a
resource model update, metallurgical review, pit optimization study,
geotechnical and condemnation drilling. Front End Engineering and Design
are well advanced and orders for the grinding mills and other long-lead
time items are expected to be completed during the fourth quarter. The
new resource model on the main pit is also being incorporated into the
new project economic model, which will form the basis of the formal
project commitment recommendation to our Board of Directors, expected in
the first quarter of 2012.
Reed Copper Deposit;
Permit Applications Submitted in Q3 2011
Pursuant to a joint venture with VMS Ventures Inc.
("VMS"), HudBay has a 70% interest in the Reed copper deposit, 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.
Applications for key development permits for the Reed copper deposit were submitted to the Manitoba
government in the third quarter. Approval of these permits could allow
for early site development. A preliminary economic assessment study is
expected to be completed in the fourth quarter.
Two exploration drills have been operating within three kilometres of
the Reed copper deposit targeting regional geophysical anomalies. The
drills also followed up on the intersection in Hole RLE006, which
intersected 7.18 metres of 7.44% copper. These results included 3.95
metres of 9.31% copper, 1.87% zinc, 3.59 g/t gold and 35.53 g/t silver
from Hole RLE021 and 4.15 metres of 2.16% copper, 0.18% zinc, 0.71 g/t
gold and 8.01 g/t silver from Hole RLE022. Drilling will be shut down
during October but will resume drilling once winter conditions allow
access to the area.
Key Financial Results
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Three Months Ended Nine Months Ended
($000s except per share amounts) September 30 September 30
-------------------------------------------
2011 2010 2011 2010
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Revenue 212,335 167,778 636,503 596,425
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Profit before tax 37,473 22,416 139,212 82,075
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(Loss) profit from continuing
operations (16,052) 7,376 40,910 26,721
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Basic and diluted (loss) earnings
per share(1) (0.23) (0.01) (1.14) 0.09
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(Loss) profit for the period (41,083) (1,743) (197,874) 13,149
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Operating cash flow(2,3) 58,316 25,597 168,119 136,387
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Operating cash flow per
share(2,3) 0.34 0.17 1.01 0.90
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Cash and cash equivalents 871,089 851,739 871,089 851,739
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Total assets 2,402,766 2,009,348 2,402,766 2,009,348
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(1) Attributable to owners of the Company
(2) Refer to "Non-IFRS measures" at the conclusion of this press release.
(3) Before changes in non-cash working capital.
Results for the third quarters of 2011 and 2010 have been presented in
accordance with International Financial Reporting Standards ("IFRS").
Compared to results for the third quarter of 2010 previously reported
under Canadian generally accepted accounting standards ("CGAAP"), IFRS
profit for the third quarter of 2010 includes additional exploration
expenses of $12.7 million related mainly to the Lalor
project. Other differences between CGAAP and IFRS and their impact on
the company's financial results are described in HudBay's interim
financial statements for the third quarter of 2011.
During the third quarter of 2011, HudBay recognized $2.5 million ($2.2 million after-tax) in impairment losses related to available-for-sale investments and $5.4 million ($2.9 million after-tax) in impairments in the carrying value of HudBay's zinc inventory as a result of lower market prices.
On September 9, 2011, HudBay completed the sale of 100% of the company's interest in the Fenix ferro-nickel project in Guatemala, which has been presented as a discontinued operation. Upon completion of the sale, HudBay recognized a loss on disposal of $22.5 million,
including accumulated foreign exchange losses transferred from the
foreign currency translation reserve within equity to the income
statement. HudBay has also disposed of its Zochem Inc. subsidiary for cash proceeds of approximately US$15 million and recognized an impairment loss of $5.9 million ($5.0 million after-tax) as a result.
In addition, a significant decline in long-term Canadian risk-free
interest rates during the third quarter of 2011 resulted in an increase
in the present value estimate of the company's decommissioning and
restoration liabilities and required the recognition of a corresponding
deferred tax expense of $7.9 million. $19.0 million in deferred tax expense was also recorded as a result of changes to Peruvian mining tax laws during the third quarter.
