TORONTO, Aug. 13, 2024 (GLOBE NEWSWIRE) -- Hudbay Minerals Inc. ("Hudbay" or the "company") ((TSX, NYSE:HBM) today released its second quarter 2024 financial results. All amounts are in U.S. dollars, unless otherwise noted. All production and cost amounts reflect the Copper Mountain mine on a 100% basis, with Hudbay owning a 75% interest in the mine. "The continued execution of our operational plans in the second quarter has positioned us well to achieve our 2024 production guidance, and our exposure to gold by-products and strong cost control have allowed us to improve our 2024 cash cost guidance," said Peter Kukielski, President and Chief Executive Officer. "Our strong and diversified operating base continues to generate free cash flow driven in part by efficient milling performance in Peru and Manitoba. We are also continuing to execute our British Columbia stabilization plans and planned stripping programs in Peru and British Columbia to unlock higher copper and gold grades in the near-term. This has led to robust EBITDA generation over the past 12 months, which together with our recent successful equity offering, has allowed us to significantly accelerate our deleveraging efforts and transform our balance sheet. We are now even better positioned to continue to advance our many growth initiatives to unlock significant upside potential in our pipeline and further enhance our copper and gold exposure." Delivered In-line Second Quarter Operating and Financial Results; Production Guidance Reaffirmed and Cash Cost Guidance Improved Achieved consolidated copper production of 28,578 tonnes and gold production of 58,614 ounces in the second quarter of 2024, in line with quarterly production cadence expectations for 2024. Enhanced operating platform delivered a 32% increase in copper production and a 20% increase in gold production over the second quarter of 2023ii, reflecting the benefits of a larger diversified operating platform with the addition of Copper Mountain and the continued execution of operational efficiencies across the business. Strong cost control with consolidated cash costi and sustaining cash costi per pound of copper produced, net of by-product creditsi, in the second quarter of 2024 of $1.14 and $2.65, respectively, in alignment with the cadence of costs expected in 2024. Reaffirmed full year 2024 consolidated production guidance for all metals including 137,000 to 176,000 tonnes of copper and 263,000 to 319,000 ounces of gold as the company expects stronger production in the second half of 2024 in accordance with the mine production profile. Improved 2024 annual operating cost guidance with decreased consolidated cash costi guidance range of $0.90 to $1.10 per pound, a result of meaningful exposure to gold by-product credits and continued strong cost control. Peru operations continued to benefit from strong mill throughput, averaging approximately 85,000 tonnes per day in the second quarter despite a planned semi-annual mill maintenance shutdown. The Pampacancha stripping program to advance to higher grades later this year is well underway. The reduced mining from Pampacancha resulted in 19,217 tonnes of copper and 10,672 ounces of gold produced in the second quarter of 2024, in line with quarterly cadence expectations. Peru cash cost per pound of copper produced, net of by-product creditsi, in the second quarter was $1.78, an expected increase from the first quarter given lower planned production levels, and a 17% decrease compared to the second quarter of 2023. Manitoba operations produced 43,488 ounces of gold in the second quarter of 2024 as New Britannia continues to operate well above nameplate capacity and budgeted throughput levels. Manitoba cash cost per ounce of gold produced, net of by-product creditsi, was $771 during the second quarter of 2024, similar to the first quarter, and a decrease of 30% compared to the same quarter last year. British Columbia operations produced 6,719 tonnes of copper at a cash cost per pound of copper produced, net of by-product creditsi, of $2.67 in the second quarter. Cash cost improved by 23% over the first quarter, reflecting ongoing operational stabilization efforts as mine stripping activities are accelerated and mill improvement initiatives are underway at Copper Mountain. Achieved revenue of $425.5 million and operating cash flow before change in non-cash working capital of $122.0 million in the second quarter of 2024. Second quarter net loss attributable to owners and loss per share attributable to owners were $16.6 million and $0.05, respectively. After adjusting for items on a pre-tax basis such as a non-cash gain of $2.7 million related to a quarterly revaluation of the company's closed site environmental reclamation provision, a $10.7 million revaluation loss related to the gold prepayment liability, unrealized strategic gold and copper hedges and investments and a $2.1 million write-down of PP&E, among other items, second quarter adjusted earningsi per share attributable to