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Second Quarter 2010 ResultsAugust 5, 2010
Strength to Build the Future
2 June 2010
Forward Looking InformationThis presentation contains "forward-looking information" within the meaning of applicable securities laws. Forward-looking information includes but is not limited to information concerning the company’s ability to develop its Lalor project and 777 North expansion, the ability to maintain a regular dividend on its common shares and the ability to obtain a listing on the New York Stock Exchange, the ability of management to execute on key strategic and operational objectives, the ability to meet production forecasts, the potential impact of changing economic conditions on HudBay’s financial results and the company’s strategies and future prospects. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects", or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", “understands” or "does not anticipate", or "believes" or variations of such words and phrases or statements that certain actions, events or results “will”, "may", "could", "would", "might", or "will be taken", "occur", or "be achieved". Forward-looking information is based on the views, opinions, intentions and estimates of management at the date the information is made, and is based on a number of assumptions and subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated or projected in the forward-looking information (including the actions of other parties who have agreed to do certain things and the approval of certain regulatory bodies).
Many of these assumptions are based on factors and events that are not within the control of HudBay and there is no assurance they will prove to be correct. Factors that could cause actual results or events to vary materially from results or events anticipated by such forward-looking information include the ability to develop and operate the Lalor project on an economic basis, geological and technical conditions at Lalor differing from areas successfully mined by Lalor in the past, the ability to meet required solvency tests to support a dividend payment, and in accordance with anticipated timelines, risks associated with the mining industry such as economic factors (including costs of construction materials, future commodity prices, currency fluctuations and energy prices), failure of plant, equipment, processes and transportation services to operate as anticipated, including new and upgraded facilities at Lalor, dependence on key personnel, employee relations and availability of equipment and skilled personnel, environmental risks, government regulation, actual results of current exploration activities, possible variations in ore grade, dilution 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 in the company’s Annual Information Form dated March 30, 2010, which risks may cause actual results to differ materially from any forward-looking statement.
Although HudBay has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be anticipated, estimated or intended. 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. HudBay undertakes no obligation to update forward-looking information if circumstances or management's estimates or opinions should change 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. The reader is cautioned not to place undue reliance on forward-looking information.
3 June 2010
Forward Looking InformationLalor Project
HudBay's production decision with respect to Lalor was not based on the results of a pre-feasibility study or feasibility study of mineral resources demonstrating economic or technical viability, because significant portions of the deposit are not able to be classified as a mineral reserve until they can be accessed from underground for additional drilling. Because of this, the production decision was based on mineral resources identified to date and estimates of potential grades and quantities of the gold zone and copper-gold zone, along with other available information, including cost estimates and portions of the engineering design, which have been completed to a level suitable for inclusion in a feasibility study.
The preliminary assessment respecting HudBay’s Lalor project is preliminary in nature, includes inferred mineral resources and potential grades and quantities of minerals that are considered too speculative geologically to have the economic considerations applied that would enable them to be classified as mineral reserves and there is no certainty that the preliminary assessment will be realized. Among the risks associated with the decision to commence production at Lalor is the possibility that the gold zone will not be economically or technically viable, construction timetables, cost estimates and production forecasts may not be realized.
Qualified Person
The Lalor mineral resource and conceptual estimates were prepared by Brian Hartman, M.Sc. P.Geo., HBMS geologist under the direct supervision of Robert Carter, B.Sc. P. Eng., HBMS superintendent, mines and technical services. Mr. Carter is a qualified person within the meaning of NI 43-101, and has reviewed and approved the scientific and technical information referred to in this presentation.
4 June 2010
Investment Highlights
• Operational Excellence
• Cash costs of negative US$0.49 per pound of zinc sold in Q2 2010
• 1,400 employees with an average of 23 years of service
• ISO14001 and OHSAS 18001 certified for environment, health and safety
• 155 million tonnes from 26 mines discovered over 80 years in Northern Manitoba
• Financial Strength
• Nearly $1 billion in cash and no debt
• Lalor and regional growth opportunities fully financed
5 June 2010
Investment Highlights• Growth Potential
• Lalor go ahead expected to nearly double annual gold production
• Emerging "mid-tier level" gold production and undervalued resources
• Reed Lake and other prospects provide potential growth in Northern Manitoba
• One of the largest exploration budgets in Company's history of $42 million in 2010
• Management Strengthened to Pursue New Opportunities
• SVP Corporate Development hired
• Chief Operating Officer and SVP Business Development appointed
• NYSE Listing and Inaugural Dividend
• Diversifying shareholder base to improve valuation
• Dividend reinforces capital allocation discipline
6 Second Quarter 2010 Results
Strong Financial ResultsStrong Financial Results
2010 2009 2010 2009
Three months endedJune 30
Six months endedJune 30
Revenue
Net earnings
EBITDA1,2
Operating Cash Flow1,3
Earnings per share
($000s except per share amounts)
1EBITDA and operating cash flow before changes in non-cash working capital are considered non-GAAP measures. See "Non-GAAP Performance Measures" in our Management's Discussion and Analysis for the quarter ending June 30, 2010.