For additional information on HudBay's third quarter 2011 financial
results, please refer to the Third Quarter 2011 Supplemental Disclosure
document at http://media3.marketwire.com/docs/2011Q3SUPPHBM.pdf.
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 HudBay uses
internally to monitor performance. The company uses these measures to
assess how well it is performing compared to plan and to assess the
overall effectiveness and efficiency of mining, processing and refining
operations. HudBay believes 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
the company's 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 calculations of cash flows for the three and nine months ended September 30, 2011 and September 30, 2010.
----------------------------------------------------------------------------
Three Months Ended Nine Months Ended
----------------------------------------------------
($000s except share and Sep. 30 Sep. 30 Sep. 30 Sep. 30
per share amounts) 2011 2010 2011 2010
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Cash generated by
operating activities,
per financial
statements 78,460 18,888 153,116 154,627
Adjustments:
Changes in non-cash
working capital (23,076) 12,061 (20,701) (5,252)
Changes in non-cash
tax receivable 3,930 64 11,498 (15,249)
Changes in non-cash
tax payable (998) (5,416) 24,206 2,261
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Operating cash flow
before changes in non-
cash working capital 58,316 25,597 168,119 136,387
Weighted average shares
outstanding 171,905,912 148,949,050 166,490,423 151,114,563
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Operating cash flow per
share $0.34 $0.17 $1.01 $0.90
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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 and other adjustments).
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 and other adjustments), 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.
Cash cost per pound of zinc sold
HudBay's cash cost per pound of zinc sold, net of by-product credits, for the third quarter of 2011 was negative US$0.66 per pound, representing costs associated with HBMS operations, as calculated in the following table:
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Three Months Ended Nine Months Ended
-------------------------- --------------------------
September 30 September 30 September 30 September 30
($000s except as noted) 2011 2010 2011 2010
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Other cost of sales 120,790 88,156 341,725 341,921
Impairment loss 5,878 - 5,878 -
Selling and other
operating expense 1,278 2,708 4,318 4,845
-----------------------------------------------------
127,946 90,864 351,921 346,766
Less by-product
credits(1) (161,488) (106,930) (468,338) (415,635)
-----------------------------------------------------
Cash cost net of by-
products (33,542) (16,066) (116,417) (68,869)
Exchange rate (US $1 to
C$)(2) 0.980 1.039 0.978 1.036
-----------------------------------------------------
Cash cost net of by-
products US (34,227) US (15,463) US (119,036) US (66,476)
Zinc sales (000's lbs.) 52,000 56,654 163,023 171,389
-----------------------------------------------------
Cash cost per pound of
zinc sold, net of by-
product credits in US
$/lb. US (0.66) US (0.27) US (0.73) US (0.39)
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(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
In the third quarter of 2010, HudBay introduced co-product cash costs as
a new non-IFRS measure. The company believes these costs serve as
meaningful indicators for investors to evaluate HudBay's operations.
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
HudBay's Trout Lake
and 777 mines are allocated proportionately based on the value of the
contained metals at prevailing metals prices. Operating overhead
expenses and site administrative expenses (in both cases, excluding
costs not related to HudBay's HBMS operations) are generally allocated
equally between zinc and copper with some further cost allocation to
gold. Impairment charges on zinc inventory in a
period are deducted from cost of sales in order to better match costs as
they are incurred with sales; the deducted charges will be added back
to cost of sales in future periods when the inventory in question is
sold.
In order to present a cost per finished unit sold, the company also adds
to these costs third party treatment and refining costs, which are
deducted from revenue in HudBay's financial statements.
HudBay treats zinc oxide production as a by-product of zinc production,
so the costs of the Zochem operation are allocated to zinc operating
expenses, and zinc oxide revenues are deducted from total zinc cash
costs. Similarly, HudBay treats silver production as a by-product of
gold production. Copper by-products include the one-time sale of copper
bearing material from the closure of the WPCR. Other miscellaneous
revenues are allocated among zinc, copper and gold in the same manner as
general and administrative costs unless specific to either the zinc or
copper processing.
