Hudbay Minerals Inc. Q1 2023 Earnings Call

May 9, 2023

Good morning, ladies and gentlemen, thank you for standing by welcome to the Hebei Minerals, Inc. First quarter 2023 results conference call. At this time, all participants are in listen only mode.

Following the presentation, we will conduct a question and answer session to join the question queue. You May Press Star then one on your telephone keypad should you need assistance during the conference call you May signal, an operator by pressing Star then zero.

I would like to remind everyone that this conference call is being recorded today may nine 2023 at 830 am Eastern time, I will now turn the conference over to Candace Brule, Vice President Investor Relations. Please go ahead.

Good morning, ladies and gentlemen, thank you for standing by welcome to the Hebei Minerals, Inc. First quarter 2023 results conference call.

Thank you operator, good morning, and welcome to high base 2023 first quarter results conference call.

At this time, all participants are in listen only mode.

Financial results were issued yesterday and are available on our website at www Dot Hebei dotcom, a corresponding Powerpoint presentation is available in the investors events section of our website and we encourage you to refer to it during this call.

Our presenter today is Peter could kill ski had based president and Chief Executive Officer accompanying Peter for the Q&A portion of the call will be Eugene Lee, Our Chief Financial Officer, and Andre loads on our Chief operating officer.

I would like to remind everyone that this conference call is being recorded today may nine 2023 at 830, a M eastern time.

I will now turn the conference over to Candace Brule, Vice President Investor Relations. Please go ahead.

Please note that comments made on today's call may contain forward looking information and this information by its nature is subject to risks and uncertainties and as such actual results may differ materially from the views expressed today for further information on these risks and uncertainties. Please consult the company's relevant filings on SEDAR and Edgar These dog.

Thank you operator, good morning, and welcome to a high base 2023 first quarter results conference call.

<unk> financial results were issued yesterday and are available on our website at www Dot Hardbake dotcom, a corresponding Powerpoint presentation is available in the investors events section of our website and we encourage you to refer to it during this call.

Humans are also available on our website as a reminder, all amounts discussed on today's call are in U S dollars, unless otherwise noted and now I'll pass the call over to Peter Kotowski.

Our presenter today is Peter can kill ski HUD based president and Chief Executive Officer accompanying Peter for the Q&A portion of the call will be Eugene Lee, Our Chief Financial Officer, and Andre <unk>, Our Chief operating officer.

Thank you Candice.

Good morning, everyone.

And thank you for joining us in today's presentation I'll discuss our first quarter results touch on the operating and financial performance of the business and provide some insight into recent strategic initiatives and corporate achievements.

As I've said before I truly believe one of <unk> greatest strengths is our disproportionately talented team for a company of our size to complement this team we brought in Warren Flannery as Vice President business planning and reclamation. His experience will be a welcome addition to our organization to enhance our capital planning.

Humans are also available on our website as a reminder, all amounts discussed on today's call are in U S dollars, unless otherwise noted and now I'll pass the call over to Peter could tell skis.

Operation strategy, as well as reclamation and management of non producing facilities.

Thank you Candice good well good morning, everyone and thank you for joining us in today's presentation I'll discuss our first quarter results touch on the operating and financial performance of the business and provide some insight into recent strategic initiatives and corporate achievements.

In the quarter, we promoted Javier del Rio to senior Vice President South America in the USA and Olivier to have change you're into senior Vice President exploration and technical services.

These team members will be instrumental in continuing to drive our strategic initiatives.

As I've said before I truly believe one of HUD based greatest strengths is our disproportionately talented team for a company of our size to complement this team we brought in Warren Flannery as Vice President business planning and reclamation. His experience will be a welcome addition to our organization to enhance our capital planning.

In the first quarter, we took some meaningful steps to position the business to deliver sustainable cash flow through disciplined capital allocation and to expand our copper production profile.

We continue to focus on our commitment to maintain a strong culture of safety and commitment to our local communities, while improving our low carbon footprint.

And operation strategy, as well as reclamation and management of non producing facilities.

The team successfully navigated the recent Peru logistical interruptions to achieve a very strong start towards meeting our full year operating and cost guidance at Constancia.

In the quarter, we promoted Javier del Rio to senior Vice President South America in USA, and Olivier tough change yet to senior Vice President exploration and technical services. These team members will be instrumental in continuing to drive our strategic initiatives.

And we are executing debottlenecking initiatives to increase the output from all our mine in snow Lake.

Took several prudent measures this quarter to improve our free cash flow for 2023, and we remain focused on being disciplined with capital allocation as we continue to Derisk, our copperweld project in Arizona.

In the first quarter, we took some meaningful steps to position the business to deliver sustainable cash flow through disciplined capital allocation and to expand our copper production profile.

We continue to focus on our commitment to maintain a strong culture of safety and commitment to our local communities, while improving our low carbon footprint.

We also sees an opportunity to diversify our operating portfolio and expand our copper production scale with the recently announced agreement to combine with copper mountain in British Columbia, which is expected to close in late June we are well positioned to deliver sustainable cash flow from our operating portfolio as well as to drive organic growth.

The team successfully navigated the recent Peru logistical interruptions to achieve a very strong start towards meeting our full year operating and cost guidance at Constancia.

And we are executing debottlenecking initiatives to increase the output from our La <unk> mine in Snow Lake.

Through advancing our leading organic corporate pipeline.

We took several prudent measures this quarter to improve our free cash flow for 2023, and we remain focused on being disciplined with capital allocation as we continue to Derisk, our copperweld project in Arizona.

Moving to the first quarter results on slide three.

First quarter consolidated production was in line with our expectations and is on track for strong up production levels in the second half of 2023.

Consequently, we are reaffirming our 2023 production guidance for all metals.

We also seized an opportunity to diversify our operating portfolio and expand our copper production scale with the recently announced agreement to combine with copper mountain in British Columbia, which is expected to close in late June .

Consolidated copper production was 23000 tons, a decrease compared to the fourth quarter, primarily due to lower copper grades in Peru as planned consol.

We are well positioned to deliver sustainable cash flow from our operating portfolio as well as to drive organic growth through advancing our leading organic corporate pipeline.

Consolidated gold production was 47000 ounces, a decrease primarily due to lower gold grades in Peru, partially offset by higher throughput and gold recoveries in snow Lake.

Yeah.

Moving to the first quarter results on slide three.

<unk> zinc production was approximately 10000 tons higher than the fourth quarter, primarily due to improved zinc grades and throughput in snow Lake.

First quarter consolidated production was in line with our expectations and is on track for stronger production levels in the second half of 2023. Consequently, we are reaffirming our 2023 production guidance for all metals.

Consolidated copper cash cost improved to 85 cents per pound from $1.08 in the prior quarter, primarily as a result of lower mining and freight costs and higher byproduct credits, partially offset by lower copper production.

