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Date

May 1, 2026, 11 a.m. ET

Call participants

  • President & Chief Executive Officer — Peter Gerald Kukielski
  • Senior Vice President & Chief Operating Officer — Andre Lauzon
  • Senior Vice President & Chief Financial Officer — Eugene Lei
  • Vice President, Investor Relations & Corporate Communications — Candace Brule

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Takeaways

  • Revenue -- $757 million, the highest quarterly result in the company’s history, supported by higher realized copper and gold prices.
  • Adjusted EBITDA -- $422 million, setting a new record for the company.
  • Adjusted net earnings -- $159 million, or $0.40 per share, driven by cost control and higher realized metal prices.
  • Free cash flow -- $102 million after sustaining capital, with trailing twelve-month free cash flow at $400 million.
  • Consolidated copper production -- 28 thousand tonnes across all operations during the quarter.
  • Consolidated gold production -- 62 thousand ounces during the quarter.
  • Consolidated cash costs -- Record low negative $1.80 per pound of copper, with sustaining cash costs of $0, reflecting cost discipline and gold byproduct credits.
  • Liquidity -- $1.4 billion at period-end, declining to $957 million post-senior note repayment through cash and a $272 million credit facility draw.
  • Net debt -- Nearly zero at period-end, yielding the lowest net debt to EBITDA ratio in over ten years.
  • Copper World joint venture proceeds -- $420 million cash contribution received from Mitsubishi at close in January, directly funding development spend.
  • Peru copper production -- 21 thousand tonnes, with mill throughput at a quarterly record of 90.7 thousand tonnes per day.
  • Peru mill throughput capacity -- Permit approval received to increase annual capacity to 31.1 million tons (29.9 million tonnes), expanding future throughput potential.
  • Peru cash costs -- $0.70 per pound, up 23% sequentially, but outperforming annual guidance low end due to higher gold byproduct sales.
  • Manitoba gold production -- 48 thousand ounces, exceeding the prior quarter due to improved recoveries and mill throughput.
  • Manitoba cash costs (gold) -- $4.08 per ounce, outperforming guidance low end.
  • Copper Mountain (British Columbia) copper production -- 4.1 thousand tonnes, in line with planned sequencing.
  • British Columbia cash costs -- $2.41 per pound of copper, reduced from the prior quarter owing to higher gold credits and resolved downtime.
  • Production guidance -- All operations remain on track to achieve 2026 production and cost guidance for every metal and site.
  • Three-year copper production outlook -- Average of 147 thousand tonnes per year projected, up 24% from 2025.
  • Three-year gold production outlook -- Average of 243 thousand ounces per year expected.
  • Mine life updates -- Snow Lake extended by four years to 2041, Constancia stable to 2040, Copper Mountain extended two years to 2045.
  • New Ingerbelle permits -- Mines Act and Environmental Management Act amended permits granted; project added to the B.C. priority resource projects list in the quarter.
  • New Ingerbelle gold impact -- Expected to double average annual gold output at Copper Mountain from 20 thousand to 40 thousand ounces, with a current reserve-based mine life of ten years.
  • Mason (Nevada) budget -- $20 million allocated for 2026, covering studies, drilling, and pre-feasibility work.
  • Natural hedge -- Gold, accounting for 39% of gross revenues in the quarter, acts as a counterbalance to higher fuel and input costs.
  • Capital return policy -- Dividend increased for the first time in company history, no firm commitment to share buybacks for 2026 at this time.
  • Growth pipeline -- DFS for Copper World over 85% complete; FID and project sanctioning scheduled for later in 2026, with first production targeted for mid-2029.
  • Strategic acquisitions and integration -- Arizona Sonoran acquisition underway, creating a major copper hub in southern Arizona and expected to close this year.
  • Permitting and regulatory developments -- LSIB judicial review of New Ingerbelle permit amendment underway; management expressed confidence in the outcome.

Summary

Hudbay Minerals (HBM +1.00%) achieved unprecedented consolidated revenue, adjusted EBITDA, and adjusted net earnings, underpinned by broad-based operational performance and rigorous cost control. A surge in cash and liquidity, supplemented by Mitsubishi’s $420 million JV payment, elevated its financial flexibility and supported urgent investment in Copper World, Cactus, and Mason. Expansionary milestones included mill throughput records, a regulatory breakthrough in Peru, critical permit approvals for New Ingerbelle, and multi-year mine life extensions at core assets. The company highlighted its capital allocation approach, reflecting the first-ever dividend hike and an openly flexible stance on buybacks, as it targets capital discipline amid significant growth investment. Management reiterated all-site guidance adherence and detailed a near-zero net debt position, while maintaining long-term copper production projections of a 24% three-year growth rate and an ambitious pathway toward doubling output by the next decade.

