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Hudbay Announces 2013 Production Guidance and Capital and

Hudbay Announces 2013 Production Guidance and Capital and Exploration
Expenditure Forecasts 
Highlights  
- Capital investment forecast of approximately $1.24 billion,
including $1.16 billion in growth initiatives 
- Investment in exploration of $40 million, intended to fund
approximately 75,000 metres of drilling primarily focused near
existing and planned processing infrastructure in Manitoba and Peru 
- Commercial production from the initial workings at Lalor expected
to be declared in the second quarter of 2013 
- Contained zinc production in concentrate expected to increase over
2012 levels due to the full year of production expected from the main
ventilation shaft at Lalor 
TORONTO, ONTARIO -- (Marketwire) -- 01/09/13 -- HudBay Minerals Inc.
("Hudbay" or the "company") (TSX:HBM)(NYSE:HBM) today released its
production guidance along with its exploration and capital
expenditure forecasts for 2013. 
Full year 2012 production of all metals met Hudbay's published 2012
guidance, representing the sixth consecutive year that the company
has met its production targets. Contained copper production in
concentrate in 2013 is expected to decrease slightly over 2012
because of the closures of the Trout Lake and Chisel North mines in
2012 following the end of their mine lives. Contained zinc production
in concentrate in 2013 is expected to increase over 2012 levels, due
to the full year of production expected from the main ventilation
shaft at Lalor. Precious metal production is expected to remain
essentially unchanged from 2012 levels. 


 
Contained Metal in                                                          
 Domestic                                 2013        2012              2012
 Concentrate(1)                       Guidance  Production          Guidance
--------------------        ------------------------------------------------
Copper                Tonnes   33,000 - 38,000      39,587   35,000 - 40,000
Zinc                  Tonnes  85,000 - 100,000      80,866   70,000 - 85,000
Precious Metals(2)    Ounces  85,000 - 105,000     101,059  85,000 - 105,000
(1)  Metal reported in concentrate is prior to refining losses or deductions
     associated with smelter terms                                          
(2)  Precious metals production includes gold and silver production. Silver 
     converted to gold at a ratio of 50:1 for 2012 and 2013 guidance. For   
     2012 production, silver converted to gold at 57:1, based on estimated  
     2012 realized sales prices.                                            