owners was nil. Net loss attributable to owners of $16.6 million in the second quarter was meaningfully impacted by tax expense of $20.8 million despite having earnings before tax of only $0.4 million. The elevated tax expense was due to mining taxes that are calculated based on taxable mining profits in each operating jurisdiction, the limited deductibility of certain expenses and foreign exchange fluctuations on deferred tax balances. Adjusted EBITDAi was $145.0 million during the second quarter of 2024. Cash and cash equivalents and short-term investments increased by $274.0 million to $523.8 million during the first half of 2024 due to a successful equity offering and strong operating cash flows bolstered by higher copper and gold prices, enabling a $405.9 million reduction in net debti during the first half of 2024. Accelerated Deleveraging and Transformed Balance Sheet Hudbay's unique copper and gold diversification in Peru and North America provides exposure to higher copper and gold prices and attractive free cash flow generation. Achieved trailing 12 month adjusted EBITDAi of $824.3 million, a substantial increase from $407.1 million for the 12 months ending June 30, 2023. Completed successful equity offering on May 24, 2024 for gross proceeds of $402.5 million and net proceeds of $386.2 million, net of transaction costs, to accelerate growth and deleveraging. Significantly accelerated deleveraging efforts. Repaid all $90.0 million of advances outstanding on the senior secured credit facilities during the second quarter of 2024 and made open market purchases of approximately $34.1 million of the company's senior unsecured notes in June 2024, at a discount. Long-term debt reduced to $1,155.6 million at June 30, 2024 from $1,278.6 million at March 31, 2024. Reduced net debti to $631.8 million in the second quarter of 2024, reflecting a reduction of $405.9 million over the first half of 2024. The increase in cash and reduction in long-term debt significantly reduced net debt to adjusted EBITDAi to 0.8x at June 30, 2024 compared to 1.6x at the end of 2023. Achieved the targeted 1.2x net debt to adjusted EBITDAi ratio outlined in the three prerequisites plan (the "3-P plan") for advancing Copper World well ahead of schedule. Deleveraging efforts continued into the third quarter of 2024 with an additional $48.5 million of open market purchases of the company's senior unsecured notes in July and August. Scheduled to complete the final payment under the gold prepay liability in August 2024, which was the financing instrument used to fund the refurbishment of the New Britannia gold mill. The elimination of the gold prepay will further increase the company's exposure to higher gold production in Snow Lake. Total liquidity substantially increased by 65% to $948.5 million at June 30, 2024 from $573.7 million at the end of 2023. Continued Execution of Growth Initiatives to Further Enhance Copper and Gold Exposure Successfully ratified multi-year agreements with the unions representing members of Hudbay's workforce in Peru and Manitoba, with no disruption to operations, demonstrating the company's focus on working closely with its employees and community stakeholders to ensure aligned economic and social benefits. Stripping program for the next mining phase at Pampacancha is underway and is expected to lead to significantly higher copper and gold grades in the fourth quarter of 2024, which together with maintaining strong operating performance at Constancia is expected to continue to generate meaningful free cash flow in Peru. The New Britannia mill continued to exceed expectations, driving higher gold production in Manitoba. The mill achieved record throughput levels of nearly 2,100 tonnes per day in June and averaged 1,850 tonnes per day in the second quarter, exceeding its original design capacity of 1,500 tonnes per day and its 2024 budgeted capacity of 1,800 tonnes per day due to the successful implementation of process improvement initiatives and effective preventative maintenance measures. Post-acquisition plans to stabilize the Copper Mountain operations remain in progress with a focus on mining fleet ramp-up activities, accelerated stripping and increasing mill reliability. Higher mill availability of 94% and better-than-planned copper recoveries of 82% were achieved in the second quarter of 2024. The development of an access drift to the 1901 deposit in Snow Lake remains on track to reach mineralization in early 2025 and is intended to enable confirmation of the optimal mining method for the deposit and underground drilling to further evaluate the orebody and upgrade inferred gold resources to reserves. Continued to progress the 3-P plan for sanctioning Copper World, with transformed balance sheet nearing targeted levels and remaining key state permits progressing on track and expected in 2024. Drill permitting for highly prospective Maria Reyna and Caballito properties near Constancia continues to advance through the multi-step regulatory process