  • “Our leading operating cost performance resulted in record low consolidated cash costs in the first quarter,” CEO Kukielski said, attributing the result to byproduct gold credits and efficient operations.
  • Management directly noted that “oil is about 50% higher than our original budgeted amount for the year,” but that elevated gold prices provided a $200 million offset to the potential $45 million increase in input costs, illustrating the portfolio’s effective gold hedge.
  • The company confirmed, “We are well positioned to achieve the full-year cost guidance range in Peru” following a 23% sequential increase in cash costs, reflecting a net positive operational outcome.
  • “net debt at the end of the quarter was nearly zero, bringing our net debt to EBITDA ratio to its lowest point in more than a decade,” management reported, reinforcing their stated focus on balance sheet strength.
  • Regarding project development timelines, CEO Kukielski stated, “Copper World targeted dates will be released with the DFS, but it is pretty well mid-2029 for rock in the box. Cactus would be sometime after that.”

Industry glossary

  • DFS: Definitive Feasibility Study—final stage engineering and financial analysis to support project sanctioning and financing.
  • FID: Final Investment Decision—management and board approval to proceed with full project construction and capital deployment.
  • Byproduct credits: Revenue received from secondary metals (such as gold) that reduce the cash cost per pound of the primary product (such as copper).
  • SAG mill: Semi-Autogenous Grinding mill—large mill using both steel balls and rock itself to grind ore in mineral processing circuits.
  • Sustaining cash costs: Ongoing cost required to sustain operations, excluding growth or expansionary capital, often normalized per unit of output.
  • NCIB: Normal Course Issuer Bid—a public share repurchase program subject to regulatory approval in Canada.
  • LSIB: Lower Similkameen Indian Band—First Nation involved in New Ingerbelle’s permitting process and regulatory review.

Full Conference Call Transcript

Peter Gerald Kukielski: Thank you, Candace. Good morning, everyone, and thank you for joining us on today's call. We have had a great start to the year, achieving several key operational, financial, and growth milestones. Hudbay Minerals Inc. delivered another quarter of record revenue, record adjusted EBITDA, and record adjusted earnings in the first quarter. This was driven by steady operating performance, our focus on cost control, and the continued benefit from margin expansion with our unique mix of copper and gold exposure. Our leading operating cost performance resulted in record low consolidated cash costs in the first quarter, which contributed to continued strong free cash flow generation.

With the strong performance in the quarter, all our operations are on track to achieve 2026 production and cost guidance. Building on our commitment to prudent balance sheet management, we ended the quarter with over $1 billion in cash and cash equivalents, benefiting from $420 million received from Mitsubishi for their initial cash contribution on closing of the Copper World joint venture transaction in January. Our enhanced financial flexibility has positioned us well to continue advancing the development of Copper World, reinvest in high-return opportunities at each of our operations, and de-risk the Cactus project upon completion of the acquisition of Arizona Sonoran to deliver attractive growth and maximize long-term risk-adjusted returns at each of our operations for stakeholders.

Slide three provides an overview of our first quarter operational and financial performance. The first quarter demonstrated strong operating performance with higher mill throughput across the three operations compared to the previous quarter, delivering consolidated copper production of 28 thousand tonnes and consolidated gold production of 62 thousand ounces. We achieved record quarterly revenues of $757 million and record adjusted EBITDA of $422 million in the first quarter. Cash generated from operating activities was $211 million, remaining relatively consistent with the fourth quarter as a result of favorable changes in non-cash working capital.

First quarter adjusted net earnings were a record of $159 million, or $0.40 per share, reflecting higher realized metal prices and strong cost control across the operations resulting in higher gross profit margins. During the first quarter, we continued to demonstrate industry-leading cost performance, delivering record low consolidated cash costs of negative $1.80 per pound of copper and sustaining cash costs of $0. This incredible cost performance was partially driven by higher gold byproduct credits, reflecting the benefits of Hudbay Minerals Inc.'s unique commodity diversification.

Turning to Slide four, Hudbay Minerals Inc. has delivered several quarters of significant free cash flow generation as a result of steady operating performance, expanding margins from strong copper and gold exposure, and our cost control efforts. With our enhanced balance sheet and diversified free cash flow generation, we are well positioned to fund our attractive growth pipeline. Our cost control efforts are focused on navigating emerging external cost pressures such as higher fuel prices and short-term labor challenges. We have not experienced any disruption to fuel availability and have been able to mitigate the cost pressures through initiatives to further improve throughput and enhance operating efficiencies.

We are well insulated from external cost pressures due to our diversified platform with significant byproduct credits from gold production and the polymetallic nature of our ore deposits. While most of our revenues continue to be derived from copper, revenue from gold represents a meaningful portion of total revenues, with 39% of gross revenues from gold in the first quarter. After accounting for our sustaining capital investments but before growth investments, we generated $102 million in free cash flow during the quarter, bringing our trailing twelve-month free cash flow generation to $400 million.

As mentioned earlier, we ended the first quarter with over $1 billion in cash and cash equivalents, and as of March 31, our total liquidity was $1.4 billion. Our net debt at the end of the quarter was nearly zero, bringing our net debt to EBITDA ratio to its lowest point in more than a decade. Consistent with our prudent balance sheet management and focus on cost of capital, following the quarter, we repaid our outstanding 2026 senior unsecured notes on maturity on April 1. We used a combination of cash on hand and a $272 million draw on our low-cost revolving credit facilities.