 
Lalor Concentrator to Start Construction, Production Shaft Sinking
Expected to Finish in 2013 
As of November 30, 2012, Hudbay has invested approximately $316.5
million of the $704 million capital construction budget for its
wholly owned Lalor project near Snow Lake, Manitoba and has entered
into an additional $89.7 million in commitments for the project.
Capital expenditures at Lalor in 2013 are expected to total
approximately $163 million. 
During the third quarter of 2012, Hudbay commissioned the hoisting
system in the main ventilation shaft, which is now capable of
hoisting 1,400 tonnes of combined ore and waste per day. First ore
production from the base metal lens #10 began in August, and
approximately 72,000 tonnes of ore were hoisted from August to the
end of the year. The main production shaft is now sunk to
approximately 434 metres and is 44% complete. Shaft sinking is
expected to be complete in the third quarter of 2013. 
Lalor ore will be processed at the nearby Snow Lake concentrator
until completion of the production shaft and new concentrator, which
is expected in late 2014.  
Basic engineering for the new concentrator is ongoing with value
engineering reviews and design optimization underway. Construction of
the new concentrator is expected to begin in the third quarter of
2013, subject to receipt of required permits. Lalor's main substation
is expected to be completed in the fourth quarter of 2013. The first
full year of production is expected in 2015. 
Hudbay has submitted an application for an Environmental Act licence
for the Lalor mine, which would allow for production from the main
production shaft. The company expects to submit applications for
Environmental Act licences for the new concentrator and tailings
facility expansion in the first quarter of 2013 and the fourth
quarter of 2013, respectively.  
Given the nature of the Lalor project, Hudbay expects to refer to two
phases of the Lalor project when determining commercial production
for accounting purposes. The first phase of the project is expected
to include the main ventilation shaft and associated surface and
underground workings that will contribute to the production of ore
between 2012 and 2014. Hudbay expects to achieve commercial
production for accounting purposes for the first phase in the second
quarter of 2013. The second phase of the project is expected to
include the main production shaft and the new Lalor concentrator, and
the company expects to achieve commercial production for accounting
purposes for the second phase in the first half of 2015. 
Construction Activities to Continue at Constancia in 2013 
Of the company's US$1.5 billion capital construction budget for its
wholly owned Constancia project in Peru, Hudbay has invested
approximately US$257 million on the project to November 30, 2012 and
has entered into an additional US$672 million in commitments for the
project. Capital expenditures at Constancia are expected to total
approximately $901 million in 2013. The Constancia development
schedule contemplates nine quarters of construction, with initial
production in late 2014 and full production commencing in the second
quarter of 2015.  
Site activity to date includes substantial completion of 2,800 beds
in the construction camp, which is scheduled to expand to 3,500 beds
by early 2013 to accommodate peak construction needs. Hudbay's major
earthworks contractor has mobilized and is currently constructing the
tailings management facility, haul roads and water diversion
infrastructure. The access roads for heavy haulage are expected to be
completed in the second quarter of 2013, with the tailings management
and waste rock facilities completed in the third quarter of 2013.  
The Pampacancha feasibility study is underway and further
characterization of geotechnical and hydrogeological information will
be incorporated in the study. 
Major long lead items are secured and include mills, crushers,
flotation cells, pumps, regrind mills and mine equipment, including
trucks, shovels and drills. Pre-stripping activities are scheduled to
be initiated in the fourth quarter of 2013 along with the completion
of the primary crusher mechanical installation and the SAG mills. A
procurement contract for tires is expected to be executed in the near
future. In addition, a contract was executed for the construction of
the 70 kilometre power transmission line from Tintaya. The principal
port operator has provided assurances that the concentrate shipments
can be accommodated and discussions are currently focused on
optimizing the storage and loading methodologies. 
In accordance with agreements entered into with local communities,
relocation of affected families is underway with the construction of
new housing in progress. Thirteen families have received their new
homes and are in the process of moving. The remaining 23 families are
scheduled to be relocated in 2013.  
First Production at Reed Expected in 2013 
Of the company's $72 million capital construction budget for its 70%
owned Reed copper project in northern Manitoba, Hudbay has invested
approximately $19.7 million on the project to November 30, 2012 and
has entered into an additional $17.8 million in commitments for the
project. Capital expenditures at Reed are expected to total
approximately $44 million in 2013. After completing the first portal
development round in October 2012, the underground ramp has advanced
approximately 72 metres. Hudbay has submitted the Environmental Act
licence application for Reed to the provincial government. Initial
production is expected by the fourth quarter of 2013 and full
production of approximately 1,300 tonnes of ore per day is expected
by the first quarter of 2014. 


 
Capital Expenditures                                           2013 Forecast
                                                                 C$ Millions
Growth                                                                      
Lalor                                                                    163
Constancia                                                               901
Reed                                                                      44
Capitalized Interest and Other                                            49
----------------------------------------------------------------------------
Total Growth Capital                                                   1,157
  Sustaining                                                              78
----------------------------------------------------------------------------
Total Capital Expenditures                                             1,235

 
Hudbay is well positioned to fund its projects with cash and cash
equivalents of $1,499 million as at September 30, 2012 together with
approximately US$485 million in other committed funding sources.  
Exploration Budget 
Hudbay has budgeted exploration expenditures of $40 million, more
than half of which is focused on brownfield opportunities near the
company's existing deposits. 
The company's total exploration budget will enable approximately
55,000 metres of drilling in the Flin Flon Greenstone Belt,
approximately 10,000 metres in Peru and approximately 10,000 metres
in greenfield projects in North and South American areas, including
Chile and Colombia. Within the Flin Flon Greenstone Belt, Hudbay
intends to explore near its active and historical mining areas. 
In Peru, Hudbay expects to continue exploration activities at
Constancia, where its focus is to expand the current resource outside
the Constancia reserve pit shell. The company also expects to
continue drilling the Chilloroya South skarn target and geophysical
anomaly, where favourable geology has been intersected in several
drill holes, showing various thicknesses of mineralized skarn.  