with the environmental impact assessment application approved for Maria Reyna in June and the Caballito application progressing through the review stage. Results from the winter 2024 exploration program in Snow Lake confirm two mineralized zones located 400 metres northwest of Lalor with an intersection of 9 metres grading 2.88% copper and 6.27 grams per tonne gold. Also identified follow-up targets for a summer 2024 drill program to test new geophysical anomalies, complete follow-up drilling at Lalor Northwest and complete regional drilling at the Snow Lake satellite properties. Continuing to advance Flin Flon tailings reprocessing opportunities through metallurgical test work and early economic evaluation to assess the possibility of producing critical minerals and precious metals while reducing the environmental footprint. Published 2023 annual sustainability report in June 2024, demonstrating meaningful progress towards achieving Hudbay's long-term sustainability goals and commitments with many 2023 activities focused on "our people, our communities and our planet". Summary of Second Quarter Results Consolidated copper production of 28,578 tonnes in the second quarter of 2024 declined from the first quarter of 2024 but was in line with mine plan expectations. Consolidated gold production of 58,614 ounces in the second quarter declined from the strong levels achieved in the first quarter but was in line with mine plan expectations. Production was impacted by lower planned grades in Peru and Manitoba, a planned semi-annual mill maintenance shutdown in Peru and the execution of planned stripping programs at Pampacancha and Copper Mountain to access higher grades. In the second quarter of 2024, consolidated cash cost per pound of copper produced, net of by-product creditsi, was $1.14, compared to $0.16 in the first quarter of 2024. This change was mainly the result of lower gold by-product credits from lower gold sales volumes as well as lower copper production. Consolidated sustaining cash cost per pound of copper produced, net of by-product creditsi, was $2.65 in the second quarter of 2024 compared to $1.32 in the prior quarter, due to the same reasons outlined above as well as higher sustaining capital expenditures in line with company guidance expectations. During the second quarter of 2024, cash generated from operating activities of $138.5 million was relatively unchanged from the first quarter of 2024. Operating cash flow before change in non-cash working capital of $122.0 million in the second quarter of 2024 was lower than the first quarter. Operating cash flow before change in non-cash working capital was impacted by lower planned production levels, partially offset by higher realized metal prices and continued strong operational cost performance across the business. It was also impacted by lower copper sales volumes in Peru and lower zinc sales volumes in Manitoba due to timing of shipments. These cash flows benefited from effective working capital management as the company reduced stockpile while collecting on its receivables. Adjusted EBITDAi was $145.0 million in the second quarter compared to $214.2 million in the first quarter of 2024 and was impacted by the same factors affecting operating cash flow as noted above. Net loss attributable to owners and loss per share attributable to owners in the second quarter of 2024 were $16.6 million and $0.05, respectively, compared to net earnings attributable to owners and earnings per share attributable to owners of $59.4 million and $0.17, respectively, in the first quarter 2024. Net loss attributable to owners of $16.6 million was meaningfully impacted by tax expense of $20.8 million despite having earnings before tax of only $0.4 million in the quarter. The elevated tax expense was due to mining taxes that are calculated based on taxable mining profits in each operating jurisdiction, the limited deductibility of certain expenses and foreign exchange fluctuations on deferred tax balances. Adjusted net earnings attributable to ownersi and adjusted net earnings per share attributable to ownersi in the second quarter of 2024 were $0.1 million and nil per share, respectively, after adjusting for a $10.7 million revaluation loss related to the gold prepayment liability and revaluation of the company's strategic gold and copper hedges and investments, an $8.8 million revaluation of share-based compensation due to a higher share price and a $2.1 million write-down of PP&E, among other items. As at June 30, 2024, total liquidity was $948.5 million, including $483.8 million in cash and cash equivalents, $40.0 million in short-term investments as well as undrawn availability of $424.7 million under the company's revolving credit facilities. Net debti declined substantially by $362.4 million during the second quarter of 2024 to $631.8 million as part of the company's efforts to deleverage the balance sheet. This was driven by the free cash flow generation from the operations and the equity offering