Consolidated copper production was 23000 tons, a decrease compared to the fourth quarter, primarily due to lower copper grades in Peru as planned.

Similarly, copper sustaining cash costs declined to $1.83 per pound a decrease from the fourth quarter due to lower sustaining capital expenditures and capitalized exploration.

Consolidated gold production was 47000 ounces, a decrease primarily due to lower gold grades in Peru, partially offset by higher throughput and gold recoveries in snow Lake.

Both measures are anticipated to continue to decline in future quarters with higher production and precious metals byproducts and we reaffirm our 2023 consolidated cash costs and sustaining cash costs guidance.

Consolidated zinc production was approximately 10000 tons higher than the fourth quarter, primarily due to improved zinc grades and throughput in snow Lake.

Consolidated copper cash cost improved to 85 per pound from $1.08 in the prior quarter, primarily as a result of lower mining and freight costs and higher byproduct credits, partially offset by lower copper production.

First quarter operating cash flow before changes in non working capital was $86 million and adjusted EBITA was $102 million. This was a decline from the fourth quarter as a result of lower copper and zinc sales volumes, partially offset by higher realized prices.

Similarly, copper sustaining cash costs declined to $1.83 per pound a decrease from the fourth quarter due to lower sustaining capital expenditures and capitalized exploration.

With a focus on generating positive cash flow and strong returns on invested capital in 2023, we are committed to deleveraging and disciplined capital allocation. This is demonstrated through several prudent measures. We took this quarter to improve cash flow.

Both measures are anticipated to continue to decline in future quarters with higher production and precious metal byproduct and we reaffirm our 2023 consolidated cash costs and sustaining cash cost guidance.

First hopper routine reduced concentrate inventory levels at site well ahead of schedule, which helped to improve operating cash flow during the quarter.

First quarter operating cash flow before changes in non working capital was $86 million and adjusted EBITA was $102 million.

Second in an effort to ensure we received full exposure to the strong gold prices, we amended our gold forward sale and prepay agreements to defer eight months of deliveries starting with February 2023 into 2024.

This was a decline from the fourth quarter as a result of lower copper and zinc sales volumes, partially offset by higher realized prices.

With a focus on generating positive cash flow and strong returns on invested capital in 2023, we are committed to deleveraging and disciplined capital allocation.

This is expected to increase our 2023 cash position by approximately $53 million to support our continued focus on reducing net debt.

This is demonstrated through several prudent measures we took this quarter to improve cash flow.

Third as an additional prudent measure to ensure free cash flow generation and financial discipline, we extended our existing quotation period hedging program for approximately 8000 tonnes of contained copper in the previously unsold concentrate inventory in Peru to lock in prevailing copper prices. We also entered into a zero cost collar.

First copper routine reduced concentrate inventory levels at site well ahead of schedule, which helped to improve operating cash flow during the quarter.

Program in April for approximately 10% of copper production expected in the second half of 2023.

The program establishes a floor price of $3 95 per pound and upside to $4.28 per pound and.

This is expected to increase our 2023 cash position by approximately $53 million to support our continued focus on reducing net debt.

And lastly, we are on track to deliver our discretionary spending reduction targets by reducing growth capital and exploration spending by $65 million in 2023 compared to 2022.

Third as an additional prudent measure to ensure a free cash flow generation and financial discipline, we extended our existing quotation period hedging program for approximately 8000 tonnes of contained copper in the previously unsold concentrate inventory in Peru to lock in prevailing copper prices. We also entered into a zero cost collar.

At the end of the first quarter, our liquidity included $256 million in cash and $355 million in undrawn availability under our revolving credit facilities.

The program in April for approximately 10% of copper production expected in the second half of 2023.

Moving to slide four to summarize our Peru operating results during.

During the first quarter Constancia produced 21000 tons of copper 11000 ounces of gold and 552000 ounces of silver.

Program establishes a floor price of $3 95 per pound and upside to $4 28 per pound.

And lastly, we are on track to deliver our discretionary spending reduction targets by reducing growth capital and exploration spending by $65 million in 2023 compared to 2022.

Production levels were lower than in the fourth quarter of 2022 due to lower grades from the processing of stockpiles. This was anticipated as part of our mitigation efforts during a period of logistical interruptions from Peru civil unrest in early 2023.

At the end of the first quarter, our liquidity included $256 million in cash and $355 million in undrawn availability under our revolving credit facilities.

I'm very pleased with and proud of the team's efforts to successfully navigate the complex environment in Peru.

In the face of supply chain disruptions. The team has done a tremendous job to ensure that constancia maintained steady operations and strong cost control during the first quarter. The teams continue to operate safely and with the support from our local communities.

Moving to slide four to summarize our Peru operating results.

During the first quarter Constancia produced 21000 tons of copper 11000 ounces of gold and 552000 ounces of silver.

<unk> logistics have normalized since mid February and we have significantly reduced concentrate inventory buildup at the mine.

Production levels were lower than in the fourth quarter of 2022 due to lower grades from the processing of stockpiles.

This was anticipated as part of our mitigation efforts during a period of logistical interruptions from Peru civil unrest in early 2023.

All mine from pump a country in the first quarter was 897000 tons at record high grades of <unk>, 49% copper and <unk> five two grams per tonne gold.

I'm very pleased with and proud of the team's efforts to successfully navigate the complex environment in Peru.

Despite this achievement total ore mined in the first quarter was lower than the prior quarter due to processing of stockpiles in order to conserve fuel during the civil unrest period.

In the face of supply chain disruptions. The team has done a tremendous job to ensure that constancia maintain steady operations and strong cost control during the first quarter.

The logistical risk mitigation plans implemented during the first quarter together with strong continued support from the local communities enabled our plants to continue to operate uninterrupted at full capacity supplemented with approximately $3 9 million tonnes of stockpiled ore.

The teams continue to operate safely and with the support from our local communities.

Rotation logistics have normalized since mid February and we have significantly reduced concentrate inventory buildup at the mine.

All mine from pump a country in the first quarter was 897000 tons at record high grades of <unk>, 49% copper and five two grams per tonne gold.

Recoveries of all metals during the first quarter were lower than the fourth quarter due to higher levels of impurities in stockpile ore.

Coal mining activities resumed in the pump <unk> in February and the planned period of highest stripping from March to June is progressing well with mining of higher grade ore now expected to commence late in the second quarter slightly ahead of the original schedule.

Despite this achievement total ore mined in the first quarter was lower than the prior quarter due to processing of stockpiles in order to conserve fuel during the civil unrest period.

Logistics risk mitigation plans implemented during the first quarter together with strong continued support from the local communities enabled our clients to continue to operate uninterrupted at full capacity supplemented with approximately $3 9 million tonnes of stockpiled ore.