After giving effect to this repayment, Hudbay Minerals Inc.'s total liquidity decreased by $473 million to $957 million. This continues to provide us with significant financial flexibility as we advance Copper World towards a sanctioning decision later this year. Turning to Slide five, the Peru operations continued to demonstrate steady operating performance with production and costs in line with expectations. The operations produced 21 thousand tonnes of copper, 9 thousand ounces of gold, 530 thousand ounces of silver, and 380 tonnes of molybdenum during the first quarter. Production of copper and gold was lower than the fourth quarter due to the depletion of the higher-grade Pampacancha ore in late 2025.

Mill throughput levels averaged approximately 90.7 thousand tonnes per day in 2026, achieving a new quarterly record. The team's efforts to increase mill throughput align with the Peru Ministry of Energy and Mines regulatory change allowing mining companies to operate up to 10% above permitted levels. On March 6, Hudbay Minerals Inc. received a permit approval to increase annual mill throughput capacity to 31.1 million tons (29.9 million tonnes), setting a new base for the 10% permit allowance. We continue to advance the installation of pebble crushers later this year to further increase mill throughput rates in 2026, and we are on track to achieve 2026 production guidance for all metals in Peru.

First quarter cash costs in Peru were $0.70 per pound of copper, a 23% increase compared to the fourth quarter due to lower byproduct credits, offset by lower profit sharing, lower power costs, and lower treatment and refining charges. Cash costs in the quarter outperformed the low end of the annual guidance range as a result of strong operating cost performance and temporarily higher gold byproduct sales from Pampacancha despite emerging external cost pressures. We are well positioned to achieve the full-year cost guidance range in Peru. During the quarter, Constancia was recognized as the safest open pit operation in Peru during the National Mining Safety Contest for our performance in 2025.

This reflects our company's unwavering commitment to safety and validates Constancia's compliance with the highest operational safety and regulatory standards. Moving to our Manitoba operations, on Slide six. The first quarter demonstrated strong operational agility in mitigating lower equipment and labor availability at the Lalor mine while continuing to prioritize gold ore feed for the New Britannia mill. This strategy successfully maintained strong gold production in the first quarter, supported by higher mill recoveries compared to 2025. Our Manitoba operations produced 48 thousand ounces of gold, 2.5 thousand tonnes of copper, 5 thousand tonnes of zinc, and 213 thousand ounces of silver in the quarter.

Production of gold was higher than in the fourth quarter due to higher gold recoveries and higher mill throughput, while all other metals were lower primarily due to lower grades. Production in 2026 is expected to be higher than in 2025 due to grade sequencing and higher ore output from Lalor. With solid operating results in the first quarter, we are on track to achieve 2026 production guidance for all metals in Manitoba. The Lalor mine hoisted an average of 3.9 thousand tonnes of ore per day in the first quarter, strategically prioritizing gold zones to secure optimal feed for the New Britannia mill.

Total ore mined was lower than the prior quarter because of lower effective utilization of equipment due to reduced workforce availability. This was offset by successfully onboarding nearly 80 new employees as recruitment and upskilling of employees are underway to increase proficiency of frontline employees. The New Britannia mill averaged approximately 2 thousand tonnes per day in the first quarter and benefited from continuous improvement initiatives to unlock future throughput capacity. Gold recoveries of 90% at the New Britannia mill reflect ongoing optimization efforts. Similarly, the Stall mill achieved improved gold recoveries of 73% in the first quarter, reflecting process optimization and enhanced gold recovery initiatives. The 1901 deposit delivered 11 thousand tonnes of development ore in the first quarter.

The team continues to advance haulage and exploration drift to further delineate the ore body and support ongoing infrastructure projects. Looking ahead, we plan to prioritize exploration definition drilling, ore body access, and establish critical infrastructure at 1901 in preparation for full production in 2027. Manitoba gold cash costs in the first quarter were $4.08 per ounce, outperforming the low end of the guidance range. We are well positioned to achieve our 2026 cash cost guidance range.

In British Columbia, we continue to focus on advancing our multiyear optimization plans, achieving significant milestones in both mining productivity and project permitting in the first quarter, and remain on track to deliver the benefits of the stripping program and unlock higher-grade ore later this year. As shown on Slide seven, Copper Mountain produced 4.1 thousand tonnes of copper, 5.2 thousand ounces of gold, and 43 thousand ounces of silver in the first quarter, in line with our guidance and planned mine sequencing. Production was supported by a higher mill throughput, offset by lower grades compared to the fourth quarter.

We remain on track to achieve our 2026 production guidance expectations for all metals in British Columbia, with higher production expected in the second half of the year as mill improvements take effect. Mining activities reached a record total material movement of over 25 million tonnes in the first quarter driven by an optimized mining sequence in the Main Pit and increased contributions from the North Pit. This ramp up was supported by the successful commissioning of a new production loader in January. To further bolster the equipment fleet and add to this momentum, a new shovel has been recently commissioned.

Drilling throughput benefited from the completion of the second SAG mill and the mill optimization initiatives implemented in late 2025, resulting in increased mill throughput in 2026. The second SAG mill achieved increased throughput in the quarter and averaged 10 thousand tonnes per day in March. The primary SAG mill continues to operate under a reduced load and is being rigorously monitored prior to the head replacement scheduled for late June and into July. The mill remains on track to achieve its permitted capacity of 50 thousand tonnes per day in 2026.

