HudBay Minerals Inc. 2010 Annual Report

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HudBay At a Glance HudBay is an integrated mining company with operations, development properties and exploration activities in the Americas. Our mission is to create sustainable value through increased commodity exposure on a per share basis, in high‐quality and growing long-life deposits in mining-friendly jurisdictions. YUKON MANITOBA MICHIGAN GUATEMALA PERU ONTARIO 2010 Metals Reserves 1 Precious Metals 2 Production Volumes (thousands of ounces) 250 Note: We also own the Balmat zinc Copper Precious metals 2 Zinc Molybdenum 68% ● 15% ● 10% ● 7% ● 95–120 2011 2016 (est.) mine and concentrator in New York state, which are currently on care and maintenance, and the White Pine copper refinery in Michigan, which was closed in mid-2010 shortly after the closure of our Flin Flon copper smelter. Copper Production Volumes (thousands of tonnes) 40–55 120 2011 2016 (est.) Copper production is projected to increase by approximately 155% between 2011 and 2016. Zinc Production Volumes (thousands of tonnes) 70–90 125 2011 2016 (est.) 1 HudBay reserves as of January 1, 2010 plus Constancia reserves based on NI 43-101 technical report dated February 21, 2011. In-situ value calculated using commodity prices of US$900/oz Au, US$0.95/lb Zn, US$2.50/lb Cu and US$12.00/lb Mo. Silver converted to gold at ratio of 60:1. For additional information on our mineral reserve and resource disclosure, please refer to HudBay’s Annual Information Form for the year ended December 31, 2010, available on SEDAR at www.sedar.com and the company’s news release dated March 31, 2011. 2 Reflects only gold and silver with silver converted to gold at a ratio of 60:1. ● exploration Back Forty, Michigan Back Forty is an advanced-stage exploration project that is evaluating a zinc- and gold-rich VMS deposit in Michigan’s Upper Peninsula. We hold a 51% interest in the property, pursuant to a joint venture with Aquila Resources, and we can increase our interest to 65% by completing a feasibility study and making permitting applications. We are conducting an expanded drilling program, a trade-off study and engineering studies in preparation for permitting.
● operations Flin Flon, Manitoba 777 and Trout Lake mines Flin Flon concentrator Zinc plant Snow Lake, Manitoba Chisel North mine Snow Lake concentrator Zochem, Ontario Zinc oxide plant Flin Flon is our main production platform. The 777 mine produces zinc, copper, gold and silver. Commercial production began in 2004, and the mine is expected to continue until 2020. The Trout Lake mine is in its final year of production. The state-of-the-art zinc plant processes zinc concentrate into finished metal. Since mid-2010, when the Flin Flon copper smelter closed, copper concentrate has been shipped to third-party copper smelters. Located 215 kilometres from Flin Flon, the Chisel North zinc mine began commercial production in 2000 and is scheduled to close in 2012 when production begins at the Lalor project. Zinc concentrate is transported to the Flin Flon zinc plant for processing. Our subsidiary Zochem is located in Brampton, Ontario, and is Canada’s largest zinc oxide manufacturer. Zinc oxide is used in rubber products, chemicals, ceramics, paints, pharmaceuticals and agriculture. ● development Lalor Project, Manitoba Fenix Nickel Project, Guatemala Constancia Project, Peru The Lalor project is located three kilometres from the Chisel North mine. It will become our next major underground mine, and we expect to nearly double our company’s gold output and increase zinc production by 55% once it is in full production in 2016. Construction is well advanced and initial production is expected to begin in 2012. Acquired by HudBay in 2008, Fenix was a fully operational nickel laterite mining and smelting operation until it was placed on care and maintenance in 1980. We completed an updated feasibility study in 2010, and are continuing exploration, optimization and infrastructure development work on the property. A process is underway to seek potential partners and financing alternatives for the project. We acquired the Constancia advanced-stage copper development project in March 2011 when we acquired Norsemont Mining Inc. It is a large-scale porphyry deposit with significant exploration upside in an established miningfriendly jurisdiction. We are completing feasibility optimization and exploration programs and expect to make a construction decision by early 2012. Reed Copper Project, Manitoba Cold and Lost Properties, Manitoba Tom and Jason, Yukon We have a 70% interest in the copper-rich Reed project near Snow Lake, pursuant to a joint venture with VMS Ventures. In early 2011, we completed an infill drilling program and published an NI 43-101 resource estimate. We have begun an economic evaluation to assess the viability of the deposit. A construction decision is expected in late 2011, which could lead to production commencing in late 2012 or early 2013. Located 110 kilometres from Flin Flon, the Cold and Lost properties are subject to an option agreement with Halo Resources. We completed an NI 43-101-compliant resource estimate in early 2011 and we intend to commence a pre-feasibility study to determine how the project fits with our long-term production plans. At our 100%-owned Tom and Jason lead-zinc deposits, we are focused on upgrading resources from the inferred to indicated categories and on collecting metallurgical samples, with the intention of initiating a preliminary economic assessment in early 2012. ▲ hudbay at a glance
Page 1: In our veins HudBay Minerals Inc. 2
Page 5 and 6: In 1927, our subsidiary Hudson Bay
Page 7 and 8: Operations HudBay’s operating min
Page 9 and 10: Q: What do you think investors need
Page 11 and 12: Strength in Management (left to rig
Page 13 and 14: $ 902 million Record production fro
Page 15 and 16: Lalor The Lalor project is on a fas
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Page 23 and 24: 2011 Exploration Expenditures ($ mi
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MANAGEMENT’S DISCUSSION AND ANALY
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Consolidated Balance Sheets As at D
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Consolidated Statements of Cash Flo
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Corporate and Shareholders’ Infor
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HudBay Minerals Inc. 2010 Annual Re
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HudBay Minerals Inc. 2010 Annual Report

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