Mr. Peter Kukielski reports

HUDBAY AND MARUBENI SIGN FLIN FLON OPTION AGREEMENT TO ADVANCE EXPLORATION PARTNERSHIP

Hudbay Minerals Inc. has signed an option agreement with Marubeni Corp., pursuant to which Hudbay has granted Marubeni's wholly owned Canadian subsidiary an option to acquire a 20-per-cent interest in three projects located within trucking distance of Hudbay's processing facilities in Flin Flon, Man., as further described as follows. In order to exercise the option, amongst other things, Marubeni will finance at least $12-million in exploration expenditures over a period of approximately five years with Hudbay acting as operator and carrying out the exploration activities. Upon successful completion of Marubeni's earn-in obligations, a joint venture will be formed to hold the selected projects with Hudbay, acting as operator, holding an 80-per-cent interest and Marubeni holding the remaining 20-per-cent interest. The execution of the agreement follows the signing of a memorandum of understanding between the parties that set out the framework for a multiyear exploration partnership, as previously announced in July, 2023.

"This exploration partnership with Marubeni represents a significant milestone towards unlocking potential future value in the Flin Flon region," said Peter Kukielski, Hudbay's president and chief executive officer. "This arrangement allows us to partner with Marubeni and leverage our operational and exploration expertise to test our large Flin Flon land package to potentially bring another mine into production and utilize Hudbay's idle processing infrastructure in Flin Flon. Hudbay has discovered and operated 29 mines in our nearly 100-year history in Manitoba and we have the potential to continue that success with this renewed focus on exploration in Flin Flon."

Masafumi Ichigetsu, general manager, copper mining department, Marubeni, commented: "The signing of an option agreement with Hudbay gives us access to the Flin Flon greenstone belt, one of the most prospective base metal VMS [volcanogenic massive sulphide] camps in the world. We see tremendous opportunity to partner with Hudbay's technical expertise and proven track record of successful discovery, development and operation of many mines in the region. This is our first step to a long-lasting and prosperous relationship with Hudbay that will undoubtedly yield exceptional results."

Highlights of the agreement:

• During the earn-in period, Marubeni will finance exploration expenditures of up to $12-million across three highly prospective projects over five years. A significant budget of $7-million has been agreed to for the 2025 winter exploration program.
• Upon successful completion of Marubeni's earn-in obligations, Marubeni may exercise its option to form a joint venture with Hudbay for any of the designated projects.
• The joint venture will allow both parties to jointly pursue development of the projects, with Hudbay holding an 80-per-cent interest and Marubeni holding the remaining 20-per-cent interest.
• After formation of the joint venture, all subsequent costs for exploration and development of the properties will be financed by each member in proportion to their respective participating interest.
• Hudbay will act as the joint venture operator and manage work programs to progress the exploration and development efforts. Should any of the projects advance to production, the parties may discuss the utilization of Hudbay's idle Flin Flon milling complex to process ore.

Flin Flon projects

The agreement focuses on three projects in the Flin Flon region, namely Cuprus/White Lake, Westarm and North Star, which were selected by Marubeni following a period of detailed due diligence. All three properties hold past-producing mines that generated meaningful production with attractive grades of both base metals and precious metals. The properties remain highly prospective with potential for further discovery based on the attractive geological setting, limited historical deep drilling and promising geochemical and geophysical targets. Cuprus/White Lake, Westarm and North Star are all within 20 kilometres of Hudbay's Flin Flon milling complex.

Cuprus/White Lake

The Cuprus/White Lake project is located about 10 kilometres southeast of Flin Flon, consisting of 3,384 hectares including 94 claims. Historically, the area included the Cuprus mine, which produced 463,000 tonnes at grades of 3.25 per cent copper and 1.3 grams per tonne gold in the early 1950s, and the White Lake mine, which produced 850,000 tonnes at grades of 1.98 per cent copper and 0.72 gram per tonne gold over 10 years in the 1970s and 1980s. The geology in the area hosts favourable juvenile arc rocks on several parallel horizons, and most historical drilling was done without modern geophysical targeting.

Westarm

The Westarm project is located 14 kilometres south of Flin Flon, with three primary claims covering 727 hectares. The region saw production of over 1.4 million tonnes from the 1970s to 1990s, with average grades of 3.2 per cent copper and 1.58 grams per tonne gold. A compilation of historical work programs outlined 210 surface drill holes, with only 16 per cent of the holes at depths below 300 metres, and numerous VTEM (versatile time-domain electromagnetic) anomalies.

North Star

The North Star area is located 17 kilometres east of Flin Flon and includes 22 claims consisting of 406 hectares. The region had two historical producing mines: the North Star mine with production of over 242,000 tonnes with average grades of 6.11 per cent copper and 0.34 gram per tonne gold and the Don Jon mine with production of 79,000 tonnes at 3.09 per cent copper and 0.96 gram per tonne gold. Both were in operation in the 1950s, with the region having seen limited modern exploration techniques. The area has had an IP (induced polarization) survey over half the property with favourable chargeability anomalies that warrant further investigation.

Next steps

The exploration work will begin in the summer of 2024 with various geochemical and mapping programs. The 2025 winter exploration program is expected to be significant with up to 20,000 metres of drilling and several geophysical programs to generate additional drill targets on the properties.

Hudbay has granted Marubeni an option to acquire a 20-per-cent interest in three projects located within trucking distance of Hudbay's processing facilities in Flin Flon, Man. The exploration activities will be financed by Marubeni and carried out by Hudbay. All three properties hold past-producing mines that generated meaningful production with attractive grades of both base metals and precious metals. The properties remain highly prospective with potential for further discovery based on the attractive geological setting, limited historical deep drilling, and promising geochemical and geophysical targets.

About Hudbay Minerals Inc.

Hudbay is a copper-focused mining company with three long-life operations and a world-class pipeline of copper growth projects in Tier 1 mining-friendly jurisdictions of Canada, Peru and the United States.

Hudbay's operating portfolio includes the Constancia mine in Cusco (Peru), the Snow Lake operations in Manitoba (Canada) and the Copper Mountain mine in British Columbia (Canada). Copper is the primary metal produced by the company, which is complemented by meaningful gold production. Hudbay's growth pipeline includes the Copper World project in Arizona (United States), the Mason project in Nevada (United States), the Llaguen project in La Libertad (Peru), and several expansion and exploration opportunities near its existing operations.

The value Hudbay creates and the impact it has are embodied in its purpose statement: "We care about our people, our communities and our planet. Hudbay provides the metals the world needs. We work sustainably, transform lives and create better futures for communities." Hudbay's mission is to create sustainable value and strong returns by leveraging its core strengths in community relations, focused exploration, mine development and efficient operations.

We seek Safe Harbor.