British Columbia cash costs were lower than the prior quarter, delivering cash costs of $2.41 per pound of copper as a result of higher gold byproduct credits and resolving the unplanned maintenance downtime issues experienced in the prior quarter. First quarter cash costs were within the guidance range and despite emerging external cost pressures, we remain on track to achieve 2026 cash cost guidance in British Columbia. During the quarter, the New Ingerbelle project reached a major milestone in February with the receipt of the Mines Act and the Environmental Management Act amended permits from provincial regulators. The New Ingerbelle project supports continued copper production, increased gold production, and further mine life extensions.

The project is designed to access higher-grade mineralization while improving operational efficiency with a stripping ratio approximately three times lower than current mining areas. With these permit approvals, we are advancing critical infrastructure required for the expansion. This includes the construction of an access road, a bridge across the Similkameen River, and the development of an east haul road link to New Ingerbelle with existing operations. A large drill program was initiated during the first quarter at New Ingerbelle to improve resource definition and expansion. We are pleased to receive the news this week that the B.C. government has added the New Ingerbelle project to the province's list of priority resource projects.

This list highlights the acceleration of major projects that strengthen economic growth, support resource development, and create jobs and long-term value. Turning to Slide eight, we announced our annual mineral reserve and resource update along with an improved three-year production outlook during the quarter. We extended Snow Lake's mine life by four years to 2041, maintained Constancia's mine life to 2040, and extended Copper Mountain's mine life by two years to 2045. Consolidated copper production is expected to average 147 thousand tonnes per year over the next three years, representing a 24% increase from 2025.

This growth is driven by higher expected copper production in British Columbia from the mill throughput ramp up in 2026, higher grades in British Columbia in 2027 from the completion of the accelerated stripping program, and higher expected mill throughput in Peru starting in 2026. Consolidated gold production is expected to average 243 thousand ounces per year over the next three years, reflecting continued strong production in Manitoba and the expected contribution from New Ingerbelle in British Columbia starting in 2028.

We have already made significant progress in advancing many of our corporate and strategic objectives so far this year, and we anticipate many more key catalysts to come from our portfolio of long-life assets in Tier 1 jurisdictions, as shown on Slide nine. Our prudent balance sheet management, strong financial flexibility, significant free cash flow generation from strong exposure to higher copper and gold prices, and continued margin expansion has positioned us to be able to advance generational growth investments across the portfolio. In Peru, we will deliver higher mill throughput in the second half of the year as we complete the installation of two pebble crushers, which will grow copper production in 2027 and 2028.

We also continue to progress exploration plans in Peru, including at the Maria Reyna and Caballito properties, to provide long-term growth potential at Constancia. In Manitoba, we continue to advance optimization initiatives and exploration efforts to demonstrate an enhanced production profile and expanded mine life. Exploration activities are underway at the 1901 deposit as we advance towards production in 2027, and an expanded exploration program at Talbot is focused on upgrading mineral resources to reserves and expanding the deposit footprint at depth. In British Columbia, we expect to continue to see operational improvements in the second half of the year as we complete our optimization initiatives and advance this operation towards its free cash flow inflection point later this year.

Following the receipt of the New Ingerbelle permits earlier this year, we have commenced construction of critical infrastructure for the development of the deposit to access the higher-grade mineralization and drive further cash flow growth starting in 2028. We have also launched the largest exploration program at New Ingerbelle to further increase mine life extension potential. On Slide 10, during the first quarter, we made significant steps towards enhancing our United States copper growth pipeline. At Copper World, as I mentioned earlier, we announced the closing of the Mitsubishi joint venture transaction establishing a long-term strategic relationship with a premier partner.

The initial $420 million in cash proceeds will be used to directly fund the remaining pre-sanctioning costs and the initial project development costs following a sanctioning decision later this year. Feasibility activities at Copper World are well underway, with the DFS progressing above 85% completion at March and remaining on track for completion in mid-2026. In March, we announced the acquisition of Arizona Sonoran, establishing a major copper hub in Southern Arizona with the addition of the Cactus project to our existing Arizona business. This transaction further strengthens our position as a premier Americas-focused copper company, enhances our U.S. growth pipeline, and creates significant operational efficiencies and regional synergies with the staged development of Copper World and Cactus.

The transaction has received strong shareholder support and is expected to close in 2026. We have also commenced pre-feasibility study activities at our Mason copper project in Nevada. We expect the study to be completed in 2027. While Mason is not expected to come into production until after Copper World and Cactus, its larger production base will position it as the third-largest copper mine in the U.S. As we continue to advance all of these attractive growth initiatives across the portfolio, we remain committed to prudently allocating capital to the highest risk-adjusted return opportunities to deliver significant value for stakeholders.