which contributed cash of $386.2 million, net of transaction and issuance costs. Some of these funds were utilized to repay all $90.0 million of debt outstanding on the senior secured credit facilities as at March 31, 2024 and to repurchase and retire approximately $34.1 million of the company's senior unsecured notes. As a result, Hudbay has made significant progress towards achieving the deleveraging targets outlined in the 3-P plan for sanctioning Copper World. Consolidated Financial Condition ($000s)   Jun. 30, 2024 Mar. 31, 2024 Dec. 31, 2023 Cash and cash equivalents and short-term investments   523,767 284,385 249,794 Total long-term debt   1,155,575 1,278,587 1,287,536 Net debt1   631,808 994,202 1,037,742 Working capital2   423,088 200,850 135,913 Total assets   5,442,422 5,231,283 5,312,634 Equity3   2,482,545 2,107,532 2,096,811 Net debt to adjusted EBITDA1,4   0.8 1.3 1.6 1 Net debt and net debt to adjusted EBITDA are non-IFRS financial performance measures with no standardized definition under IFRS. For further information, please see the "Non-IFRS Financial Performance Measures" section of this news release. 2 Working capital is determined as total current assets less total current liabilities as defined under IFRS and disclosed on the consolidated interim financial statements. 3 Equity attributable to owners of the company. 4 Net debt to adjusted EBITDA for the 12 month period. Consolidated Financial Performance   Three Months Ended     Jun. 30, 2024 Mar. 31, 2024 Jun. 30, 20233 Revenue $000s 425,520   524,989 312,166   Cost of sales $000s 347,893   373,035 289,273   Earnings (loss) before tax $000s 441   67,750 (30,731 ) Net (loss) earnings $000s (20,377 ) 18,535 (14,932 ) Net (loss) earnings attributable to owners $000s (16,583 ) 22,358 (14,932 ) Basic earnings (loss) per share1 $/share (0.05 ) 0.06 (0.05 ) Adjusted earnings (loss) per share1,2 $/share 0.00   0.17 (0.07 ) Operating cash flow before change in non-cash working capital $ millions 122.0   147.5 55.9   Adjusted EBITDA2 $ millions 145.0   214.2 81.2   1 Attributable to owners of the company. 2 Adjusted earnings (loss) per share attributable to owners and adjusted EBITDA are non-IFRS financial performance measures with no standardized definition under IFRS. For further information, please see the "Non-IFRS Financial Performance Measures" section. 3 Following completion of the Copper Mountain acquisition on June 20, 2023, the company's financial performance has not been materially affected by Copper Mountain's operations with no revenues or corresponding cost of sales recorded during the 10-day stub period from the date of acquisition to the end of the second quarter of 2023. Consolidated Production and Cost Performance1 Three Months Ended     Jun. 30, 2024 Mar. 31, 2024 June. 30, 2023 Contained metal in concentrate and doré produced2       Copper tonnes 28,578 34,749 21,715 Gold ounces 58,614 90,392 48,996 Silver ounces 738,707 947,917 612,310 Zinc tonnes 8,087 8,798 8,758 Molybdenum tonnes 369 397 414 Payable metal sold         Copper tonnes 25,799 33,608 23,078 Gold3 ounces 61,295 108,081 47,533 Silver3 ounces 667,036 1,068,848 805,448 Zinc tonnes 5,133 6,119 8,641 Molybdenum tonnes 347 415 314 Consolidated cash cost per pound of copper produced4       Cash cost $/lb 1.14 0.16 1.60 Sustaining cash cost $/lb 2.65 1.03 2.73 All-in sustaining cash cost $/lb 3.07 1.32 2.98 1 Includes 100% of Copper Mountain mine production. Hudbay owns 75% of Copper Mountain mine. As Copper Mountain was acquired on June 20, 2023, the production for the three months ended June 30, 2023 represents the 10-day stub period following the acquisition through to the end of the second quarter of 2023. 2 Metal reported in concentrate is prior to deductions associated with smelter contract terms. 3 Includes total payable gold and silver in concentrate and in doré sold. 4 Cash cost, sustaining cash cost and all-in sustaining cash cost per pound of copper produced, net of by-product credits, are non-IFRS financial performance measures with no standardized definition under IFRS. For further information, please see the "Non-IFRS Financial Performance Measures" section of this news release.   Production Guidance Reaffirmed and Cash Cost Guidance Improved Hudbay has reaffirmed its full year 2024 consolidated production guidance for all metals, including 137,000 to 176,000 tonnes of copper and 263,000 to 319,000 ounces of gold as the company anticipates stronger production in the second half of 2024 in accordance with the mine production profile. The company expects 2024 consolidated copper production to be below the midpoint of the guidance range, while 2024 consolidated gold production is expected to be above the midpoint of the guidance range. This is a result of a combination of lower-than-expected grades and timing impacts from heavy rains in Peru, as well as the ongoing ramp-up of stabilization efforts at Copper Mountain, offset by the continued strong operational performance in Manitoba driven by