 
Total Exploration Expenditures                                  2013 Budget 
                                                                C$ Millions 
Manitoba                                                               20.2 
South America                                                          18.2 
Other North America                                                     1.6 
----------------------------------------------------------------------------
Total Exploration Expenditures                                         40.0 
  Manitoba Capitalized Spending                                        (4.4)
  Manitoba Investment Tax Credits                                      (0.5)
----------------------------------------------------------------------------
Total Exploration Expense                                              35.1 
----------------------------------------------------------------------------

 
Mines 


 
2013 Production Guidance                      777(1)    Lalor(2)     Reed(2)
------------------------------          ------------------------------------
                                                                            
Ore Mined                         Tonnes   1,620,000     418,000      51,000
                                                                            
Grades                                                                      
Copper                                 %        2.18        0.54        3.43
  Zinc                                 %        4.41        9.89        1.18
  Gold                               g/t        1.94        1.23        0.72
  Silver                             g/t       30.89       17.70        8.80
Unit Operating Costs            C$/tonne     38 - 42     75 - 95            
                                                                            
(1)  777 production guidance includes 777 and 777 North                     
(2)  Revenues and costs from Lalor and Reed operations prior to commencement
     of commercial production will be capitalized. Lalor unit operating cost
     guidance is for periods following commercial production.               

 
Steady production is expected in 2013 from Hudbay's flagship 777
mine, including contributions from the 777 North expansion beginning
in the first quarter of 2013. Operating costs are expected to be
similar to costs experienced in the past several years as a result of
ongoing productivity efforts. As in past years, costs in the first
and fourth quarters are expected to be higher due to additional
heating and other seasonal costs.  
Hudbay expects its first full year of production at Lalor from the
main ventilation shaft, with commercial production expected to be
declared in the second quarter of 2013. Production will continue from
the zinc-rich base metal lens #10.  
Initial production at the Reed copper project is expected by the
third quarter of 2013, subject to receipt of required permits, with
51,000 tonnes of ore expected to be mined in 2013. 
Grades and recoveries in any particular quarter may vary from the
annual guidance based on the areas mined in that quarter and other
factors. Mining and processing costs in any particular quarter can
also vary from the annual guidance above based on a variety of
factors including the scheduling of maintenance events and seasonal
heating requirements. 
Flin Flon and Snow Lake Concentrators 


 
2013 Guidance                                          Flin Flon   Snow Lake
                                                    ------------------------
                                                                            
Ore Milled                                    Tonnes   1,719,000     369,000
                                                                            
Recoveries                                                                  
  Copper                                           %          92          82
  Zinc                                             %          85          95
  Gold                                             %          69          65
                                                                            
Unit Operating Costs(1)                     C$/tonne     12 - 16     25 - 30
                                                                            
(1)  Forecast unit operating costs are calculated on the same basis as      
     reported unit operating costs in Hudbay's quarterly and annual         
     management's discussion and analysis.                                  

 
Ore milled at the Flin Flon concentrator is expected to be somewhat
lower than in 2012 due to the planned closure of the Trout Lake mine
during 2012. Unit operating costs are expected to be in line or
slightly higher than 2012 due to reduced throughput. Recoveries are
expected to be consistent with the prior year. Estimated concentrate
production at the Snow Lake concentrator includes a full year of
Lalor ore from the zinc-rich base metal lens #10. Unit operating
costs for the Snow Lake concentrator, which include the cost to truck
concentrates from Snow Lake to Flin Flon, are expected to be lower
than 2012 due to higher throughput levels.  
Flin Flon Zinc Plant 


 
2013 Guidance                                                               
                                                                            
Domestic zinc concentrate treated                       tonnes       199,000
Purchased zinc concentrate treated                      tonnes         2,600
----------------------------------------------------------------------------
Total zinc concentrate treated                          Tonnes       201,600
                                                                            
Recovery                                                     %            97
Zinc metal produced                                     tonnes       101,000
                                                                            
Unit Operating Costs(1)                                  C$/lb   0.33 - 0.39
                                                                            
(1)  Forecast unit operating costs are calculated on the same basis as      
     reported unit operating costs in Hudbay's quarterly and annual         
     management's discussion and analysis.                                  

