Hudbay Delivers Operational Resilience and Cost Leadership Amidst Third Quarter Challenges

Improved Cost Guidance Reflects Strong Operational Control

Despite a turbulent quarter marked by wildfires in Manitoba and operational interruptions in Peru, Hudbay (TSX, NYSE: HBM) reaffirmed its status as a cost leader. The company achieved a consolidated cash cost of $0.42 per pound of copper and a sustaining cash cost of $2.09, outperforming previous guidance. For the full year, Hudbay lowered its cash cost guidance range to $0.15–$0.35 per pound—down significantly from previous expectations. Sustaining cash cost guidance also improved to $1.85–$2.25 per pound. These figures reflect Hudbay’s ability to adapt to adversity while focusing on cost control and operational efficiencies.

Production Remains Stable Despite Weather and Social Disruptions

Hudbay reported consolidated copper production of 24,205 tonnes and gold production of 53,581 ounces for the third quarter, showing resilience given the suspension of Manitoba operations and a nine-day shutdown in Peru. Notably, Peru's gold production exceeded quarterly cadence expectations, supporting robust by-product credits and reinforcing the cost advantage.

Regionally Tailored Performance and Guidance

Peru: The Peru operations navigated social unrest with quick adjustments to mine sequencing and ore feed, leading to strong gold output and improved cost performance. Cash costs in Peru came in at $1.30 per pound of copper—better than the low end of the local guidance range. With strong post-quarter production, Peru is expected to meet copper guidance and surpass gold guidance for the year.

Manitoba: Manitoba’s production was curtailed by extended wildfire evacuations and October storm outages. Despite lower volumes, the unit maintained low cash costs—$379/oz gold in Q3—and continues to prioritize gold over zinc due to ongoing strong gold market support. Full year gold output in Manitoba is expected to finish slightly below the low end of guidance, but cost performance remains strong.

British Columbia: Mill improvements at Copper Mountain progressed, but unplanned maintenance reduced throughput, raising costs to $3.21 per pound for copper in Q3. Copper production for the year is forecast to be below the guidance range, but Hudbay expects to keep costs within target ranges as the final phase of mill upgrades completes in December 2025.

* Manitoba primarily reports gold cash cost: $379/oz in Q3 2025.

Strategic Initiatives Strengthen Growth Prospects and Balance Sheet

Hudbay’s third quarter saw pivotal moves for long-term growth. The company secured a $600 million partnership with Mitsubishi for a 30% interest in the Copper World project, bringing in capital and reducing future spending requirements. Engineering on Copper World continues, targeting a definitive feasibility study in mid-2026. In Snow Lake, extensive exploration is underway, and infrastructure at Copper Mountain is advancing as planned.

Hudbay continued to pay down debt—retiring $13.2 million in Q3, plus $20 million post-quarter—reducing net debt to $435.9 million and further lowering the net debt to adjusted EBITDA ratio to 0.5x.

Takeaway: Outlook Supported by Low Costs, Liquidity, and Growth Path

Hudbay’s Q3 results reinforce the company’s reputation for operational discipline, resilience, and growth-focused capital allocation. Despite production headwinds, Hudbay improved its cost profile, bolstered liquidity, and secured strategic partnerships, positioning it to weather ongoing industry volatility and capitalize on long-term copper demand. Investors will want to watch for further milestones on the Copper World feasibility study and operational improvements across all regions as 2025 concludes.

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