Concluding on Slide 11, our focus on demonstrating continued operational excellence while prudently advancing our many organic growth opportunities will deliver significant copper production growth. Over the next three years, we expect to increase production by 24% through attractive brownfield investments while continuing to advance our attractive U.S. pipeline to meaningfully expand annual copper production levels. By the end of the decade, we expect to increase our annual copper production by more than 70% to approximately 250 thousand tonnes with Copper World. And with the staged development of Cactus and Mason to follow, we have a pathway to 500 thousand tonnes of copper by the middle of the next decade.

The most compelling part of this industry-leading copper growth profile is that our growth assets are low risk, low capital intensity projects located in some of the best mining jurisdictions in the world, and we have the team, the balance sheet, and strong financial plan to deliver this pipeline. This is largely driven by a diversified operating platform with significant exposure to complementary gold and our expanding margins. I have no doubt that our continued focus on delivery and execution will continue to drive significant value for all our stakeholders. And with that, we are pleased to take your questions. Thank you.

Operator: Ladies and gentlemen, we will now begin the question-and-answer session. Our first question is from Ralph Profiti with Stifel Financial. Please go ahead.

Ralph Profiti: Thanks, operator, and good morning. Thanks for taking my question. Peter and Eugene, there has been a lot of work being done at Copper World on long-lead items ahead of the definitive feasibility study. Do you have a goal for how much of the revised budget, by the time sanctioning does come, will be locked in, contracted, and committed? I am trying to get a sense of how much work can be done ahead of time to manage inflationary pressures.

Peter Gerald Kukielski: Thanks, Ralph. Great question. We certainly will lock in a significant amount of the equipment. For example, we already have pricing on fleet. We have the opportunity to lock in fleet pricing right now. We have pricing from vendors for primary equipment that we are going to procure, and we are ensuring that we have space in the production facilities right now. I would say between the issue of the DFS and FID, we will lock in pricing on all of that equipment. Andre, any comments you might have in addition?

Andre Lauzon: Yes, I agree on long-lead and there are also some critical path items that we have been moving along. We started construction of our waterline, taken some initial blasts, and we are pioneering our haul roads as we speak. Those are already in our budget for the year. Like Peter said, the big ones are already in place. Ball mills, SAG mills, all those costing items are coming forth.

Eugene Lei: Ralph, if I could just add one more point. You will recall that when we announced the joint venture transaction last August, we increased the 2025 budget for long-lead items. We did not just react to this today. We have been thinking about this for well over a year. We have been placing orders and getting ourselves ready for the FID decision well over a year in advance.

Ralph Profiti: Great. That is very helpful. And maybe as a follow-up, a point of clarification, Peter, on the LSIB judicial review. This is a process that is actually tied to the regulatory government process itself and sits outside of Hudbay Minerals Inc.? Are you needing to have a legal strategy around this to preserve the 2028 timeline for New Ingerbelle?

Peter Gerald Kukielski: Yes, great question, Ralph. In March, the LSIB submitted an application for review of the regulatory decision to grant the permit amendment. We remain very confident in the integrity and the robustness of that regulatory process that led to the issuance of the permit amendment, and we believe that the court will uphold the decision. At the same time, we remain committed to working with the LSIB in a respectful and constructive manner to try to resolve their concerns through the mechanisms that were agreed to by the parties in the participation agreement.

Their issue is not with us, it is with the government, and we have a constructive relationship with them and will continue to ensure that we continue to drive that relationship.

Ralph Profiti: Great. Thank you for that clarity and for your answers.

Operator: The next question is from George Eadie with UBS. Please go ahead.

George Eadie: Yes, hi, thanks for the call today. Following up on that question from Ralph, on the Copper World CapEx, Peter and Eugene, how much can you lock up in the next twelve months or so in terms of dollars? Are we talking 20% to 30% of the CapEx spend you can fix in that period? Is that a reasonable estimate? And we have seen a zinc project nearby this week materially lift CapEx, and while part of that is scope change, how can we get meaningful conviction that in twelve months you can avoid that risk?

Eugene Lei: Lots of careful planning. We have had a lot of time to think about this project over the years, and the feasibility study for a similar project was completed a decade ago. We also have a certain amount of equipment already in storage and obviously not subject to cost inflation. In terms of the actual percentage in dollars, we are still working on the final estimate in the DFS. We do not know that number yet. We have been very clear that we expect there to be some cost inflation and escalation related to the final CapEx number from the pre-feasibility number that was released three years ago.

As you know, there has been inflation, but that three-years-ago number was post the biggest wave of inflation post-COVID. So we are not expecting a blowout in terms of capital. We are approximately 85% done with the feasibility study. We will release that likely in the third quarter, midyear as expected, with an FID to follow. We do not have any further clarity or any guidance on the actual CapEx number at this moment.

Peter Gerald Kukielski: I would add, George, that we are following an integrated project delivery system, which incorporates a number of the contractors and engineers in the overall project management structure. So the development of the estimates that we have will, in no small measure, include their estimates of their own contributions. The constructors and engineers we are using have actually participated in several of the projects that have been developed in the U.S. recently, and they will have deep insight into the evolution of costs over the last couple of years in any case. That will be reflected in the definitive feasibility study.