 
Hudbay's domestic zinc concentrate production in 2013, together with
total year-end zinc concentrate inventory of approximately 18,000
tonnes is expected to result in zinc plant production at levels
consistent with 2012 results. The company does not expect to require
new third party purchased concentrate to achieve these production
levels. Operating costs at the zinc plant in 2013 are expected to be
comparable to 2012 levels.  
Forward-Looking Information 
This news release contains "forward-looking statements" and
"forward-looking information" (collectively, "forward-looking
information") within the meaning of applicable Canadian and United
States securities legislation. All information contained in this news
release, other than statements of current and historical fact, is
forward-looking information. Forward-looking information includes
information that relates to, among other things, our objectives,
strategies, and intentions and future financial and operating
performance and prospects. Often, but not always, forward-looking
information can be identified by the use of words such as "plans",
"expects", "budget", "guidance", "scheduled", "estimates",
"forecasts", "strategy", "target", "intends", "objective", "goal",
"understands", "anticipates" and "believes" (and variations of these
or similar words) and statements that certain actions, events or
results "may", "could", "would", "should", "might" "occur" or "be
achieved" or "will be taken" (and variations of these or similar
expressions). All of the forward-looking information in this news
release is qualified by this cautionary statement. 
Forward-looking information includes, but is not limited to,
continued production at Hudbay's 777 and Lalor mines, continued
processing at Hudbay's Flin Flon concentrator, Snow Lake concentrator
and Flin Flon zinc plant, Hudbay's ability to develop its Lalor,
Constancia and Reed projects and the anticipated scope of, cost of
and development plans for, these projects, anticipated timing of
Hudbay's projects and events that may affect our projects, Hudbay's
expectation that it will receive the remaining US$250 million deposit
under the precious metals stream transaction with Silver Wheaton
Corp., the anticipated effect of external factors on revenue, such as
commodity prices, anticipated exploration and development
expenditures and activities and the possible success of such
activities, estimation of mineral reserves and resources, mine life
projections, timing and amount of estimated future production,
reclamation costs, economic outlook, government regulation of mining
operations, and business and acquisition strategies. 
Forward-looking information is not, and cannot be, a guarantee of
future results or events. Forward-looking information is based on,
among other things, opinions, assumptions, estimates and analyses
that, while considered reasonable by us at the date the
forward-looking information is provided, inherently are subject to
significant risks, uncertainties, contingencies and other factors
that may cause actual results and events to be materially different
from those expressed or implied by the forward-looking information.
The material factors or assumptions that Hudbay identified and were
applied by it in drawing conclusions or making forecasts or
projections set out in the forward looking information include, but
are not limited to: 


 
--  the success of mining, processing, exploration and development
    activities; 
--  the accuracy of geological, mining and metallurgical estimates; 
--  the costs of production; 
--  the supply and demand for metals Hudbay produces; 
--  the volatility of commodity prices; 
--  the volatility in foreign exchange rates; 
--  the supply and availability of concentrate for Hudbay's processing
    facilities; 
--  the supply and availability of reagents for Hudbay's concentrators; 
--  the availability of third party processing facilities for Hudbay's
    concentrate; 
--  the supply and availability of all forms of energy and fuels at
    reasonable prices; 
--  the availability of transportation services at reasonable prices; 
--  no significant unanticipated operational or technical difficulties; 
--  the availability of financing for Hudbay's exploration and development
    projects and activities; 
--  the ability to complete project targets on time and on budget and other
    events that may affect our ability to develop its projects; 
--  the timing and receipt of various regulatory and governmental approvals;
--  the availability of personnel for Hudbay's exploration, development and
    operational projects and ongoing employee relations; 
--  maintaining good relations with the communities in which Hudbay
    operates, including the communities surrounding its Constancia project; 
--  no significant unanticipated challenges with stakeholders at our various
    projects; 
--  no significant unanticipated events relating to regulatory,
    environmental, health and safety matters; 
--  no contests over title to Hudbay's properties, including as a result of
    rights or claimed rights of aboriginal peoples; 
--  the timing and possible outcome of pending litigation and no significant
    unanticipated litigation; 
--  any assumptions related to taxes, including, but not limited to current
    tax laws and regulations; and 
--  no significant and continuing adverse changes in general economic
    conditions or conditions in the financial markets. 