We are on track to achieve full year 2023, Peru production guidance with expected production to be higher in the second half of the year. Following a period of highest stripping activities in the pop culture pit in the second quarter.

Unit operating costs in the first quarter was 16% lower than the fourth quarter, primarily due to lower mining costs.

Recoveries of all metals during the first quarter were lower than the fourth quarter due to higher levels of impurities in stockpile ore.

Peru's cash cost for the first quarter were relatively unchanged from the prior quarter at $1 36 per pound cash cost are expected to decline to be within the 2023 guidance range with higher expected copper production and contributions from precious metal byproduct credits later this year.

We are on track to achieve full year 2023 reproduction guidance with expected production to be higher in the second half of the year. Following a period of higher stripping activities in the pub culture pit in the second quarter.

Sustaining cash costs were also relatively in line with the fourth quarter at $2.12 per pound as lower mining costs and capitalized exploration were offset by lower copper production.

Unit operating costs in the first quarter was 16% lower than the fourth quarter, primarily due to lower mining costs.

Moving to the next slide on Manitoba production at our Snow Lake operations included 36000 ounces of gold roughly 10000 tons of zinc 2000 tonnes of copper and 151000 ounces of silver.

<unk> cash cost for the first quarter were relatively unchanged from the prior quarter at $1 36 per pound cash cost are expected to decline to be within the 2023 guidance range with higher expected copper production and contributions from precious metal byproduct credits later this year.

Production of gold zinc and silver were higher than in the fourth quarter with higher throughput and higher grades copper.

Copper production was lower than the prior quarter due to lower head grades.

Sustaining cash costs were also relatively in line with the fourth quarter at $2 12 per pound as lower mining costs and capitalized exploration were offset by lower copper production.

With the completion of a number of key initiatives aimed to support higher production levels at Lalor improved metal recoveries at the mills and prioritization of mining higher gold grade zones at Laurel throughput throughout the year.

Moving to the next slide on Manitoba production at our Snow Lake operations included 36000 ounces of gold roughly 10000 tons of zinc 2000 tonnes of copper and 151000 ounces of silver.

Full year, Manitoba production of all metals remains on track to achieve guidance ranges for 2023.

Ore mined at Loral was slightly higher than the prior quarter, despite being impacted by market fragmentation issues that created delays at the rock breakers and low scoop availability in March.

Production of gold zinc and silver were higher than in the fourth quarter with higher throughput and higher grades.

We implemented changes to improve stope fragmentation in scoop availability, which together with the many production optimization initiatives underway at Lalor resulted in our achieving higher production levels of 4800 tonnes per day later in the first quarter and throughout April .

Copper production was lower than the prior quarter due to lower head grades.

The Manitoba team continues to advance key initiatives to support higher production levels and improved metal recoveries and have made significant progress in building long haul inventory optimizing the development drift size and focusing on shaft availability improvements, while minimizing inefficient trucking via the ramp.

Full year, Manitoba production of all metals remains on track to achieve guidance ranges for 2023.

Ore mined at <unk> was slightly higher than the prior quarter, despite being impacted by stock market fragmentation issues that created delays at the rock breakers and low scoop availability in March.

The first phase of the stall mill recovery project, consisting of new cyclone packs state of the art Amazon sells in the copper and zinc circuits and process control improvements is on track for commissioning in may with ramp up to higher metal recoveries by mid 2023.

Stall mill processed 19% more ore in the first quarter compared to last quarter.

The new Britannia mill continued to achieve consistent production above its nameplate capacity, averaging approximately 1590 tons per day.

We continue to advance new Britannia improvements focused on reducing reagents and grinding media consumption Beast.

These initiatives entail minimal capital outlays, while further improving overall metal recoveries and copper concentrate grades.

Combined unit operating costs in the first quarter decreased by 10% compared to the fourth quarter as a result of higher throughput arising from our production efficiency initiatives.

Stall mill processed 19% more ore in the first quarter compared to last quarter.

Yes.

Manitoba gold cash costs were $938 per ounce slightly higher than in the fourth quarter due to lower byproduct credits and higher G&A, partly offset by higher gold production.

The new Britannia mill continued to achieve consistent production above its nameplate capacity, averaging approximately 1590 tons per day.

Full year cash costs are expected to decline to be within the 2023 guidance range with increasing gold production throughout the year from higher grades and output at Lalor and the planned completion of the stall recovery project in the second quarter.

We continue to advance new Britannia improvements focused on reducing reagents and grinding media consumption. These.

These initiatives entail minimal capital outlays, while further improving overall metal recoveries and copper concentrate grades.

Bold sustaining cash costs were $1336 per ounce lower than the fourth quarter, primarily due to lower sustaining capital expenditures.

Combined unit operating costs in the first quarter decreased by 10% compared to the fourth quarter as a result of higher throughput arising from our production efficiency initiatives.

On April 13th we entered into an agreement to acquire all of the issued and outstanding common shares of copper Mountain mining Corporation to create a premier Americas focused copper mining company.

Manitoba gold cash costs were $938 per ounce slightly higher than in the fourth quarter due to lower byproduct credits and higher G&A, partly offset by higher gold production.

The combined company will have annual copper production of 150000 tons per year from three long life mines, and we will have a world class pipeline of organic copper growth projects.

Combined company will represent the third largest copper producer in Canada based on 2023 estimated copper production.

Both sustaining cash costs were $1 $336 per ounce lower than the fourth quarter, primarily due to lower sustaining capital expenditures.

The transaction is expected to close by late June .

This combination is on strategy and it offers several strategic benefits as shown on slide six.

On April 13th we entered into an agreement to acquire all of the issued and outstanding common shares of copper Mountain mining Corporation to create a premier Americas focused copper mining company.

First copper mountain enhances the scale of our business with a total of six key operating and development assets and one of the largest copper mineral resource bases among our peer group.

The combined company will have annual copper production of 150000 tons per year from three long life mines, and we will have a world class pipeline of organic copper growth projects.

It geographically balances our portfolio in top tier jurisdictions on a pro forma basis. The combined net asset value is estimated to be 55% from North America, and 45% from South America on a street consensus basis.

Combined company will represent the third largest copper producer in Canada based on 2023 estimated copper production. The transaction is expected to close by late June .

Third it increases our exposure to copper with expected 2023 copper production of more than 150000 tonnes. This is complemented by meaningful gold production that helps maintain a strong position on the copper cost curve.

This combination is on strategy and an office several strategic benefits as shown on slide six.

First copper mountain enhances the scale of our business with a total of six key operating and development assets and one of the largest copper mineral resource bases among our peer group.

We have a great opportunity to unlock value with the copper mountain mine using our high efficiency framework from our Constancia mine given the similarities between the two mines.

Second it geographically balances our portfolio in top tier jurisdictions on a pro forma basis. The combined net asset value is estimated to be 55% from North America, and 45% from South America on a street consensus basis.

