Strategy

In 2010, Hudbay set two clear goals: to grow our company and to create long-term value for our shareholders. We laid out an equally clear strategy for achieving those goals. Experience, gained over nearly nine decades of operation, has taught us that the best way to create sustainable value in mining is to find and build new mines, and then to operate them in an environmentally and socially responsible way.

With this understanding, we introduced a five-year plan designed to make the best use of our proven capabilities in exploration, mine development and operation, while leveraging our particular expertise in volcanogenic massive sulphide (VMS) and porphyry deposits. The plan has three main pillars:

• Acquire VMS and porphyry exploration and development properties that are located in mining-friendly jurisdictions in the Americas and have exploration upside potential;
• Find and expand mineral deposits through exploration and bring them into production; and
• Optimize the value of producing assets through safe and efficient operations.

Guided by these pillars, we moved to develop the Lalor and Reed projects in northern Manitoba, and went on to acquire and develop the Constancia project in Peru. The strategic value of Hudbay’s development capabilities was reinforced when, in mid-2014, we acquired Augusta Resource Corporation and its Rosemont property, an asset that aligns perfectly with Hudbay’s acquisition criteria (geographically and geologically).

Bringing projects into production also requires the approval of regulators and acceptance by local communities. Wherever we are, we have worked to be responsible builders and operators, to be respectful of communities, and to ensure that we provide opportunities for local people to join in the substantial economic activity associated with our operations. We believe this work is an investment that provides returns for our shareholders and our other stakeholders.

Going forward, we will focus on bringing Constancia into full production, moving ahead with Rosemont permitting and engineering, optimizing the value of our producing assets, and generating strong returns from the over $2 billion of capital invested in our three new mines.

Successfully building Lalor, Reed and Constancia has elevated Hudbay’s performance and its profile. We are proven as capable developers, financiers and operators in multiple jurisdictions. Now, leading firms in the mining sector are approaching Hudbay with opportunities to expand our growth pipeline, and we are evaluating them – always in keeping with our commitment to create sustainable value for stakeholders.