New Britannia performance and grades exceeding the company's expectations. The company is improving its 2024 annual consolidated cash cost guidance range to $0.90 to $1.10 per pound from the original guidance range of $1.05 to $1.25 per pound, as a result of meaningful exposure to gold by-product credits and continued strong cost control. Hudbay has reaffirmed all other 2024 guidance metrics. Peru Operations Review Peru Operations Three Months Ended     Jun. 30, 2024 Mar. 31, 2024 Jun. 30, 2023 Constancia ore mined1 tonnes 5,277,654 2,559,547 3,647,399 Copper % 0.29 0.31 0.31 Gold g/tonne 0.03 0.04 0.04 Silver g/tonne 2.50 2.79 2.49 Molybdenum % 0.01 0.01 0.01 Pampacancha ore mined1 tonnes 1,288,789 2,214,354 2,408,495 Copper % 0.41 0.56 0.36 Gold g/tonne 0.20 0.32 0.34 Silver g/tonne 3.83 4.64 2.81 Molybdenum % 0.02 0.02 0.02 Total ore mined tonnes 6,566,443 4,773,901 6,055,894 Strip ratio4   1.74 1.95 1.74 Ore milled tonnes 7,718,962 8,077,962 7,223,048 Copper % 0.30 0.36 0.31 Gold g/tonne 0.07 0.15 0.09 Silver g/tonne 2.85 3.48 2.78 Molybdenum % 0.01 0.01 0.01 Copper recovery % 83.1 84.9 80.0 Gold recovery % 61.4 73.4 61.1 Silver recovery % 63.9 70.7 65.1 Molybdenum recovery % 46.3 43.2 40.5 Contained metal in concentrate       Copper tonnes 19,217 24,576 17,682 Gold ounces 10,672 29,144 12,998 Silver ounces 450,833 639,718 419,642 Molybdenum tonnes 369 397 414 Payable metal sold       Copper tonnes 16,806 23,754 21,207 Gold ounces 13,433 42,677 14,524 Silver ounces 400,302 753,707 671,532 Molybdenum tonnes 347 415 314 Combined unit operating cost2,3 $/tonne 12.68 10.92 14.07 Cash cost3 $/lb 1.78 0.43 2.14 Sustaining cash cost3 $/lb 2.61 1.06 3.06 1 Reported tonnes and grade for ore mined are estimates based on mine plan assumptions and may not reconcile fully to ore milled. 2 Reflects combined mine, mill and general and administrative ("G&A") costs per tonne of ore milled. Reflects the deduction of expected capitalized stripping costs. 3 Combined unit costs, cash cost and sustaining cash cost per pound of copper produced, net of by-product credits, are non-IFRS financial performance measures with no standardized definition under IFRS. For further information, please see the "Non-IFRS Financial Performance Measures" section of this news release. 4 Strip ratio is calculated as waste mined divided by ore mined. During the second quarter of 2024, the Peru operations produced 19,217 tonnes of copper, 10,672 ounces of gold, 450,833 ounces of silver and 369 tonnes of molybdenum. Production was lower than the first quarter of 2024 primarily due to planned lower grades as the company executes a stripping program at Pampacancha to advance to the next mining phase, as further discussed below, in addition to a planned semi-annual mill maintenance shutdown in the second quarter. The company is on track to achieve its 2024 production guidance for all metals in Peru. Total ore mined in the second quarter of 2024 increased by 38% compared to the first quarter and was in line with the mine plan. Ore mined from Pampacancha during the second quarter decreased to 1.3 million tonnes compared with 2.2 million tonnes in the first quarter of 2024 as a result of higher capitalized stripping activities. Mining efforts at Pampacancha are focused on continuing the stripping program to advance to the next mining phase and the company is on track to resume mining in higher copper and gold grade areas later in the year. The Peru operations continue to benefit from strong mill throughput, averaging approximately 87,000 tonnes processed per day year-to-date. Ore milled during the second quarter of 2024 was 4% lower than the first quarter due to the scheduled semi-annual mill maintenance shutdown. Ore milled included supplemental ore feed from stockpiles during the quarter as the team advances pit stripping activities. Milled copper and gold grades of 0.30% and 0.07 grams per tonne, respectively, decreased in the second quarter of 2024 compared to the first quarter due to lower amounts of high-grade copper and gold from Pampacancha, in addition to lower grades from the processing of stockpiled ore. Recoveries of copper and gold during the second quarter of 2024 were 83% and 61%, respectively, and were in line with metallurgical models. Combined mine, mill and G&A unit operating costsi in the second quarter were $12.68 per tonne, 16% higher than the first quarter of 2024 primarily due to higher milling costs and lower throughput associated with the planned semi-annual mill maintenance shutdown. Payable copper metal sold in the second quarter of 2024 was lower than the first quarter due to lower copper production and a 10,000 wet metric tonne copper concentrate shipment that remained unsold at the end of the second quarter and was recognized as revenue early in the third quarter of 2024. Cash cost per pound of copper produced, net of by-product creditsi, in the second quarter of 2024 was $1.78, an increase from the $0.43 achieved in the first quarter of 2024 due to lower planned