With the combination provides incremental cash flows, which further strengthens the balance sheet and accelerates our deleveraging initiatives.

And lastly, the combination will allow us to unlock value from our larger organic growth pipeline by more efficiently allocating capital to projects that yield the highest risk adjusted returns.

Third it increases our exposure to copper with expected 2023 copper production of more than 150000 tons.

The combined company is well positioned to deliver sustainable cash flows with compelling organic growth as well as valuation re rate as a larger more diversified copper producer with enhanced liquidity.

This is complemented by meaningful gold production that helps maintain a strong position on the copper cost curve.

Fourth we have a great opportunity to unlock value with the copper mountain mine using our high efficiency framework from our Constancia mine given the similarities between the two mines.

The transaction meets our stringent financial and strategic acquisition criteria for pursuing value accretive opportunities and the incremental diversified cash flows will further strengthen our balance sheet and support both our deleveraging and growth initiatives.

The combination provides incremental cash flows, which further strengthens the balance sheet and accelerates our deleveraging initiatives and.

And lastly, the combination will allow us to unlock value from our larger organic growth pipeline by more efficiently allocating capital to projects that yield the highest risk adjusted returns.

Turning to slide seven we think there's substantial opportunity to unlock value at copper mountain for the benefit of all shareholders. One of our core competencies at high Bay is operating efficiency as demonstrated by Constancia is leading cost position amongst copper mines in South America.

We estimate around $30 million of annual efficiencies and synergies. This includes $10 million of annual corporate shared synergies and tax attributes and we expect to achieve an estimated $20 million per year in operating cost improvements over time through the application of our framework, improving productivity, reducing costs and achieving consistent.

Turning to slide seven we think there's substantial opportunity to unlock value at copper mountain for the benefit of all shareholders.

One of our core competencies at high Bay is operating efficiency as demonstrated by Constancia is leading cost position amongst copper mines in South America.

And stable operations at a copper mountain mine.

This further builds on the great work done by the team at site and recent positive momentum experienced at the mine.

Due to the similarity between copper mountain and Constancia, we see a tremendous opportunity to apply our team's core technical and operating capabilities and our high efficiency framework to the copper Mountain mine, we estimate around $30 million of annual efficiencies and synergies. This includes $10 million of annual corporate shared synergies and tax.

Combined with copper mountain's, leading technological at ESG practices, the operation will be positioned as an industry leader.

We also believe we will benefit from sharing services across our Canadian assets.

We've been pleased with the positive feedback we've received from shareholders of Hebei and copper mountain as this transaction offers significant value for both sets of shareholders.

Dubuque, and we expect to achieve an estimated $20 million per year in operating cost improvements over time through the application of our framework, improving productivity, reducing costs and achieving consistent and stable operations at the copper Mountain mine.

Now moving to slide eight we will have a strong presence across tier one jurisdictions in the Americas with operating and development assets in Canada, the United States and Peru.

This further builds on the great work done by the team at site and recent positive momentum experienced at the mine.

We will also have one of the best organic growth pipelines, among our peer group consisting of brownfield expansions and Greenfield development and exploration opportunities.

Combined with carbon mountains, leading technological and ESG practices, the operation will be positioned as an industry leader. We also believe we will benefit from sharing services across our Canadian assets.

Our improved leverage profile and expanded operations as a result of the copper mountain combination will allow us to more efficiently allocate capital across our business to the highest risk adjusted return projects to develop a steady stream of ongoing expansion opportunities.

Been pleased with the positive feedback we've received from shareholders of <unk> and copper mountain as this transaction offers significant value for both sets of shareholders.

As we think about the combined portfolio, we expect to immediately pursue high return and short payback initiatives such as the completion of the first phase of the stall mill recovery improvement program in Manitoba.

Now moving to slide eight we will have a strong presence across tier one jurisdictions in the Americas with operating and development assets in Canada, the United States and Peru.

When we will be able to pursue low risk minimal capital brownfield expansions such as throughput optimization at the copper Mountain mine and further stall recovery improvement programs.

We will also have one of the best organic growth pipelines, among our peer group consisting of brownfield expansions and Greenfield development and exploration opportunities.

Looking at our brownfield expansion opportunities, we're particularly excited about the deposits near Constancia.

First Maria Reyna sits in a line that joins US Bombesin 10 tire and has a radiometric footprint that is not dissimilar to these mines in scale.

Valley drilled 11, holding the property over a decade ago, which all intersected copper mineralization, starting at surface, including 160 meters of over 1% copper equivalent.

When we will be able to pursue low risk minimal capital brownfield expansions such as throughput optimization at the copper Mountain mine and further stall recovery improvement programs.

Second the Cabo, Utah mine previously operated by Mitsui until the early 19 nineties has samples, indicating the presence of high grade copper. There is also a waste rock pile that is believed to have economic mineralization given that the historical mines cutoff grade was more than 1.5% copper.

Looking at our brownfield expansion opportunities, we're particularly excited about the deposits near Constancia. The first Murray Arena sits in a line that joins <unk> tire and has a radiometric footprint that is not dissimilar to these mines in scale.

Enhancing our Brian field expansions will position the core business for future of transformational initiatives, such as our Copperweld project and better positions us for the next wave of value, creating consolidation in the copper space.

<unk> drilled 11, holding the property over a decade ago, which all intersected copper mineralization, starting at surface, including 160 meters of over 1% copper equivalent to.

Pre feasibility activities for the private land phase one of the copper World project are well advanced in the pre feasibility study is expected to be released in mid 2023.

Clearing and grading work to prepare for the future development of Copperweld continues at site, including the construction of roads and other facilities.

We commenced the permitting process for copper world with the approval of a mind land reclamation plan back in May 2022.

This approval by the Arizona State mine Inspector was challenged in state Court, but the challenge was dismissed in May 'twenty through 'twenty three is having no basis.

We continue to expect to receive the two outstanding state permits in 2023.

Pre feasibility activities for the private land phase one of the Copperweld project are well advanced in the pre feasibility study is expected to be released in mid 2023.

The aquifer protection permit and an air quality permit and we are encouraged by the continued positive permitting outcomes for a couple of project.

Clearing and grading work to prepare for the future development of Copperweld continues at site, including the construction of roads and other facilities.

Upon receipt of these state level permits we will evaluate a bulk sample program to continue to Derisk. The project by testing grade continuity variable cutoff effectiveness and metallurgical strategies.

We commenced the permitting process for copper world with the approval of a mind land reclamation plan back in May 2022.

This approval by the Arizona State mining Inspector was challenged in state Court, but the challenge was dismissed in May 'twenty through 'twenty three is having no basis.

We continue to expect to receive the two outstanding state permits in 2023 <unk>.