Andre Lauzon: To the original question around percentages, it is tough, like Eugene said, but we do have insights in terms of the fleet. If you recall from the pre-feasibility study, the fleet is 10% to 15% of the overall cost, and the numbers that we are receiving are in line with our estimates. That is a good sign to start. You will recall this project is one of the lowest capital intensity projects in the copper space. It is not subject to some of the larger cost flows we have seen in the sector.

It is not at altitude and is about 26 miles from Tucson, so some of the inherent infrastructure challenges that have plagued other builds do not apply to this project as much. We are confident there will be a very robust economic case for this project, as evidenced by Mitsubishi joining at the PFS level a few months ago.

George Eadie: Okay, yes, that is helpful, thanks. Pivoting slightly, at Cactus, when will we get an updated PFS with Hudbay Minerals Inc.'s overlay post-transaction closing? Could that be by year-end, or is it still going to be some time next year? And what is the latest on the permit amendments too, please?

Andre Lauzon: Sure. I will take that. The vote is still to come in a couple of weeks. We are quite excited about the project and the teams. We are very pleased with the quality of the teams currently working for Cactus and excited for them to be part of ours. The next step, once the vote goes through, is to sit with the teams and regroup. There are lots of synergies with Copper World and our view of the acquisition. Getting their understanding as well will go into next year. It is not a year-end thing. Realistically, it is into 2027 for sure. In terms of permitting, the teams are progressing permitting at site and having discussions locally with the county.

The permitting and the revisiting of that is on track and moving forward, and we are supportive. The synergies include looking at fleet; we just completed negotiating a large fleet for Copper World. Once we go through closing, there will be opportunities for Cactus when we look at it altogether. But end of the year would be rushed; it is definitely into next year.

George Eadie: Okay. Thanks, guys. All the best.

Operator: The next question is from Fahad Tariq with Jefferies. Please go ahead.

Fahad Tariq: Maybe just any color on input cost pressures or supply constraints that you are seeing? I do not think I saw anything in the presentation or in the press release. If you could comment on that, that would be helpful. Thanks.

Eugene Lei: I can take that. I assume, Fahad, you are referring to current fuel and oil prices and the like. From Hudbay Minerals Inc.'s standpoint, we are fairly well insulated from these emerging cost pressures. As you saw, we held costs very well in the first quarter and, while prices for oil were not yet elevated, our operations are minimally affected. In Peru, about a $10 increase in the price of oil per barrel is about a $0.04 cash cost increase per pound of copper. In B.C., given the heavy stripping that we are doing, that is a little higher, about $0.10 per pound produced.

If you think about oil today and, for example, current prices were to hold, oil is about 50% higher than our original budgeted amount for the year, and that would result in about a $45 million hit to cash flow if oil prices were to persist at this level for the whole year. We have a natural hedge of gold in our portfolio that more than insulates that cost. Gold is about 20% higher than what we budgeted for the year, and if these gold prices were to hold for the rest of the year, the impact of that would be close to $200 million.

So, in terms of the net effect, what we have with the gold that we produce in the portfolio is a natural hedge against larger cost inputs like oil. We feel very well positioned.

Peter Gerald Kukielski: And, Fahad, I would also add that one of our primary cash flowing assets, which is Manitoba, is largely insulated from the effects of oil prices since we use very little oil in Manitoba at all. Most of our underground equipment is electrically driven or battery driven in any case.

Fahad Tariq: Okay, great. That is really clear. And then switching gears to the growth profile, can you remind us in terms of the sequencing between Cactus and potentially Copper World Phase 2, how you are thinking about that assuming those permits happen at some point and you are in a beneficial situation of being able to select between the two?

Peter Gerald Kukielski: For sure. It makes absolute sense to progress Cactus in sequence with Copper World because there are a lot of synergies between the two projects. As Andre mentioned, we would continue with updating the pre-feasibility study of Cactus, move from that into definitive feasibility, and get all the permits in place so that once Copper World Phase 1 is in production, we would be able to phase the construction of Cactus and bring that online subsequent to Copper World. For Phase 2, we would not want to apply for permits until Phase 1 is in operation because we do not want to get things mixed up.

It will take several years to get the permits for Phase 2, so it makes absolute sense to progress Cactus, and then Phase 2 would come in after Cactus.

Andre Lauzon: And Cactus is a little different than Copper World. At Copper World, a lot of CapEx is around building a facility and infrastructure. At Cactus, it is more of a stripping exercise leading into building an SX-EW plant. It is very low risk in terms of execution of moving material. It is about purchasing the fleet and executing the plant. So, as Peter said, there is a timing element and it almost naturally fits.

Operator: The next question is from Dalton Baretto with Canaccord Genuity. Please go ahead.

Dalton Baretto: Thanks. Good morning, guys. Staying on the sequencing theme between Copper World Phase 1 and Cactus, given what has been going on with sulfur and sulfuric acid pricing, demand for U.S.-made cathode, and the timing of the sequencing, has anything changed in your thinking as it relates to the feasibility study around the Albion facility?

Peter Gerald Kukielski: Great question. Nothing has really changed. The DFS is a continuation of the PFS, pretty well the same.