2EBITDA represents earnings before interest expense, taxes, depreciation and amortization, gain/loss on derivative instruments, exploration and interest and other income.3Before changes in non-cash working capital.
191,851
13,273
69,707
41,027
0.09
197,657
89,415
28,598
28,865
0.58
432,171
36,832
153,151
100,098
0.24
359,441
85,457
44,091
42,837
0.56
7 Second Quarter 2010 Results
Operating Highlights - Production
Zinc tonnes
Copper tonnes
Gold troy oz.
Silver troy oz.
Cash Costs per pound of zinc sold2
2010 2009 2010 2009
Three months endedJune 30
Six months endedJune 30
Production (contained metal in concentrate)1
24,961
12,123
21,002
235,106
US($0.49)
16,867
11,036
22,610
210,236
US($0.05)
40,103
23,840
41,012
428,091
US($0.37)
36,757
23,895
43,968
457,652
US$0.14
1Metal reported in concentrate is prior to refining loses or deductions associated with smelter terms2Cash cost per pound of zinc sold is considered a non-GAAP measures. See "Non-GAAP Performance Measures" in our Management's Discussion and Analysis for the quarter ending June 30, 2010.
2010 Guidance
75-90,000
45-55,000
85-100,000
800-900,000
8 Second Quarter 2010 Results
Strong Financial Position
148.9 millionShares Outstanding
0Long Term Debt
At June 30, 2010
Cash Position $911.8 million
Working Capital $923.6 million
Annualized Dividend Yield 1.80%
SELF-FUNDING FOR THE LALOR PROJECTAND FLEXIBILITY TO PURSUE OTHER GROWTH OPPORTUNITIES
9 Second Quarter 2010 Results
Steady Q2 Results as Expected
• Production remains on track for all metals to meet 2010 guidance
• Very strong zinc and other contained metal production in Q2 2010
• Strong grades reflect areas mined
• Zinc plant constraints and rail car shortages in Q2 2010 expected to
be made up for in balance of 2010
• Excellent cost control
• Successful closure of copper smelter
10 Second Quarter 2010 Results
North and Central America Locations
Snow Lake Chisel North MineConcentratorLalor Project
Flin Flon777 & Trout Lake MinesConcentratorZinc Plant Toronto
Head OfficeZinc Oxide Plant
MichiganBack Forty Deposit
GuatemalaFenix Project
11 Second Quarter 2010 Results
Amisk
Lake
Amisk
Lake
Reed
Lake
Reed
Lake
NN
25 km25 km
Flin FlonFlin Flon
Snow LakeSnow Lake
Flin Flon Greenstone BeltFlin Flon Greenstone Belt
Hwy #39Hwy #39
Hwy #10Hwy #10
777 Mine777 Mine
Trout Lake MineTrout Lake Mine
Chisel North MineFlin FlonOre Concentrator
Zinc plant
Snow Lake Ore Concentrator
Lalor Deposit
Lalor Deposit
Reed Lake Deposit
Reed Lake Deposit
Cold Lake/Lost Lake Deposits
Cold Lake/Lost Lake Deposits
12 Second Quarter 2010 Results
Manitoba Mines
777: Flagship Mine
• 2020
• $33.42
• 9,400 tonnes
• 16,300 tonnes
• 20,000 ounces
1 Contained metal in concentrate
Life of mine
Q2 mining Cost/tonne ore
Q2 Production1:
• Copper
• Zinc
• Gold equivalent
Trout Lake
• 2012
• $61.70
• 2,900 tonnes
• 3,800 tonnes
• 4,900 ounces
Chisel North
• 2012
• $56.51
• -
• 4,800 tonnes
• -
13 Second Quarter 2010 Results
Full Commitment to Lalor Development (100% Owned)
• Accelerated $560 million construction program with first
production in second quarter of 2012
• Growth of over 50% in expected annual zinc production
• Expected to nearly double annual gold production
• Exploration upside at Lalor remains significant
• Aggressive exploration program is ongoing
14 Second Quarter 2010 Results
3D View of Potential Au, Cu-Au, and Zn Rich Mineral Resource Zones
Looking 310°AzimuthOne drill completing hole testing down
plunge extension of Zone 10
Zone 10Wireframe Base
Metal Zones
10
11
20
30
31
40
Wireframe Gold
Zones
21
24
25
26
27
metres
0 100 200
Wireframe Base
Metal Zones
10
11
20
30
31
40
Wireframe Gold