copper production, higher milling costs and lower by-product credits, partly offset by lower treatment and refining charges. Full year cash costs are expected to be within the 2024 guidance range. Sustaining cash cost per pound of copper produced, net of by-product creditsi, was $2.61 for the second quarter, higher than the first quarter of 2024 of $1.06, primarily due to the same factors affecting cash cost. During the quarter, the Peruvian Ministry of Energy and Mines approved a regulatory change, Supreme Decree 011-2024-EM, to allow mining companies in Peru to increase throughput by up to 10% above permitted levels. Previously, the regulation only allowed for an increase of up to 5%. As such, the company is evaluating the potential to increase future production at Constancia. Manitoba Operations Review Manitoba Operations                                                                          Three Months Ended     Jun. 30, 2024 Mar. 31, 2024 Jun. 30, 2023 Lalor          Ore mined tonnes 385,478 407,708 413,255 Gold g/tonne 3.75 4.84 4.07 Copper % 0.69 0.84 0.81 Zinc % 2.76 2.92 3.14 Silver g/tonne 22.29 23.44 23.27 New Britannia          Ore milled tonnes 167,899 170,409 141,905 Gold g/tonne 5.31 7.03 5.82 Copper % 0.94 1.13 0.77 Zinc % 0.92 0.82 0.85 Silver g/tonne 24.42 21.6 25.79 Gold recovery1 % 90 88.6 88.6 Copper recovery % 94.4 96.2 91.2 Silver recovery1 % 83.1 82 79.6 Stall Concentrator       Ore milled tonnes 229,527 219,358 238,633 Gold g/tonne 3.02 3.07 3.12 Copper % 0.59 0.64 0.85 Zinc % 4.05 4.54 4.47 Silver g/tonne 21.74 24.46 22.15 Gold recovery % 65.5 68 59.9 Copper recovery % 85.4 91.7 88.5 Zinc recovery % 87.1 88.4 82.2 Silver recovery % 54.2 59.8 60.3 Total contained metal in concentrate and doré1     Gold ounces 43,488 56,831 35,253 Copper tonnes 2,642 3,149 2,794 Zinc tonnes 8,087 8,798 8,758 Silver ounces 210,647 219,823 180,750 Total payable metal sold       Gold ounces 42,763 62,003 33,009 Copper tonnes 2,429 2,921 1,871 Zinc tonnes 5,133 6,119 8,641 Silver ounces 197,486 231,841 133,916 Combined unit operating cost2,3 C$/tonne 225 235 220 Gold cash cost $/oz 771 736 1,097 Gold sustaining cash cost3 $/oz 1,163 950 1,521 1 Gold and silver recovery includes total recovery from concentrate and doré. 2 Combined unit cost, cash cost, sustaining cash cost per pound of copper produced, net of by-product credits, gold cash cost and sustaining cash cost per ounce of gold produced, net of by-product credits, are non-IFRS financial performance measures with no standardized definition under IFRS. For further information, please see the "Non-IFRS Financial Performance Measures" section of this news release. 3 Reflects combined mine, mill and G&A costs per tonne of ore milled. The Manitoba operations produced 43,488 ounces of gold, 2,642 tonnes of copper, 8,087 tonnes of zinc and 210,647 ounces of silver during the second quarter of 2024. Compared to the exceptional results achieved in the first quarter of 2024, production decreased primarily due to a planned lower grade mining sequence in the quarter. The Snow Lake operations in Manitoba maintained steady production results despite overcoming challenges in the second quarter of 2024, including forest fires and temporary production interruptions at the Lalor mine, partially offset by stronger than budgeted throughput at New Britannia. The Manitoba team's resilience and dedication ensured that the operations continued to function effectively and efficiently while achieving quarterly production targets. The company is on track to achieve its 2024 production guidance for all metals in Manitoba. Total ore mined in Manitoba in the second quarter of 2024 was 5% lower than the first quarter. Gold, copper, zinc and silver grades mined at Lalor during the second quarter were 23%, 18%, 5% and 5% lower, respectively, compared with the first quarter of 2024. These changes reflect temporary Lalor mine production disruptions and the completion of a planned lower grade mining sequence in the quarter. During the quarter, the Lalor mine encountered issues with the production hoist gearbox and electrical faults on the hoist drives, causing a ten-day stoppage in hoisting ore. The maintenance teams collaborated closely with original equipment manufacturers to resolve these issues quickly. During the hoisting outage, the operations team focused on value-added activities, including underground ore buildup close to the shaft, waste filling, increased maintenance, building longhole inventory, and trucking ore to surface. Additionally, the team implemented stope design modifications that yielded positive results by improving mucking efficiency throughout the lifecycle of the stopes. The New Britannia mill consistently operated above nameplate capacity, averaging approximately 1,850 tonnes per day in the second quarter of 2024 and achieving a new monthly record of nearly 2,100 tonnes per day in June. Ongoing efforts to increase throughput are aligned with the company's long-term objectives to maximize gold