The aquifer protection permit and an air quality permit and we are encouraged by the continued positive permitting outcomes for a couple of project.

The Mason project is a large greenfield copper deposit located in the historic Harrington District of Nevada, and is one of the largest undeveloped copper porphyry deposits in North America.

Upon receipt of these state level permits we will evaluate the bulk sample program to continue to Derisk. The project by testing, great continuity variable cutoff effectiveness and metallurgical strategies.

We completed a PPA in 2021, which demonstrated robust project economics from a 27 year mine life operation.

We acquired nearby properties hosting several historical underground copper mines that were in production in the early 19 hundreds.

We also intend to initiate a minority joint venture partner process. Following receipt of permits which will allow a potential joint venture partner to participate in the funding of definitive feasibility study activities in 2024 as well as in the final project designed for copper World.

There is an opportunity to further enhance the project economics through exploration for higher grade satellite deposits on a prospective land package near Mason, We expect test. These high grade targets with an initial drill program planned for late 2023.

The Mason project is a large greenfield copper deposit located in the historic hearings in district of Nevada, and is one of the largest undeveloped copper porphyry deposits in North America.

Turning to slide nine for an update on our 2023 exploration initiatives.

Peru exploration activities recommenced with a focus on drill permitting for our highly prospective satellite properties, while evaluating the potential for reserve expansion at Constancia and public conscious through future mining phases.

We completed a PPA in 2021, which demonstrated robust project economics from a 27 year mine life operation.

We acquired nearby properties hosting several historical underground copper mine that we are in production in the early 19 hundreds.

We complete we are completing a limited drill program and technical evaluations at the Constancia deposit to confirm the economic viability of adding an additional mining phase to the current mine plan that will convert a portion of the mineral resources to mineral reserves.

There is an opportunity to further enhance project economics through exploration for higher grade satellite deposits on a prospective land package near Mason, We expect test. These high grade targets with an initial drill program planned for late 2023.

We're also completing a drill program at the pump country deposit to test mineral reserve extension potential.

Turning to slide nine for an update on our 2023 exploration initiatives.

The results from the drilling programs in technical and economic evaluations are expected to be incorporated in our next annual mineral reserve and resource update.

As mentioned earlier, the past producing Cabo, Utah property in the highly prospective Maria Reyna property located in close proximity to the Constancia processing facility.

We complete we are completing a limited drill program and technical evaluations at the Constancia deposit to confirm the economic viability of adding an additional mining phase of the current mine plan that will convert a portion of the mineral resources to mineral reserves.

We commenced early exploration activities at these sites after completing a surface rights exploration agreement with the community last year.

Surface investigation activities, together with baseline environmental and archaeological activities necessary to support drill permit applications have been completed.

We're also completing a drill program at the country deposit to test mineral reserve extension potential.

Drill permit applications are expected to be submitted in the coming months.

The results from the drill programs in technical and economic evaluations are expected to be incorporated in our next annual mineral reserve and resource update.

And in Manitoba are snow Lake exploration activities are prioritizing step out drilling for new discoveries to support future growth in annual production and mine life extension at.

As mentioned earlier, the past producing Cabo detailed property in the highly prospective Maria Reyna property are located in close proximity to the Constancia processing facility.

<unk> 2023 winter exploration program intersected many occurrences of disseminated copper sulfides over two kilometers down plunge, indicating the proximity of copper gold feeder zones similar to the deeper lenses at lalor.

We commenced early exploration activities at these sites after completing a surface rights exploration agreement with the community last year.

The program included four drill rigs testing the down plunge gold and copper extensions of the Lalor deposit in the first step out drilling in the deeper zones at Lalor since the initial discovery in 2009.

Surface investigation activities, together with baseline environmental and archaeological activities necessary to support drill permit applications have been completed.

Drill permit applications are expected to be submitted in the coming months.

While assays are still pending we will continue to analyze these results and perform additional geophysics to refine the next phase of drilling in 2024.

And in Manitoba, a snow Lake exploration activities are prioritizing step out drilling for new discoveries to support future growth in annual production and mine life extension at.

One additional drill rig in snow Lake is testing a geophysical anomalies located within 400 meters of the existing Lawler our underground infrastructure.

2023 winter exploration program intersected many occurrences of disseminated copper sulfides over two kilometers down plunge, indicating the proximity of copper gold feeder zones similar to the depot lenses at Lalor.

Or drill holes were completed during the winter drill program and assay results from the base metal in copper gold mineralized intercepts identified from core logging are pending.

The program included four drill rigs testing the down plunge gold and copper extensions of the Lalor deposit in the first step out drilling in the deepest zones at <unk> since the initial discovery in 2009.

To close off I would like to reiterate our commitment to operating in a manner that demonstrates our focus on the environment and we are proud of our already low carbon footprint as seen on slide 10.

While assays are still pending we will continue to analyze these results and perform additional geophysics to refine the next phase of drilling in 2024.

<unk> change initiatives include committing to achieve net zero greenhouse gas emissions by 2050 with an interim target of a 50% reduction in scope, one and scope two emissions by 2030.

One additional drill rig in snow Lake is testing a geophysical anomaly located within 400 meters of the existing underground infrastructure.

We've identified multiple opportunities through our emissions reduction roadmap to achieve further reductions across the business.

Four drill holes were completed during the winter drill program and assay results from the base metal in copper gold mineralized intercepts identified from core logging are pending.

In the first quarter of 2023, we completed two initiatives that will lead to further carbon footprint reductions.

Close off I'd like to reiterate our commitment to operating in a manner that demonstrates our focus on the environment and we are proud of our already low carbon footprint.

First we signed a new 10 year power purchase agreement with Engie, Peru for access to a 100% renewable energy supplier for our Constancia operation starting in January 2026.

On slide 10.

<unk> change initiatives include committing to achieve net zero greenhouse gas emissions by 2050 with an interim target of a 50% reduction in scope, one and scope two emissions by 2030.

To move to this new provider is expected to reduce total current companywide scope, one and scope two greenhouse gas emissions by 40% during the life of the contract positioning the company well to achieve our 2030 climate change targets of 50% emission reductions.

We've identified multiple opportunities through our emissions reduction roadmap to achieve further reductions across the business.

The second will be to integrate copper mountain, leading climate change initiatives into HUD based framework to further improve our carbon footprint.

In the first quarter of 2023, we completed two initiatives that will lead to further carbon footprint reductions.

First we signed a new 10 year power purchase agreement with Engie, Peru for access to 100% renewable energy supplier for our Constancia operation starting in January 2026.

Copper Mountain mine has the potential to be the lowest emitting open pit copper mine in the world by 2035 through the implementation of several net zero carbon initiatives. This.

This includes the recent successful commissioning of electric trolley assist haulage.

Move to this new provider is expected to reduce total current companywide scope, one and scope two greenhouse gas emissions by 40% during the life of the contract positioning the company well to achieve our 2030 climate change target of 50% emission reductions.