Zones
21
24
25
26
27
Wireframe Base
Metal Zones
10
11
20
30
31
40
Wireframe Gold
Zones
21
24
25
26
27
Wireframe Base
Metal Zones
10
11
20
30
31
40
Wireframe Gold
Zones
21
24
25
26
27
Wireframe Gold
Zones
21
24
25
26
27
metres
0 100 200
metres
0 100 200
15 Second Quarter 2010 Results
Ramp
Development
20102010 20112011 2012201220092009 20132013 20142014 20152015
Q3Q3 Q4Q4Q2Q2Q3Q3 Q1Q1Q4Q4 Q3Q3 Q4Q4Q2Q2Q1Q1 Q3Q3 Q4Q4Q2Q2Q1Q1 Q3Q3 Q4Q4Q2Q2Q1Q1 Q3Q3 Q4Q4Q2Q2Q1Q1 Q3Q3Q2Q2Q1Q1
Lalor Mine Development
Shaft Development
Construction of ramp Initial production via ramp
Shaft construction Fullproduction via shaft
16 Second Quarter 2010 Results
Strong Projected Zinc Growth1
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
200,000
2010 2011 2012 2013 2014 2015 2016
Zin
c P
ayab
le M
ine P
rod
ucti
on
(to
nn
es)
1Includes forecast production from existing mines together with Lalor and the 777 North expansion
50%
17 Second Quarter 2010 Results
Strong Projected Precious Metals Growth2
0
50,000
100,000
150,000
200,000
250,000
2010 2011 2012 2013 2014 2015 2016
Payab
le G
old
Eq
uiv
ale
nt
Pro
du
cti
on
(O
un
ces)
1Includes forecast production from existing mines together with Lalor and the 777 North expansion
2Silver converted to gold equivalent at 60:1 ratio
Includes existing mines, Lalor (including from inferred resources and conceptual gold and
gold-copper zones) and 65% of Back Forty project
Nearly 100%
18 Second Quarter 2010 Results
2009 Gold Equivalent Production
0
50
100
150
200
250
300
350
400
450
500
Min
efin
ders
HudB
ay 2
009
Jagu
ar M
inin
g
Auriz
on M
ines
Ala
mos
Gold
HudB
ay 2
016E
Gam
mon
Gold
Semaf
o
Gol
den S
tar R
esour
ces
Th
ou
sa
nd
Ou
nc
es
1
1Includes forecast production from existing mines together with Lalor (including from inferred
resources and conceptual gold and gold-copper zones) and the 777 North expansion
19 Second Quarter 2010 Results
HudBay Gold Inventory
Reserves
Measured & Indicated Resources
Inferred Resources
Conceptual Estimates
Au (g/t)
14,546,900
21,800,000
12,892,100
6,900,000 –
8,300,000
Tonnes
2.01
1.81
2.92
4.69 –
5.60
Ag (g/t)
27.47
27.14
29.77
21.7 –
25.57
1,153,744
1,331,636
1,368,623
1,120,000 –
1,600,000
Contained Au Equivalent (oz)
- Silver converted to gold equivalent at 60:1 ratio
- Includes existing mines, Lalor and 65% of Back Forty project
20 Second Quarter 2010 Results
Amisk
Lake
Amisk
Lake
Reed
Lake
Reed
Lake
NN
25 km25 km
Flin FlonFlin Flon
Snow LakeSnow Lake
Flin Flon Greenstone BeltFlin Flon Greenstone Belt
Hwy #39Hwy #39
Hwy #10Hwy #10
777 Mine777 Mine
Trout Lake MineTrout Lake Mine
Chisel North MineFlin FlonOre Concentrator
Zinc plant
Snow Lake Ore Concentrator
LalorDeposit
LalorDeposit
Reed Lake Deposit
Reed Lake Deposit
Cold Lake/Lost Lake Deposits
Cold Lake/Lost Lake Deposits
21 Second Quarter 2010 Results
Leveraging Opportunities in the Greenstone Belt
• Initiating development of 777 North (100% owned)
• $20 million approved by Board
• Drilling at Reed Lake to advance to development stage
• Ongoing exploration on Halo’s Lost and Cold Properties
OPTIMIZING NORTHERN MANITOBA
22 Second Quarter 2010 Results
• Acquired right to earn a 65% interest in Aquila Resources' Back Forty Project in Aug. 2009
• Advanced exploration-stage VMS zinc-gold deposit in Michigan
• 8.5 million tonnes measured and indicated NI 43-101 resource
• Strategic fit and can provide concentrate to Flin Flon operations
The Back Forty Project – Overview
Back Forty Deposit(NW of Stephenson, MI)Back Forty Deposit(NW of Stephenson, MI)
23 Second Quarter 2010 Results
Progress at The Back Forty Project (65% owned)
• Updated NI 43-101 mineral resource estimate expected
