Mr. Peter Kukielski reports

HUDBAY ANNOUNCES THIRD QUARTER 2023 RESULTS

Hudbay Minerals Inc. has released its third quarter 2023 financial results. All amounts are in U.S. dollars unless otherwise noted.

Delivering record third quarter operating and financial results:

• Achieved record quarterly revenue of $480.5-million with strong consolidated copper production of 41,964 tonnes and record quarterly consolidated gold production of 101,417 ounces as higher grades from the Pampacancha deposit in Peru and the Lalor mine in Manitoba were realized together with the first full quarter of Copper Mountain production for Hudbay;
• Reaffirmed full-year 2023 production, cash cost and sustaining cash cost guidance for Hudbay's Peru and Manitoba operations; issued Copper Mountain production, cash cost and capital expenditure guidance for the period since completion of the acquisition on June 20, 2023; Hudbay consolidated production, cash cost and capital guidance updated to include Copper Mountain contributions in 2023;
• Delivered a significant increase in operating cash flow before change in non-cash working capital of $182.0-million in the third quarter, compared with $55.9-million in the second quarter;
• Consolidated cash cost and sustaining cash cost per pound of copper produced, net of byproduct credits, in the third quarter, were $1.10 and $1.89, respectively, and both metrics improved by 31 per cent compared with the second quarter;
• Peru operations benefited from significantly higher grades at the Pampacancha pit during the third quarter of 2023, resulting in 29,081 tonnes of copper production and 40,596 ounces of gold production in the third quarter; Peru cash cost per pound of copper produced, net of byproduct credits, in the third quarter, declined to 83 cents, in line with quarterly cadence expectations; Pampacancha began delivering on anticipated higher copper production and precious metal byproduct credits in the third quarter; this strong performance is expected to continue in the fourth quarter, enabling the Peru operations to meet all metal production and cost guidance for 2023;
• Manitoba operations produced 56,213 ounces of gold in the third quarter as production focused on mining the higher gold and copper grade zones at Lalor; mill recoveries also increased meaningfully compared with the prior period as a result of changes to optimize the circuits at the Stall and New Britannia mills; Manitoba cash cost per ounce of gold produced, net of byproduct credits, was $670 during the third quarter, and full-year cash costs are expected to be within the annual guidance range;
• First full quarter of Copper Mountain operations produced 9,303 tonnes of copper at a cash cost per pound of copper produced, net of byproduct credits, of $2.67; with integration activities well advanced, continuous improvement methodologies applied at Hudbay's Constancia operations have started to be implemented in the Copper Mountain mill as the company continues its operational stabilization plans;
• Third quarter net earnings and earnings per share were $45.5-million and 13 cents, respectively; after adjusting for a non-cash gain of $32.4-million related to a quarterly revaluation of Hudbay's closed site environmental reclamation provision, among other items, third quarter adjusted earnings per share were seven cents;
• Cash and cash equivalents increased by $65.5-million to $245.2-million during the third quarter due to strong operating cash flows bolstered by higher copper and gold sales volumes from mining the high-grade zones of the Pampacancha deposit and higher gold and copper grade zones at Lalor;
• Revenue, earnings and operating cash flow would have further benefited from the sale of approximately 20,000 ounces of consolidated gold production that remained unsold at the end of the third quarter.

Generating free cash flow with increased production and continued financial discipline:

