Guidance

Summary:

  • Copper and precious metals production from the Constancia mine in Peru exceeded 2016 guidance and production of all key metals at the Manitoba Business Unit was within 2016 guidance ranges.
  • Production of zinc in concentrate in 2017 is forecast to increase by approximately 25% compared to 2016 production, primarily due to the ongoing ramp-up of the Lalor mine and the re-sequencing of the mine plan at 777 to mine stopes containing higher zinc grades and take advantage of favourable expected zinc prices1 
  • Prodcution of copper and precious metals contained in concentrate in 2017 is forecast to decrease by 17% and 5%, respectively, compared to 2016 production, primarily due to lower copper grades at Constancia, as per the recently released technical report, as well as lower ore production and copper grades at the 777 mine due to the age of the mine and the emphasis on higher value zinc ore production in the new mine plan. 
  • Sustaining capital expenditures are expected to be $185 million in 2017. In addition, growth capital expenditures of $40 million on the Lalor paste backfill plant, $25 million on the development of the high-grade Pampacancha deposit near Constancia and $20 million on the advancement of the Rosemont project are expected in 2017.

  1 The increase in zinc production assumes the mid-point of the 2017 guidance range is achieved. 

Contained Metal in Concentrate1

2017 Guidance

2016 Production

2016 Guidance

Manitoba2

 

 

 

 

Copper

(tonnes)

32,500 – 42,500

41,059

40,000 – 50,000

Zinc

(tonnes)

125,000 – 150,000

110,582

100,000 – 125,000

Precious Metals3

(ounces)

90,000 – 110,000

102,242

95,000 – 115,000

 

 

 

 

 

Peru

 

 

 

Copper

(tonnes)

110,000 – 115,000

133,432

110,000 – 130,000

Precious Metals3

(ounces)

55,000 – 65,000

65,709

50,000 – 65,000

 

 

 

 

 

Total

 

 

 

 

Copper

(tonnes)

132,500 – 157,500

174,491

150,000 – 180,000

Zinc

(tonnes)

125,000 – 150,000

110,582

100,000 – 125,000

Precious Metals3

(ounces)

145,000 – 175,000

167,951

145,000 – 180,000

1 Metal reported in concentrate is prior to refining losses or deductions associated with smelter terms. 
2 Includes 100% of Reed mine production; Hudbay owns a 70% interest in the Reed mine.
3 Precious metals production includes gold and silver production on a gold-equivalent basis. Silver converted to gold at a ratio of 70:1. 

Capital Expenditure Guidance

2017 Capital Expenditure Guidance1

 Millions

 

Sustaining Capital 

 

Manitoba

65

Peru

120

Total Sustaining Capital

185

Growth Capital 

 

Manitoba 

Peru 

Arizona2

40

25

20

Total Growth Capital

85

  

Capitalized Exploration

2

Total Capital Expenditure

272

1 Excludes capitalized interest.
2 Capitalized spending.

2017 Exploration Guidance

Millions

 

Manitoba

4

Peru

2

Arizona

-

Generative and Other

4

Total Exploration Expenditures

10

Capitalized Spending1

(2)

Total Exploration Expense

8

1 Assumes $2 million of Manitoba expenditures will be capitalized.

Production and Unit Cost Guidance by Business Unit

2017 Production and Unit Cost Guidance
By Business Unit
Manitoba Operations
777, Lalor and Reed2
Peru Operations
Constancia
Total
Contained Metal in Concentrate Produced1
Copper (tonnes) 32,500 – 42,500
100,000 – 115,000 132,500 – 157,500
Zinc (tonnes) 125,000 – 150,000
- 125,000 – 150,000
Precious Metals (oz)3 90,000 – 110,000 55,000 – 65,000 145,000 – 175,000
Combined Unit
Operating Costs ($/tonne ore
processed)
4,5
C$88 – 108 US$7.2 – 8.8

1 Metal reported in concentrate is prior to refining losses or deductions associated with smelter terms.
2 Includes 100% of Reed mine production; Hudbay owns a 70% interest in the Reed mine.
3 Precious metals production includes gold and silver production on a gold-equivalent basis. Silver converted to gold at a ratio of 70:1.
4 Reflects combined mine, mill and G&A costs per tonne of milled ore. Peru costs are presented in USD and reflect the deduction of expected capitalized stripping costs. Manitoba costs are presented in CAD and include the cost of ore purchased from the joint venture partner at the Reed mine. 

2017 Production and Unit Cost Guidance

Flin Flon Zinc Plant

Zinc Metal Produced  (tonnes)

95,000 – 115,000

Unit Operating Costs1

C$0.40 - $0.50/lb

1 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.

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