by year end 2010
• Mine permit application to State of Michigan expected
in Q4 2011
• New exploration program in project area
• Outlining the potential expansion of the known resource at depth
• Testing the on-strike potential of the resource
• Testing new targets generated from airborne and ground geophysical
surveys
CURRENT EXCELLENT DRILLING
EXPECTED TO LEAD TO UPGRADED RESOURCE
24 Second Quarter 2010 Results
Growing Internationally: The Fenix Nickel Deposit
• Brownfield mine and pyrometallurgical facility
• Proven process technology operated for three years
• 36.2 million tonnes of saprolite resources at 1.92% Ni, up 18% from previous estimate
• ~50 million pounds of potential nickel production per year
• Multi-decade mine life with upside potential
FenixFenix
25 Second Quarter 2010 Results
Advancing the Fenix Project
• Low technical risk, good logistics, potential for very long mine life
• Seeking to mitigate social, financial and political risks
• Pursue strategic partner and JV opportunities
• Seek limited recourse project financing
• Update feasibility study by year end 2010 results
• Drilled 7,000 meters to date; approved exploration program to drill
additional 5,000 meters
26 Second Quarter 2010 Results
Focused Acquisition Strategy
• Expanded management capacity to consider development
stage opportunities
• Focus on the Americas but will consider other mining
favourable jurisdictions
• Seeking VMS or porphyry deposits
• Target transaction size of between 10 – 20% of market cap
• Strategic partnerships to leverage grassroots exploration
27 Second Quarter 2010 ResultsTargeting 115,000 meters of drill core in 2010
Flin Flon Greenstone Belt
• Outstanding record of success • Developed 26 mines over past 83 years• Land package totaling > 400,000 hectares
$20 million
Lalor
• Devoted to further exploration$8 million
Mines in Manitoba & outside the Province
• Invested in brownfield exploration• Exploration at existing mines
$14 million
28 Second Quarter 2010 Results
Historical Context
The mineral resource estimate for Lalor is made up of 13.3 million tonnes of indicated resources and 10.2 million tonnes of inferred mineral resources, not including 6.9 – 8.3 million tonnes of conceptual estimates.
Initial resource
Added resource
0 5 10 15 20 25 30
62.5⁄⁄
Tonnes (millions)
Growth of mineral deposits: Discoveries in the Greenstone Belt
MandyNorth StarBirch Lake
FlexarCuprus
Ghost & LostPhoto
RodDickstone
White LakeCoronation
Chisel PitWestarm
CentennialSchist Lae
SpruceKonuto
AndersonOsborne
ChiselCallinan
Chisel U/GStall Lake
Lalor777
Trout LakeFlin Flon
29 Second Quarter 2010 Results
Strengthening our management team
• Key new hires and appointments announced
• Enhancing our ability to go from sourcing to development
to operating our projects
• Experienced work force of more than 1,400
• Excellent track record for safety across operations
• Strong record of environmental compliance
• All operations management systems OHSAS 18001
certified
30 Second Quarter 2010 Results
Near term milestones
• Ongoing exploration at Lalor and various JV properties
• NI 43-101 resource estimate at Reed Lake in early 2011;
production decision to follow
• Fenix feasibility study by year end 2010 results
• New drilling program, updated resource estimate in late
2010 and environmental application submitted at Back
Forty by Q4 2011
31 Second Quarter 2010 Results
Investment Highlights
• Operational Excellence
• Financial Strength
• Growth Potential
• Management Strengthened
• NYSE Listing and Inaugural Dividend
Second Quarter 2010 ResultsAugust 5, 2010
Strength to Build the Future