• Executed on planned higher production levels and achieved continued operating and capital cost-efficiencies to generate significant free cash flow in the third quarter;
• Achieved adjusted EBITDA of $190.7-million in the third quarter, the highest quarterly level over the last five years and a 135-per-cent increase from the second quarter;
• Increased cash and total liquidity by $175.8-million to $539.6-million, including increased availability under the company's credit facilities due to higher EBITDA levels, lower net debt and renegotiated covenants;
• Net debt reduced to $1,132-million during the third quarter, which, together with higher levels of adjusted EBITDA, has improved the company's net debt to EBITDA ratio compared with the second quarter;
• Deleveraging efforts continued subsequent to quarter-end into October, 2023, with a $40-million repayment on the company's credit facilities, a $5-million principal repayment on the Copper Mountain bonds, and the recommencement of deliveries under the gold forward sale and prepay agreement to reduce the gold prepayment liability;
• On track to deliver annual discretionary spending reduction targets for 2023 with lower growth capital and exploration expenditures compared with 2022; as a result of a continued focus on discretionary spending reductions, total capital expenditures for 2023 (excluding Copper Mountain) are expected to be approximately $30-million lower than previous guidance levels, a further decrease from the $15-million reduction announced in the second quarter, representing a 10-per-cent reduction in total capital expenditures.

Executing on growth initiatives and prudent financial planning:

• Postacquisition plans to stabilize the Copper Mountain operations are under way with a focus on mining fleet ramp-up activities, accelerated stripping and increasing mill reliability; to date, approximately $9-million of the $10-million in targeted annualized corporate synergies has been achieved;
• As previously announced, a new technical report for the Copper Mountain mine is expected to be released in the fourth quarter; the new technical report will include an updated mine plan and updated annual production and cost estimates; the new technical report will also include updated mineral reserve and resource estimates and mill throughput assumptions;
• Completed ramp-up of the Stall recovery improvement program with significantly higher copper, gold and silver recoveries realized in the third quarter;
• Released results of the derisked and enhanced Copper World prefeasibility study for phase 1 in September, 2023, which demonstrated a simplified mine plan with an extended 20-year mine life requiring only state and local permits, an after-tax net present value (8 per cent) of $1.1-billion, and a 19-per-cent internal rate of return at a copper price of $3.75 per pound;
• Completed the acquisition of Rockcliff Metals Corp. on Sept. 14, 2023, which has increased the company's land position within trucking distance of the Snow Lake processing facilities by more than 250 per cent;
• Commenced initial drill program at the company's Mason project in Nevada to test high-grade targets on satellite properties with 25 per cent of the program completed and assay results pending.

"We delivered on our plan for significantly higher production, revenue and cash flow in the third quarter, marking an inflection point as we generate strong returns from our recent brownfield and growth investments across the business," said Peter Kukielski, president and chief executive officer. "We are reaffirming our 2023 full-year guidance with strong copper and gold grades from Pampacancha in Peru and higher gold grades at Lalor in Manitoba, while remaining disciplined with capital spending. This, together with the contribution from our first full quarter of operating Copper Mountain, led to meaningful cash flow generation and demonstrates Hudbay's resilient operating platform and continued focus on deleveraging."

Conference call and webcast

Date:  Thursday, Nov. 9, 2023

Time:  9 a.m. ET

Webcast:  at the Hudbay website

Dial-in:  1-646-307-1591 or 1-800-599-5188

Qualified person and National Instrument 43-101

The technical and scientific information in this news release related to the company's material mineral projects has been approved by Olivier Tavchandjian, PGeo, senior vice-president, exploration and technical services. Mr. Tavchandjian is a qualified person pursuant to National Instrument 43-101 (Standards of Disclosure for Mineral Projects).

As disclosed in this news release, Hudbay expects to file a new technical report for the Copper Mountain mine in the fourth quarter of 2023. The new technical report will include an updated mine plan and updated annual production and cost estimates. The new technical report will also include updated mineral reserve and resource estimates and mill throughput assumptions consistent with Hudbay's preacquisition internal assessments and in line with the mineral reserve and resource estimates and throughput assumptions disclosed in Copper Mountain's historical technical report dated Feb. 25, 2019 (after accounting for mining depletion). Accordingly, Hudbay does not expect its mineral reserve and resource estimates and mill throughput expansion assumptions to be consistent with those disclosed in Copper Mountain's most recent technical report dated Sept. 30, 2022. Investors are cautioned they should not rely on any of Copper Mountain's previously issued technical reports.

We seek Safe Harbor.