There are also actively testing and researching renewable diesel hydrogen battery and fuel cell technology for haulage.

We'll have the ability to apply copper mountain expertise and carbon reduction initiatives to the Constancia mine and the Copperweld project.

The second will be to integrate copper mountain, leading climate change initiatives into high based framework to further improve our carbon footprint.

I'll conclude the presentation on slide 11.

We believe that copper has the best long term supply demand fundamentals in the sector as global copper mine supply will be unable to meet demand from global Decarbonization initiatives High Bay is uniquely positioned to benefit from the strong outlook for copper with attractive copper production growth and significant long term optionality for investors through.

Copper Mountain mine has the potential to be the lowest emitting open pit copper mine in the world by 2035 through the implementation of several net zero carbon initiatives.

This includes the recent successful commissioning of electric trolley assist haulage.

They are also actively testing and researching renewable diesel hydrogen battery and fuel cell technology for haulage.

Our leading organic growth pipeline.

With the addition of the copper Mountain mine, we will be well positioned to re rate towards our larger base metal peers with enhanced production trading liquidity and scale High Bay offers investors the highest near term free cash flow yields coupled with significant long term upside through our leading copper mineral resource space and with that we have.

We will have the ability to apply cough mountain's expertise and carbon reduction initiatives to the Constancia mine and the Copperweld project.

I'll conclude the presentation on slide 11, we believe that copper has the best long term supply demand fundamentals in the sector as global copper mine supply will be unable to meet demand from global Decarbonization initiatives High Bay is uniquely positioned to benefit from our strong outlook for copper with attractive copper production growth and Cigna.

Pleased to take your questions.

Thank you ladies and gentlemen, we will now begin the question and answer session to join the question queue. You May Press Star then one on your telephone keypad, you'll hear a tone acknowledging your request.

<unk> long term optionality for investors through our leading organic growth pipeline.

If you are using a speakerphone. Please pick up your handset before pressing any keys to withdraw. Your question. Please press Star then two we will pause for a moment as callers join the queue.

With the addition of the copper Mountain mine, we will be well positioned to re rate towards our larger base metal peers with enhanced production trading liquidity and scale hydro.

Our first question comes from Rs.

<unk> offers investors the highest near term free cash flow yields coupled with significant long term upside through our leading copper mineral resource space and with that we're pleased to take your questions.

With Scotiabank. Please go ahead.

Hi, Good morning, Peter I'm curious on your earlier comments about diluting the exposure to Peru through the copper Mountain acquisition I think you mentioned a number of.

Thank you ladies and gentlemen, we will now begin the question and answer session to join the question queue. You May Press Star then one on your telephone keypad, you will hear a tone acknowledging your request.

Your non per exposure now would be about 55% of NAV.

When I think forward here in terms of the next couple of years, certainly probably the biggest upside too.

If youre using a speakerphone please pick up your handset before pressing any keys to withdraw your question. Please press Star then two we will pause for a moment as callers join the queue.

NAV estimates could be the exploration potential around constancia with Maria Reyna Cabot Ito.

Wouldn't that actually sort of reverse the copper mountain.

Our first question comes from RF Codell with Scotiabank. Please go ahead.

<unk> advantage and I'm just curious if you if you have a target in mind in terms of where you'd like to get that exposure.

Hi, Good morning, Peter I'm curious on your earlier comments about diluting the exposure to Peru through the copper Mountain acquisition I think you mentioned the number of.

Saying that youre going to have a potential upside with the exploration in Peru.

Morning, Garth and thank you for that portable question.

Your non career exposure now would be about 55% of NAV.

So you're absolutely right. So we have we are reducing exposure through increasing exposure in North America.

When I think forward here in terms of the next couple of years, certainly probably the biggest upside to our NAV estimates could be the exploration potential around constancia with Maria Reyna Cabot Ito.

That doesn't mean that we like Peru any less.

Frankly.

I think you've heard me say many many times before that I believe I believe I believed in Peru for the last two and a half decades for.

That actually sort of reverse the copper mountain.

Advantage and I'm just curious if you if you have a target in mind in terms of where you'd like to get that career exposure, knowing that youre going to have a potential upside with the exploration in Peru.

<unk> tends to go through these ups and downs in cycles in.

<unk>.

Social unrest or whatever you want to call it but.

I am convinced that Peru is a good place to be.

Morning <unk>.

<unk> has I believe one of the best operating Workforces in a copper mine in the world and its something that we need to lever going forward now.

Q4 that portable question.

You're absolutely right. So we have we are reducing exposure through increasing exposure in North America.

Correct once we.

Doesn't mean that we like Peru any less.

Establish exactly what it is that we have at Maria Reyna, and Cabot, Utah. It certainly does have that potential.

Frankly.

I think you've heard me say many many times before that I believe I believe I believed in Peru for the last two and a half decades.

To change that distribution.

But also remember that at some point, we will develop the copperweld project, which sort of tends to adjust that further.

For retailers to go through these ups and downs in cycles in.

Sure.

Social unrest or whatever you want to call it but.

We're not targeting any residual.

I am convinced that Peru is a good place to be Constancia has I believe one of the best operating Workforces in a copper mine in the world and its something that we need to lever going forward now.

Distribution, we just think that that the current.

Initiative with copper world.

<unk> is the company to a better place, but I am convinced that <unk> and Maria Reyna will be operations in the near term that will significantly improve HUD bay's access to copper and production profile.

Correct once we.

Establish exactly what it is that we have at Maria Reyna, and Cabot, Utah. It certainly does have the potential.

To change that distribution, but also remember that at some point, we will develop the copperweld project, which sort of tends to adjust that further.

Since you've asked the question I, probably take the opportunity to say that we've been really happy.

With turn of events in Peru, It looks like president below RTA is doing a really good job of stabilizing the environment.

Kind of we're not targeting any residual distribution, we just think that that the current.

It looks like she has appointed a qualified cabinet and it looks like we are enjoying a period of.

Initiative with copper World raises the company to a better place, but I am convinced that <unk> and Maria Reyna will be operations in the near term that will significantly improve high base access to copper and production profile.

<unk>.

I would say relative.

Quiet and I expect this to proceed for some time, we certainly are having no issues with preceding with the bureaucracy with our initiatives towards.

Getting our exploration permits for cabrito end.

Since you've asked the question I'll, probably take the opportunity to say that we've been really happy.

And Maria Reyna, so so.

Quick answer is yes, we are readjusting, our distribution geographically in the short term, but over the long term together with <unk>.

With turn of events in Peru, It looks like President <unk> is doing a really good job of stabilizing the environment. It.

It looks like she has appointed a qualified cabinet and it looks like we are enjoying a period of.

