Hudbay Minerals reaffirms 2022 guidance as output, costs improve in Q2

Hudbay Minerals (TSX, NYSE: HBM) is coming off a strong quarter with 25,668 tonnes of copper and 58,645 oz. of gold produced across its […]
The 777 mine in Manitoba has reached the end of its life. Credit: Hudbay Minerals

Hudbay Minerals (TSX, NYSE: HBM) is coming off a strong quarter with 25,668 tonnes of copper and 58,645 oz. of gold produced across its operations for the three months ended June 30, 2022. These were 4% and 9% higher respectively than the first quarter. Zinc production, as expected, fell 23% due to depletion of the 777 mine reserves.

Importantly, Hudbay achieved strong unit operating cost performance despite inflationary pressures from higher input prices for many services and consumables. Cash cost per pound of copper produced, net of byproduct credits, was US$0.65 in Q2 2022, compared to US$1.11 in the first quarter. This improvement was a result of higher zinc and gold by-product credits and higher copper production. Sustaining cash cost per pound of copper produced (net of by-product credits) was US$1.87 in the second quarter compared to US$2.29 in the first.

Given that its second quarter metal production and costs were both in line with expectations, the company has therefore reaffirmed its full year guidance, including 101,000 to 131,000 tonnes of copper and 220,000 to 275,000 oz. of gold.

“Our operating performance was strong during the second quarter with higher consolidated copper and gold production and lower consolidated cash costs,” Peter Kukielski, president and CEO of Hudbay, commented. “This was a result of a continuous focus on operating efficiencies which has allowed us to reaffirm our production and operating cost guidance for 2022. We have seen steady performance from our operations in Peru and the New Britannia mill in Manitoba achieved higher-than-expected throughput. We are advancing a pre-feasibility study to evaluate project optimization opportunities on the private land plan at our Copper World complex, and we have been focused on closure activities in Flin Flon and a smooth transition of our workforce to Snow Lake.”

On the financial front, Hudbay recorded net earnings of US$32.1 million for the second quarter of 2022, compared with US$63.8 million in Q1 2022 and a net loss of US$3.4 million in last year's comparable quarter.

The Q2 2022 earnings were negatively impacted by a US$95 million pre-tax impairment loss related to certain capitalized costs and assets associated with the previous standalone development plan for the Rosemont project in Arizona, which suffered a setback earlier this year. The company did benefit from a non-cash gain of US$60.7 million that was mostly related to the quarterly revaluation of the Flin Flon environmental provision.

Adjusted net earnings in the second quarter were US$30.5 million, after taking into account the non-cash gain related to the revaluation of the environmental provision and the specific asset impairment loss, among other items. This compares favourably to an adjusted net earnings of US$5.2 million for the first quarter.

By quarter-end, the company’s liquidity includes US$258.6 million in cash as well as undrawn availability of US$363.6 million under its credit facilities. Hudbay expects that its current liquidity, combined with cash flow from operations, particularly in the fourth quarter when production in Peru is expected to benefit from higher grades, will be sufficient to meet its liquidity needs for the foreseeable future.

For additional information on Hudbay's Q2 2022 results, visit


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