Mr. George Ogilvie of Arizona Sonoran reports

ARIZONA SONORAN ANNOUNCES C$19.9 MILLION STRATEGIC PRIVATE PLACEMENT WITH HUDBAY

Hudbay Minerals Inc. has agreed to subscribe for 11,852,064 common shares of Arizona Sonoran Copper Company Inc. in a non-brokered private placement at a price of $1.68 per common share for total consideration of $19,911,467. Closing is expected to occur on or about Jan. 30, 2025, subject to certain customary closing conditions. Proceeds of the private placement are to be allocated to drilling, exploration, technical studies and advancement of the Cactus copper project in Arizona, and general corporate purposes.

Highlights:

• Hudbay will hold a 9.99-per-cent interest in Arizona Sonoran following the closing of the private placement and after giving effect to the common shares currently held by Hudbay.
• Hudbay will subscribe for 11,852,064 common shares at a price of $1.68 per share for aggregate gross proceeds of approximately $19.91-million (approximately $13.8-million (U.S.) at an exchange rate of $1 (U.S.):$1.44 (Canadian)):
  • The issue price represents a 15-per-cent premium to the five-day volume-weighted average price of the common shares on the Toronto Stock Exchange (TSX) as of the close of trading on Jan. 7, 2025.
• Hudbay has also agreed to subscribe for additional common shares to maintain its 9.99-per-cent interest in Arizona Sonoran in the event that pre-emptive rights held by certain other existing shareholders are exercised in connection with the private placement.
• In connection with the private placement, Hudbay and Arizona Sonoran will enter into an investor rights agreement, pursuant to which Hudbay will have certain customary rights and obligations, substantially similar to those granted to certain other existing shareholders.

George Ogilvie, Arizona Sonoran president and chief executive officer, commented: "We are pleased and appreciative to welcome this further endorsement of our project and the go-forward plan by the team at Hudbay. It is the company's objective to develop Cactus to be a significant producer of copper cathodes for direct use by industry in the state of Arizona and the larger U.S. [United States] supply chain. We welcome Hudbay, a mid-tier base metal producer with decades of base metal successes in the Americas and a strong existing footprint in Arizona, as a larger and increasingly engaged shareholder, able to lend its experience and expertise as we advance and develop Cactus."

Peter Kukielski, Hudbay president and chief executive officer, commented: "Cactus is an exciting copper development project in Arizona. We see the U.S. as a Tier 1 mining jurisdiction, and this investment increases our exposure to another high-quality development project in the region as we continue to advance our Copper World project."

Hudbay currently holds 2,870,800 shares, representing 2.12 per cent of the company's issued and outstanding common shares. Postclosing of the private placement, Hudbay will own approximately 9.99 per cent of the common shares of Arizona Sonoran.

In connection with the private placement, Hudbay and Arizona Sonoran will enter into an investor rights agreement, pursuant to which Hudbay will have certain customary rights and obligations, provided Hudbay maintains certain ownership thresholds in Arizona Sonoran, including: (i) the right to participate in equity financings and top up its holdings in relation to dilutive issuances in order to maintain its pro rata ownership in Arizona Sonoran at the time of such issuance(s); and (ii) observer rights at meetings of the technical and sustainability committee of the company's board of directors and certain other customary information access rights. In addition, pursuant to the terms of the investor rights agreement, Hudbay will agree to vote on a basis consistent with the voting recommendations of Arizona Sonoran's board of directors or management in respect of various ordinary course matters presented at the company's 2025 and 2026 annual shareholder meetings.

The private placement is expected to close on or about Jan. 30, 2025, and is subject to the receipt of customary regulatory approvals, including approval by the TSX. The common shares to be issued in connection with the private placement will be subject to a statutory hold period, in accordance with applicable securities laws.

Scotiabank is acting as financial adviser, and Bennett Jones LLP as legal adviser, to the company in connection with the private placement.

About Arizona Sonoran Copper Company Inc.

Arizona Sonoran is a copper exploration and development company with a 100-per-cent interest in the brownfield Cactus project. The project, on privately held land, contains a large-scale porphyry copper resource, and a recent 2024 PEA (preliminary economic assessment) proposes a generational open-pit copper mine with robust economic returns. Cactus is a lower-risk copper developer benefiting from a state-led permitting process, in-place infrastructure, highways and rail lines at its doorstep, and on-site permitted water access. The company's objective is to develop Cactus and become a mid-tier copper producer with low operating costs that could generate robust returns and provide a long-term sustainable and responsible operation for the community, investors and all stakeholders. The company is led by an executive management team and board that have a long-standing record of successful project delivery in North America complemented by global capital markets expertise.

We seek Safe Harbor.