Maria Reyna, Kavita as well as copperweld, we sort of expect to maintain roughly the same distribution.

Thanks, Peter as a quick follow up do you see more opportunities like copper mountain out there that potentially.

<unk>.

I would say relative.

Quiet and I expect this to proceed for some time, we certainly are having no issues with proceeding with a bureaucracy with our initiatives towards.

Potentially they could take advantage of it.

You know, we always continue to look for those opportunities are.

We've always said that they are hard to come by because of our [laughter].

Getting our exploration permits for Kavita and.

Pretty pretty firm and disciplined approach to acquisitions. If there is something out there certainly would be interested in it but focused one.

And Maria Reyna, so so.

Quick answer is yes, we are readjusting, our distribution geographically in the short term, but over the long term together with.

Priority number one right now is too.

Maria Reyna, Kavita as well as copperweld, we sort of expect to maintain roughly the same distribution.

Combined copperweld into the portfolio and then we're starting I'm, sorry, copper mountain into the portfolio and then we'll think about what might be next.

Thanks, Peter as a quick follow up do you see more opportunities like copper mountain out there that potentially.

Thank you very much.

Potentially they could take advantage of it.

Once again, if you have a question. Please press Star then one our next question comes from Ralph <unk> of eight capital. Please go ahead.

We always continue to look for those opportunities and we've always said that they are hard to come by because of our.

Pretty pretty firm and disciplined approach to acquisitions. If there is something out there, we certainly would be interested in it but focused one.

Thanks, operator, thanks for taking my question, Peter I wanted to come back to the.

The move to 100% renewables at Constancia and just wondering what exactly are those renewable sources. Starting in 2026 is this capacity currently installed and maybe give us a little bit of flavor on how much power currently accounts for the constancia cost structure, and whether or not we can see some potential savings there.

Priority number one right now.

Is too.

Combined copperweld into the portfolio and then you'll start seeing im sorry, copper mountain into the portfolio and then we'll think about what might be next.

Thank you very much.

Good morning, Ralph Thanks for that question so.

Once again, if you have a question. Please press Star then one our next question comes from Ralph <unk> of eight capital. Please go ahead.

As far as the.

Exactly how.

And geez.

Energy assets are configured I don't know the answer to that off hand, it certainly I mean, we negotiated this agreement over a long period of time being a highly competitive bidding process.

Thanks, operator, thanks for taking my question, Peter I wanted to come back to the.

And the team in Peru assures me that this is that we will have 100% renewable.

<unk>.

Good morning, Ralph Thanks for that question so.

Okay.

Robert.

If I could add.

As far as the <unk>.

Dan.

Exactly how.

Green certificates for the synergies.

<unk>.

Energy assets are configured.

Contract starts in January 2026, so I think it is.

I don't know the answer to that off hand, it certainly I mean, we negotiated this agreement over a long period of time being a highly competitive bidding process.

728 gigawatt hours.

Renewable energy credits.

That's.

We consume about 710, so slightly and access.

And the team in Peru assures me that this is that we will have a 100% renewable.

What the contract is for and it begins in 2026.

The source of electricity, but my understanding is that it is almost all hydro.

Okay, great. Yeah, that's helpful for context I appreciate that.

If I could ask a follow up Peter it's been a while since we've heard about the tailings reprocessing opportunity and I understand that you are looking at are some metallurgical testing can you talk a little bit about the differing metallurgical techniques and technologies that youre looking at and sort of where does that stand on sort of bringing that forward and perhaps seeing some value there.

And wind.

Okay.

Got it.

If I could add we get.

Yes.

Green certificates for the synergies.

The contract starts in January 2026.

728 gigawatt hours a year.

As you sort of thinking about prioritizing, perhaps other bigger larger scale projects.

These are renewable energy credits.

Yes.

We consume about 710, so slightly and access.

So I'll have the first kick off the answer of that Ralph and then I'll ask Andre to maybe provide a little bit more color, but we do can we continue to conduct metallurgical test programs and you evaluate metallurgical technologies to assist the processing viability of the tails, which of course, if positive will lead to a future mineral resource estimate.

Whats contracted 400 begins in 2026.

Okay, Great. That's helpful for context I appreciate that.

If I could ask a follow up Peter it's been a while since we've heard about the tailings reprocessing opportunity and I understand that youre looking at.

But that said we've also identified the opportunity to reprice the anniston tailings in snow Lake given the significant amount of gold that's been deposited there over many many decades and also given the close proximity to existing producing infrastructure at stall and new Britannia and the fact that production from snow Lake is on streamed.

Some metallurgical testing can you talk a little bit about the differing metallurgical techniques and technologies that youre looking at and sort of where does that stand on sort of bringing that forward and perhaps seeing some value there.

As you sort of thinking about prioritizing, perhaps other bigger larger scale projects.

So so we may also consider tailings reprocessing opportunities in snow Lake as future phases of our storm recovery projects permit, but with respect to exactly what you asked with respect to technology.

<unk> technologies in.

Which of course, if positive will lead to a future mineral resource estimate.

In <unk>, perhaps Andre can provide a little bit of color there.

But that said we've also identified the opportunity to reprice the Anderson tailings in snow Lake given the significant amount of gold that's been deposited there over many many decades and also given the close proximity to existing producing infrastructure at stall and new Britannia and the fact that production from snow Lake is on streamed.

Sure sure. Thanks, Rod so I'll start with the easier one and less complicated when it slowly so we're looking at it as well in the snow Lake operations.

And the technology that we're looking at is.

Very similar to what we what we have.

So we may also consider tailings reprocessing opportunity in snow Lake as future phases of our storm recovery projects permit.

In the tails, so our historical tailings and slowly have a mixture of copper zinc and gold.

With respect to exactly what you asked with respect to technology.

Technologies in.

Lower recoveries that we would have we would like today.

In <unk>, perhaps Andre can provide a little bit of color there.

So what we've done in snow Lake was.

Sure sure. Thanks, Rod so I'll start with the easier one and less complicated when it slowly so we're looking at it as well in the snow Lake operations.

Put in place a cyanide process and the process that we would have to do to treat the tails would be managing.

And the technology that we're looking at.

Some of them towards the colleague MRO type circuit, managing the base metals force before.

Very similar to what we what we have.

Extracting the strike will go in in.

Ed.

Yes, with some slight modifications to be able to to deal with some base metals et cetera in the in the tails. So our historical tailings and slowly have a mixture of copper zinc and gold.

<unk>, it's a little different.

And.

It has both similar copper.

And zinc in Angola, the zinc as much finer grind.

Lower recoveries that we would have we would like today.

And the process that we're looking at right now is is how do we.

How to extract the elemental sulfur.

So what we've done in snow Lake was.

<unk> put in place a cyanide process and the <unk>.

From.

From the tales and Theres, a variety of metallurgical technologies.