 
The risks, uncertainties, contingencies and other factors that may
cause actual results to differ materially from those expressed or
implied by the forward-looking information may include, but are not
limited to, risks generally associated with the mining industry, such
as economic factors (including future commodity prices, currency
fluctuations and energy prices), uncertainties related to the
development and operation of Hudbay's projects, depletion of Hudbay's
reserves, risks related to political or social unrest or change and
those in respect of aboriginal and community relations and title
claims, operational risks and hazards, including unanticipated
environmental, industrial and geological events and developments and
the inability to insure against all risks, failure of plant,
equipment, processes, transportation and other infrastructure to
operate as anticipated, compliance with government and environmental
regulations, including permitting requirements and anti-bribery
legislation, dependence on key personnel and employee relations,
volatile financial markets that may affect Hudbay's ability to obtain
financing on acceptable terms, uncertainties related to the geology,
continuity, grade and estimates of mineral reserves and resources and
the potential for variations in grade and recovery rates, uncertain
costs of reclamation activities, Hudbay's ability to comply with its
pension and other post-retirement obligations, Hudbay's ability to
abide by the covenants in its debt instruments, as well as the risks
discussed under the heading "Liquidity and Capital Resources" in
Hudbay's MD&A dated November 1, 2012 and the risks discussed under
the heading "Risk Factors" in Hudbay's most recent Annual Information
Form, Form 40-F and MD&A dated August 14, 2012. 
Should one or more risk, uncertainty, contingency or other factor
materialize or should any factor or assumption prove incorrect,
actual results could vary materially from those expressed or implied
in the forward-looking information. Accordingly, you should not place
undue reliance on forward-looking information. Hudbay does not assume
any obligation to update or revise any forward-looking information
after the date of this news release or to explain any material
difference between subsequent actual events and any forward-looking
information, except as required by applicable law.  
Note to United States Investors 
Information concerning Hudbay's mineral properties has been prepared
in accordance with the requirements of Canadian securities laws,
which differ in material respects from the requirements of Securities
and Exchange Commission (the "SEC") Industry Guide 7.  
Under SEC Industry Guide 7, mineralization may not be classified as a
"reserve" unless the determination has been made that the
mineralization could be economically and legally produced or
extracted at the time of the reserve determination, and the SEC does
not recognize the reporting of mineral deposits which do not meet the
United States Industry Guide 7 definition of "Reserve". 
In accordance with National Instrument 43-101 - Standards of
Disclosure for Mineral Projects ("NI 43-101") of the Canadian
Securities Administrators, the terms "mineral reserve", "proven
mineral reserve", "probable mineral reserve", "mineral resource",
"measured mineral resource", "indicated mineral resource" and
"inferred mineral resource" are defined in the Canadian Institute of
Mining, Metallurgy and Petroleum (the "CIM") Definition Standards for
Mineral Resources and Mineral Reserves adopted by the CIM Council on
December 11, 2005.  
While the terms "mineral resource", "measured mineral resource",
"indicated mineral resource" and "inferred mineral resource" are
recognized and required by NI 43-101, the SEC does not recognize
them. You are cautioned that, except for that portion of mineral
resources classified as mineral reserves, mineral resources do not
have demonstrated economic value. Inferred mineral resources have a
high degree of uncertainty as to their existence and as to whether
they can be economically or legally mined.  
It cannot be assumed that all or any part of an inferred mineral
resource will ever be upgraded to a higher category. Therefore, you
are cautioned not to assume that all or any part of an inferred
mineral resource exists, that it can be economically or legally
mined, or that it will ever be upgraded to a higher category.
Likewise, you are cautioned not to assume that all or any part of
measured or indicated mineral resources will ever be upgraded into
mineral reserves. You are urged to consider closely the disclosure on
the technical terms in Schedule A "Glossary of Mining Terms" of
Hudbay's annual information form for the fiscal year ended December
31, 2011, available on SEDAR at www.sedar.com and incorporated by
reference as Exhibit 99.1 in Hudbay's Form 40-F filed on April 2,
2012 (File No. 001-34244). 
About Hudbay  
Hudbay (TSX:HBM)(NYSE:HBM) is a Canadian integrated mining company
with assets in North and South America principally focused on the
discovery, production and marketing of base and precious metals.
Hudbay's objective is to maximize shareholder value through efficient
operations, organic growth and accretive acquisitions, while
maintaining its financial strength. A member of the S&P/TSX Composite
Index and the S&P/TSX Global Mining Index, Hudbay is committed to
high standards of corporate governance and sustainability. Further
information about Hudbay can be found on www.hudbayminerals.com. 
Contacts:
HudBay Minerals Inc.
John Vincic, Vice President,
Investor Relations and Corporate Communications
(416) 362-0615
john.vincic@hudbayminerals.com
www.hudbayminerals.com
 
 
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