Hudbay Announces Pampacancha Surface Rights Agreement

TORONTO, Feb. 18, 2020 (GLOBE NEWSWIRE) -- Hudbay Minerals Inc. (“Hudbay” or the “company”) (TSX, NYSE: HBM) today announced the community of Chilloroya has formally approved a surface rights agreement with Hudbay for the Pampacancha satellite deposit located near the Constancia mine in Peru. With the completion of this agreement, the company expects to be mining ore from the deposit in late 2020.

“We are very pleased to have reached a Pampacancha agreement with the community,” said Peter Kukielski, Hudbay’s President and Chief Executive Officer. “I have been impressed with the team’s work and appreciate the years of effort to achieve this goal. Pampacancha adds high-grade copper and gold ore into the Constancia mine plan, lowering future cash costs for the mine and increasing operating cash flows at Constancia. Not only was Constancia one of the best project development and production ramp-up successes of recent project builds, Constancia is also one of the lowest cost open pit copper mines in South America. This could not have been achieved without our long-term commitment to, and partnership with, our local communities, and this successful agreement further validates our social acceptance to operate in Peru.”

“On behalf of Hudbay Peru, I would like to thank the community of Chilloroya for their dedication to completing this agreement which further enhances our valued long-term relationship with the community,” said Javier Del Rio, Vice President of Hudbay’s South America Business Unit. “We look forward to continuing harmonious negotiations with the communities north of Constancia on our highly prospective exploration properties.”

The company expects growth capital expenditures associated with project development and acquiring the surface rights for Pampacancha to be approximately $70 million in 2020. In accordance with Peru’s Consulta Previa law, additional consultation between the Peruvian government and the local community is required before Hudbay can begin development activities. Some additional capital costs remain outstanding in recognition of current uses of the land by certain community members and the company intends to enter into agreements to address these matters prior to commencing mining activities. With the community’s endorsement of the agreement, the company believes these processes will be concluded in the first half of 2020.