Andre Lauzon: What we could do is, during the update of the PFS for Cactus, take a look at the sequencing or the timing for the development of the Albion facility. That will be something that we look at as part of the Cactus PFS rather than the work that we are doing on Copper World right now. To build on that, the other project in Manitoba where we are looking at getting the gold out of the Flin Flon tails is progressing quite well with the studies. There is still more to go, but one of the byproducts there is also sulfur—molten sulfur and sulfur products.

There is lots of optionality in our portfolio to produce sulfur that would benefit the Cactus project, where ultimately what you are trying to get is acid for the heap leach. Whether it is advancing Albion, as you suggest, or producing a lot more gold in Manitoba and doing the other, we will evaluate all those at the right time.

Dalton Baretto: Understood. And then once the feasibility study drops midyear, outside of the financing package, what are some of the other gating items to get you to FID?

Peter Gerald Kukielski: Obviously, getting our partner on board. The partner is already on board in many respects, but they have their own internal approval process that we need to respect. There will be some time between the completion of the definitive feasibility study and the final investment decision in respect of what our partner needs.

Andre Lauzon: They are actively working with us. We are meeting with them. They absolutely do not want to be a barrier. We are all aligned on rock in the box and hitting that first production. They have been really great to work with, and we do not see any barrier to spending the money.

Eugene Lei: The $420 million that they deposited in January at close is being used to advance the feasibility study and will be the first capital spent when we FID this project.

Andre Lauzon: We do not see the FID being a barrier to rock in the box and first production. All the allowances we have made and the critical path items we are focusing on are keeping us on track.

Dalton Baretto: Great. Thanks. And finally, Peter, can you comment on some of the political developments in Peru right now and whether that is translating into any form of social unrest?

Peter Gerald Kukielski: The social landscape has been complicated since the unrest we saw last year. With the federal elections underway right now, there may continue to be periods of heightened social unrest. The general election was held on April 12, and from the initial voting, there is not yet a clear result of who the second candidate is. The first candidate, as everybody knows, is Keiko Fujimori. By mid-month, it probably becomes clear who the second candidate is. Frankly, federal elections do not really impact Hudbay Minerals Inc., as we have seen many different presidents since we started operations ten years ago. What has been constant in those years has been the stable fiscal regime, which we do not expect to change.

We have seen left-wing presidents, right-wing presidents, and everyone in between. Peru is a leading copper production nation globally, and the new president will recognize the importance of mining to the country. It will be business as usual for us. We have no concerns with respect to the upcoming election. I do not think it will result in heightened unrest. There may be bouts of it, but we are well positioned to deal with it.

Operator: The next question is from Stefan Ioannou with Cormark Securities. Please go ahead.

Stefan Ioannou: Hi, can you hear me okay? Maybe following on the Peru theme. In the slide, you mention preparing for Maria Reyna and Caballito exploration. I assume that involves more local social considerations. Is there any update on when we might be able to put a drill rig in the ground there?

Peter Gerald Kukielski: There are no changes to the remaining steps in the permitting process, which includes the government’s Previa process with the local community. With the election underway, that process is delayed. There are community elections later in the year. We think once those elections have been held, we will move forward towards getting the permits. Permits are delayed, but we think we are coming to the end of that period of delay as we move past the general election and the community elections, and then we probably see some movement towards the end of the year.

Stefan Ioannou: Okay, great. Thanks very much.

Operator: The next question is from Matthew Murphy with BMO. Please go ahead.

Matthew Murphy: Hi. I wanted to ask about the labor balance at Lalor. You mentioned it a few times. Some challenges in Q1—maybe you can elaborate on what you are seeing and how you are addressing it?

Andre Lauzon: Sure. There have been some challenges. They are not new; we have gone through this before. We saw a bit of a peak toward the end of Q1, and we are working through it now. We are bringing more people into the organization, and that takes a little time to train—more of a medium-term fix. In the very short term, the team is looking at the 1901 ore body, which we have been developing ourselves, and we have a lot of skilled employees there. The team is working on contracts with a mining contractor for that isolated area as a nice fit, and then we will redeploy our resources into the shortfalls within the mine.

There are several initiatives underway, but those are the main ones. We have this in hand. It is something we have done before. It is just a blip, and we are working through it.

Peter Gerald Kukielski: And, Matt, we were straightforward in the results release that we remain on track to achieve the annual production guidance ranges in Manitoba regardless of any labor issues and ups and downs that we might see. The team has it well in hand.

Andre Lauzon: We will still be within production and cost guidance, even with those extra costs.

Matthew Murphy: Got it. Okay. Thank you.

Operator: The next question is from Lawson Winder with Bank of America Securities. Please go ahead.

Lawson Winder: Thank you, operator, and good morning, Eugene and Andre. Thank you for today’s update. Could I ask about capital return? In light of the recently revamped capital return framework and the stronger balance sheet, and considering the growth capital needs and the buyback renewal approval, can we consider the probability that Hudbay Minerals Inc. might be more active in the buyback in 2026 as a higher probability than in 2025 when the buyback was not acted upon at all?