production by directing more gold ore from Lalor to the New Britannia mill for higher gold recoveries. Recoveries of gold, copper and silver in the second quarter of 2024 were 90%, 94% and 83%, respectively. The Stall mill processed 5% more ore in the second quarter of 2024 than the first quarter. Recoveries of gold, copper and silver in the second quarter of 2024 were slightly lower than the first quarter primarily due to lower grades. Combined mine, mill and G&A unit operating costsi in the second quarter of 2024 were C$225 per tonne, a 5% decrease compared to the first quarter. This decrease was a result of higher throughput and lower mining, milling and G&A costs compared to the first quarter. Payable zinc metal sold was lower than prior periods as there was a 10,000 wet metric tonne zinc concentrate shipment that remained unsold at the end of the second quarter and will be recognized as revenue in the third quarter of 2024. Cash cost per ounce of gold produced, net of by-product creditsi, in the second quarter of 2024 was $771 per ounce, a 5% increase compared to the first quarter primarily due to lower gold production. Full year gold cash cost is expected to remain within the 2024 guidance range. Sustaining cash cost per ounce of gold produced, net of by-product creditsi, in the second quarter of 2024 was $1,163, an increase of 22% compared to the first quarter due to lower gold production and higher sustaining capital costs during the quarter. Hudbay's Manitoba operation also progressed its sustainability initiatives by reducing propane and diesel consumption in the first half of 2024 compared to the same period in 2023. In addition, at Lalor, an initiative to capture and recycle natural groundwater and use it as process water to reduce the freshwater intake into the mine has proven to be effective. British Columbia Operations Review British Columbia Operations Three Months Ended5       Jun. 30, 2024 Mar. 31, 2024   Ore mined1 tonnes   2,164,722 3,722,496   Strip ratio2     7.61 4.10   Ore milled tonnes   3,232,427 3,180,149   Copper %   0.25 0.27   Gold g/tonne   0.07 0.07   Silver g/tonne   1.01 1.19   Copper recovery %   82.3 83.4   Gold recovery %   57.2 61.8   Silver recovery %   73.9 72.4   Total contained metal in concentrate2       Copper tonnes   6,719 7,024   Gold ounces   4,454 4,417   Silver ounces   77,227 88,376   Total payable metal sold         Copper tonnes   6,564 6,933   Gold ounces   5,099 3,401   Silver ounces   69,248 83,300   Combined unit operating cost3,4 C$/tonne   19.65 23.67   Cash cost4 $/lb   2.67 3.49   Sustaining cash cost4 $/lb   5.56 4.85    1 Reported tonnes and grade for ore mined are estimates based on mine plan assumptions and may not reconcile fully to ore milled.  2 Strip ratio is calculated as waste mined divided by ore mined.  3 Reflects combined mine, mill and G&A costs per tonne of ore milled. Reflects the deduction of expected capitalized stripping costs.  4 Combined unit operating cost, cash cost and sustaining cash cost per pound of copper produced, net of by-product credits, are non-IFRS financial performance measures with no standardized definition under IFRS. For further information, please see the "Non-IFRS Financial Performance Measures" section of this news release. 5 Copper Mountain mine results are stated at 100%. Hudbay owns 75% of Copper Mountain mine. During the second quarter of 2024, the British Columbia operations produced 6,719 tonnes of copper, 4,454 ounces of gold and 77,227 ounces of silver. Production of copper was slightly lower than the first quarter of 2024 primarily as a result of lower head grades from the use of stockpiled ore to feed the mill while mining activities are focused on executing the planned stripping program. Gold production was consistent with the first quarter of 2024. The company has reaffirmed its 2024 production guidance ranges for all metals in British Columbia. Hudbay has been focused on advancing operational stabilization plans, including opening up the mine by adding additional mining faces, adding to the mining fleet, optimizing the ore feed to the plant and implementing plant improvement initiatives that mirror Hudbay's successful processes at Constancia. While the benefits of these stabilization plans are not expected to be fully realized until 2025, the mine has successfully increased the total tonnes moved and has seen stronger mill performance as demonstrated by higher mill availability of 94% and above-target copper recoveries of 82% in the second quarter of 2024. As a result, year-to-date mill performance has resulted in the highest mill availability and highest copper recoveries in the last decade. Total ore mined at Copper Mountain in the second quarter of 2024 was 2.2 million tonnes, a decrease compared to the first quarter of 2024. As planned, ore stockpiles were utilized as ore feed to the mill while the mine operation team increased waste stripping activities. Total material moved continued to ramp up in the quarter as a result of