Summary:

• On a consolidated basis, Hudbay’s copper production exceeded 2017 guidance and production of zinc and precious metals were within 2017 guidance ranges.

• Production results were achieved with strong safety performance, including zero lost time accidents at the Constancia mine in 2017.

• Three-year collective bargaining agreements have been entered into with Hudbay’s unionized workforces at each of its Manitoba and Peru operations, providing labour stability.

• Production of copper contained in concentrate in 2018 is forecast to decrease by approximately 15% compared to 2017 production, as the Constancia mine shifts to the lower-grade hypogene ore in the main pit, in line with the mine plan, and the Reed mine closes.

• Production of zinc contained in concentrate in 2018 is forecast to decrease by approximately 13% compared to 2017 production, as zinc grades at Lalor and 777 are lower, in line with the respective mine plans.

• Production of precious metals contained in concentrate in 2018 is forecast to increase by approximately 31% compared to 2017 production, primarily due to a planned increase in precious metals production from the Lalor mine in Manitoba and the expected start of mining at the Pampacancha deposit in Peru.

• Exploration budget of $50 million, focused on exploration near existing processing infrastructure in Manitoba and Peru, as well as grassroots exploration properties in Chile and British Columbia.

• Sustaining capital expenditures are expected to be $135 million, a decrease of approximately 27% from the previous year, as a major raise of the Constancia tailings management facility was successfully completed in 2017. 

. 

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 As updated in Hudbay's press release dated May 2, 2018. 

Capital Expenditure Guidance

¹ Excludes capitalized interest.
² Includes capitalized stripping costs.
³ Capitalized spending.
⁴ As disclosed in Hudbay’s press release dated May 2, 2018, the majority of Peru’s growth capital is expected to be incurred in 2019 as a result of the anticipated delay in the mining of the Pampacancha deposit.

Production and Unit Cost Guidance by Business Unit

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.
⁵ As updated in Hudbay's press release dated July 31, 2018.
⁶ As updated in Hudbay's press release dated May 2, 2018.

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.