Eugene Lei: Hi, Lawson. I can take that question. We look at this holistically, and the capital allocation framework was meant to provide us, beyond that 3P plan, the way to advance the company. With the framework, we are able to do three things: fund the development of Copper World, reduce debt with a goal of less than 1x net debt to EBITDA through the life cycle of the build, and fund generational investments in brownfield projects at each of our operating sites. Given the progress we have made on the balance sheet, we are able to consider shareholder returns well ahead of our goal to be a meaningful dividend payer with the development of Copper World.

We started thinking about that earlier this year with the capital allocation framework, and the first step was increasing our dividend. It was a nominal increase, but it was the first dividend increase we have had in our history. We would like to ramp into that if we have the opportunity and if these prices were to hold, while making generational investments and providing shareholder returns. The NCIB was put in place as good housekeeping, as a tool to smooth market volatility. It is something we want to be able to access at the right time. We are not committing to any set dollar amount of share buybacks at this time.

We do not think that is the right way to set our capital allocation priorities, particularly during the year of sanctioning at Copper World. If we have the opportunity to have excess capital at the end of the year, we can relook at the dividend and see if we can enhance that as part of the whole capital allocation framework.

Peter Gerald Kukielski: I would also add that we want to have all options available to us, but right now the most important thing for us is delivery. I am confident that the culture of consistent operational and financial delivery that we are building will ensure we are the gold standard in the copper space, as we referred to in our release.

Lawson Winder: Thank you. One other follow-up on capital return: I am not entirely clear on the potential spending at Mason. You are advancing plans to initiate a pre-feasibility study. Can you remind us what you think you are going to spend in 2026 on Mason? Could that change? Is there a range, or is it fixed?

Eugene Lei: We are starting that process, and approximately $20 million is allocated to advancing Mason this year. That will be expensed, as it is not yet in reserve. That is essentially a fixed budget number. There is not much we can increase that by in terms of moving ahead. We are starting the pre-feas and that will take the better part of a year or two.

Andre Lauzon: It is mostly studies—studies, some drilling, some geotech, hydrology.

Lawson Winder: Okay. Fantastic. Thank you all very much.

Operator: The next question is from Analyst with Haywood. Please go ahead.

Analyst: Thanks. Peter or Andre, following on the discussion with respect to sequencing in Arizona, do you feel comfortable giving a date in terms of production start for Copper World, for Cactus, and for Phase 2, just to give us a broad sense of what this is going to look like over the long term?

Peter Gerald Kukielski: Sure. Copper World targeted dates will be released with the DFS, but it is pretty well mid-2029 for rock in the box. Cactus would be sometime after that. As Andre said, Cactus is more an earthmoving effort than anything else. We have to move rock, do some stripping, develop the heap leach piles, and then build an SX-EW plant. There could be concurrent activity on mining between one and the other, but it remains to be seen during the PFS update what that will look like and the actual sequencing.

Andre Lauzon: We are not slowing down Cactus studies. We will move those forward as fast as we can. Depending on where we are with Copper World, metal prices, and all that, we could start stripping—things that are very straightforward—while we are doing detailed engineering. We want to keep that optionality open.

Analyst: Understood. On overlap, if you start in mid-2029 at Copper World, would you consider a start-up at Cactus within 18 to 24 months of that start-up, or do you need longer lead time?

Andre Lauzon: That is possible and reasonable. Pre-feasibility is roughly a year and feasibility is another year. Layer on concurrent permitting updates. One thing we do know is you have to strip rock, and at the right time that costs money. How Copper World is going, where metal prices are, and permits in hand will drive timing. We are not slowing anything with Cactus. We want everything ready as fast as possible. It is optionality for us. In the next five years, we could potentially triple copper production and Cactus is a key part of it.

Peter Gerald Kukielski: In terms of Phase 2, we will apply for permits pretty quickly once Phase 1 is up and running. The question is the duration of permitting. It will certainly take longer to permit Phase 2 than to bring Cactus into production. Phase 2 is not a massive effort, and there are nice surprises in Phase 1 that will come out.

Analyst: And finally on New Ingerbelle, what are the implications of bringing New Ingerbelle on in 2028 from a production perspective?

Peter Gerald Kukielski: For gold, it is basically more gold and mine life. It is roughly double the gold grade of what we are currently producing.

Andre Lauzon: There is some stripping that goes along with it, but it is a great cash flow generator for us, particularly at these metal prices, and with about a third of the stripping ratio of current areas.

Eugene Lei: The average gold production with New Ingerbelle essentially doubles from about 20 thousand ounces of gold per annum to about 40 thousand ounces per annum. It would be a very nice complement to the consistent copper production, and the mine life of New Ingerbelle on a reserve basis today is ten years. We started drilling at New Ingerbelle and expect to convert a lot of the inferred, so we are likely to see something much closer to double that mine life as we continue to drill and convert that resource.

Analyst: Alright. Okay. Thanks.

Operator: This concludes the question-and-answer session. I would like to turn the conference back over to Candace Brule for any closing remarks.

Candace Brule: Thank you, operator, and thank you, everyone, for participating today. If you have any further questions, please feel free to reach out to our Investor Relations team. Thank you and have a great day.

Operator: This brings to a close today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.