While HudBay expects the impact of fluctuating metals prices to be less
significant on co-product cash costs than it is on by-product cash
costs, changes in relative metals prices may cause 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 the
company's polymetallic mines is dependent on the production of all of
its principal metals.
Three Months Ended September 30, 2011
----------------------------------------------------------------------------
($000s except as noted) Copper Zinc Gold Total
----------------------------------------------------------------------------
Other cost of sales 48,645 57,496 14,649 120,790
Impairment loss on zinc
inventory - (5,351) - (5,351)
Treatment and refining costs(1) 7,398 - 2,190 9,588
--------------------------------------------
56,043 52,145 16,839 125,027
Zinc oxide and by-product
revenues (1,457) (3,367) (6,000) (10,824)
--------------------------------------------
Co-product costs 54,586 48,778 10,839 114,203
Sales volume(2) 33,556 52,002 21,663
---------------------------------
Co-product cash costs per
unit(2) sold $1.63 $0.94 $500
----------------------------------------------------------------------------
(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.
Nine Months Ended September 30, 2011
----------------------------------------------------------------------------
($000s except as noted) Copper Zinc Gold Total
----------------------------------------------------------------------------
Other cost of sales 120,651 186,284 34,790 341,725
Impairment loss on zinc
inventory (5,351) (5,351)
Treatment and refining costs(1) 19,426 - 5,817 25,243
--------------------------------------------
140,077 180,933 40,607 361,617
Zinc oxide and by-product
revenues (19,531) (20,928) (19,076) (59,535)
--------------------------------------------
Co-product costs 120,546 160,005 21,531 302,082
Sales volume(2) 86,036 163,024 62,245
---------------------------------
Co-product cash costs per
unit(2) sold $1.40 $0.98 $346
----------------------------------------------------------------------------
(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.
Three Months Ended September 30, 2010
----------------------------------------------------------------------------
($000s except as noted) Copper Zinc Gold Total
----------------------------------------------------------------------------
Other cost of sales 23,810 56,389 7,957 88,156
Treatment and refining costs(1) 3,681 - 920 4,601
--------------------------------------------
27,491 56,389 8,877 92,757
Zinc oxide and by-product
revenues (641) (9,302) (3,362) (13,305)
--------------------------------------------
Co-product costs 26,850 47,087 5,515 79,452
Sales volume(2) 20,104 56,655 17,085
---------------------------------
Co-product cash costs per
unit(2) sold $1.34 $0.83 $323
----------------------------------------------------------------------------
(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.
Nine Months Ended September 30, 2010
----------------------------------------------------------------------------
($000s except as noted) Copper Zinc Gold Total
----------------------------------------------------------------------------
Other cost of sales 119,966 180,467 41,488 341,921
Treatment and refining costs(1) 6,305 - 920 7,225
--------------------------------------------
126,271 180,467 42,408 349,146
Zinc oxide and by-product
revenues (2,647) (28,627) (17,334) (48,608)
--------------------------------------------
Co-product costs 123,624 151,840 25,074 300,538
Sales volume(2) 85,119 171,391 65,702
---------------------------------
Co-product cash costs per
unit(2) sold $1.45 $0.89 $382
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(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.
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 three and nine months ended September 30, 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/2011MDAQ3HBM.pdf
Financial Statements:
http://media3.marketwire.com/docs/2011FSQ3HBM.pdf
Third Quarter 2011 Supplemental Disclosure
http://media3.marketwire.com/docs/2011Q3SUPPHBM.pdf
Conference Call and Webcast
Date: Thursday, November 3, 2011
Time: 10 a.m. ET
Webcast: http://www.hudbayminerals.com/
Dial in: 416-644-3414 or 800-814-4859
Replay: 416-640-1917 or 877-289-8525
Replay Passcode: 4478548#
The conference call replay will be available until midnight (Eastern Time) on November 17, 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 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.
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 its key 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).
(i) Refer to "Non-IFRS Measures" at the conclusion of this press release
(HBM-F)
Contacts:
HudBay Minerals Inc.
John Vincic
Vice President, Investor Relations
and Corporate Communications
(416) 362 0615
john.vincic@hudbayminerals.com
Source: HudBay Minerals Inc.
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