effective usage of the mining fleet as part of the fleet production ramp up plan to execute the accelerated stripping program to access higher head grades. This plan entails remobilization of the existing mining truck fleet and the deployment of an additional shovel, drill and associated equipment. Earlier this year, the company ordered five new haul trucks to execute additional stripping activities over the next three years at a lower cost than the contractor mining approach that was contemplated in the technical report. Three of the five new haul trucks and the additional shovel and drill were put in production in June, and all five haul trucks were in operation by August. As a result, total material moved is expected to continue to increase quarter-over-quarter as per the mine plan. The mill processed 3.2 million tonnes of ore during the second quarter of 2024, a 2% increase over the first quarter, benefiting from stabilization and reliability initiatives within the mill processing circuit. The average mill availability during the second quarter of 2024 increased to 94% from 90% in the first quarter, while maintaining a stable throughput rate. Mill throughput in the second quarter of 2024 was limited by reduced reliability of the secondary crushing circuit, caused primarily by unplanned maintenance events and elevated clay material in the mine feed. During the quarter, a number of initiatives were advanced to address these issues and other identified constraints and improve throughput to targeted levels, with the benefits expected to be realized in the second half of 2024. Initiatives that began earlier in the year are progressing on target, including reprogramming the mill expert system, installation of advanced semi-autogenous grinding control instrumentation, redesign of the SAG liner package and updated operational procedures intended to remove magnetite from the pebble stream. Milled copper grades during the second quarter of 2024 were 7% lower than the first quarter as the company continued to draw on stockpiled ore. Copper recoveries were slightly lower than the first quarter of 2024, but in line with expectations despite lower grades as the operations improved the regrind circuit constraint and implemented the flotation operational strategy improvements, including reagent selection and dose modification. The benefits of the operational stabilization improvements are expected to continue to be realized throughout 2024. The company is also accelerating engineering studies to debottleneck and increase the nominal plant capacity to 50,000 tonnes per day earlier than was contemplated in the technical report. Combined mine, mill and G&A unit operating costsi in the second quarter of 2024 were C$19.65 per tonne milled, 17% lower than the first quarter of 2024 primarily due to lower mining costs as there were high ore rehandling costs in the first quarter of 2024. Combined unit operating costs are expected to decrease over time as the company continues to implement its stabilization and optimization initiatives at Copper Mountain. As the hiring and training of additional haul truck drivers continues, the company expects to have a fully trained complement of truck drivers in August to support the larger mining fleet, which is expected to increase material moved and reduce unit operating costs. Cash cost per pound of copper produced, net of by-product creditsi, in the second quarter of 2024 was $2.67. Cash costs were lower than the first quarter of 2024 by 23% for the same reason as mentioned above regarding the unit cost variance. Full year cash costs are expected to be within the 2024 guidance range. Sustaining cash cost per pound of copper produced, net of by-product creditsi, in the second quarter of 2024 was $5.56, 15% higher than the first quarter mainly as a result of planned higher capitalized stripping costs to unlock the mine potential according to the company's stabilization plan. Enhanced Balance Sheet through Successful Equity Offering and Accelerated Debt Reduction The company took several prudent measures in the second quarter of 2024 to further improve its balance sheet position, including more than $150 million of combined debt repayments and gold prepayment liability reductions: Completed successful $402.5 million equity offering – On May 24, 2024, Hudbay closed a public offering of common shares for gross proceeds of $402.5 million, resulting in net proceeds of $386.2 million after transaction costs. Fully repaid $90.0 million outstanding under the revolving credit facilities – The company fully repaid $90 million of debt outstanding under its revolving credit facilities during the quarter with no remaining amounts drawn (other than letters of credit). Repurchased and retired $34.1 million of senior unsecured notes – The company made open market purchases of $11.6 million of the 2026 senior unsecured notes and $22.5 million of the 2029 senior unsecured notes during the quarter. Delivered $24.0 million under gold forward sale and ...