So we would have to do to treat the tails will be managing our risk.

We're testing right now and it's still very early days.

Something similar towards a colleague of Merrill Crowe circuit, managing the base metal source before extracting the strike will go.

Understood. Thanks for those answers I appreciate it thank you.

In <unk>, it's a little different.

You're welcome.

And it.

Our next question comes from Farooq Ahmed of Raymond James. Please go ahead.

It has both similar copper.

And zinc in Angola, the zinc as much finer grind and the process that we're looking at right now is how do you.

Hi, good morning.

I'll just forget a couple of the corporate actions that you've taken in the quarter.

Specifically pushing back your gold prepay.

How to extract.

The elemental sulfur.

And then the hedging some of your copper in the second half of the year.

From.

From the tales and Theres a variety of metallurgical.

Technologies.

And then so it looks like you're protecting your cash flows in the second half of the year and I was just wondering if you could give some insight.

That.

We're testing right now and it's still very early days.

As to why you are taking these extraordinary measures tighter protect Marshall your cash in the back half of the year is there is there something in the plan for the back half of the year that maybe were not as well understood.

Understood. Thanks for those answers I appreciate it thank you.

You're welcome.

Our next question comes from Farooq Ahmed of Raymond James. Please go ahead.

Hi, Farooq. Thank you Jane here Thanks for the question.

Hi, good morning.

Just looking at a couple of the corporate actions that you've taken in the quarter.

They are really measures taken to ensure that we have strong free cash flow generation.

Specifically pushing back your gold prepay.

Throughout the year and maybe the first measure was the deferral of the gold prepay and we started we did that.

And then the hedging some of your copper in the second half of the year.

In February and we did.

And also it looks like you're protecting your cash flows in the second half of the year and I was just wondering if you could give some insight at.

Monthly payments are gold and <unk>.

Where.

There were some prove uncertainty as Peter highlighted and we want to ensure that we got access to that.

As to why you are taking these extraordinary measures tighter protect our remarks of your cash in the back half of the year is there is there something in the plan for the back half of the year that maybe is not as well understood.

Our monthly cash flow basis.

Obviously, having the gold price move up since we've made that.

Earl has helped the cost of it the cost of it was roughly 3%.

Thank you Jane here, Thanks for the question.

They're really measures taken to ensure that we have strong free cash flow generation throughout the year and maybe the first measure was the deferral of the gold prepay and we start with that.

Which is a lot cheaper than we'll call it a normalized cost of capital and with the gold price increase that we've experienced the cost of that deferrals actually.

Causes Europe .

So I think it was a sort of effective way of.

In February we deferred eight monthly payments is a goal announced in a period where.

Capital management for the year.

As we indicated with our guidance.

There were some crew uncertainty as.

The production of copper for Peru is backend weighted that's about 60% in the second half and so as we look forward to this year much of that production is going to be in the second half and given the volatility in the markets.

As Peter highlighted and we want to ensure that we got access.

Free cash flow basis.

Obviously, having the gold price move up since we've made that.

<unk> has helped the cost of that the cost of it was roughly 3%, which.

We've seen your data already we want to make sure that.

Which is a lot cheaper than we'll call it a normalized cost of capital and with the gold price increase that we experienced the cost of that deferrals actually post.

But we could be up against opportunistic too to ensure that we were.

We're going to get that free cash flow at the end of the year. So I think youll see a floor of $3 95, and a ceiling of four at 2008 for 10% of that production is done on a monthly basis and so that just ensure some smoothing.

Zero.

At the moment, so I think it was a sort of effective way of.

Capital management for the year.

As we indicated with our guidance.

The production of copper for Peru is backend weighted that's about 60% in the second half and so as we look forward to this year much of that production is going to be the second half and given the volatility in the markets.

Our prices.

Box and some sense of uncertainty I think that 390 floor is probably the highest florida, but youll see them in the cost of colors that appear to that so I think I'll just add.

Opportunity for us.

To manage through what we expect to be strong.

We've seen your data already we want to make sure that.

<unk> cash flow generation period of the company. So that we meet our deleveraging targets that we outlined earlier this year.

But we could be up against opportunistic too to ensure that we were.

Kind of get that free cash flow at the end of the year. So I think youll see a floor of $3 95, and a ceiling of four at 28 or 10% of that production is done on a monthly basis and so that just ensure some sense looting.

So thanks for that Eugene I guess I'm, just wondering I mean like you said the back half of the year supposed to be stronger.

You're supposed to have kind of better operating performance back half of the year. So you think you would naturally have better cash flows.

<unk> I don't think that there's any major capital program in the back half of the year that I can think of I'm just trying to understand.

Of prices.

Box and some uncertainty I think that 394 is probably the highest floor that youre, assuming that cost of colors that appear to dance.

Why or why you're wanting to protect those cash flows as are.

Most operators when they're just operating normally they won't put in a hedge program like that and so I'm just trying to understand like what specifically was the reason that you've identified the back half of the year is something that you wanted to protect the cash flows.

Opportunity for us.

To manage through what we expect to be strong.

<unk> cash flow generation period of the company. So that we meet our deleveraging targets that we outlined earlier this year.

Thanks for that Eugene I guess I'm, just wondering I mean, like you said the back half of the year supposed to be stronger.

It wasn't it wasn't any capital program that we.

Back to embark on I think we as you saw the guidance annual guidance were.

You're supposed to have kind of better operating performance back half of the year, So you'd think you'd naturally have better cash flow.

Reducing discretionary spending this year at Cotai generate free cash flow and I think it's with those targets to make sure that we come out on the back of the year with a lower net debt to EBITDA and a stronger cash balance as we go into 2024.

To begin with I don't think that Theres any major capital program in the back half of the year that I can think of I'm, just trying to understand why or why you're wanting to protect those cash flows as they're in.

We estimate.

Most operators when they're just operating normally they won't put in a program like that and so I'm just trying to understand like what specifically was the reason that you've identified the back half of the year is something that you wanted to protect the cash flows.

Copper world in 'twenty, five and beyond so just ensuring that that debt.

That we got that so instead of maybe the back half of the year prices are weaker that we lose out on that cash flow generation, so just laying a little bit.

It wasn't it wasn't any capital program that we.

Of a protection for us to ensure strong free cash flow generation.

Back to embark on and I think we as a result, our guidance annual guidance were.

No spending.

Significant.

The increase that we had an unplanned.

Okay. Thanks, that's helpful.

Once again, if you have a question. Please press Star then one.

Decisions that we estimate.

The fact of copper world in 'twenty, five and beyond so just ensuring that.

This concludes our question and answer session I would like to turn the conference back over to Candace Brule for any closing remarks.

We get that.

Instead of maybe the back half of the year if prices are weaker that will lose out on that hassle generations.

Thank you operator, and thank you everyone for joining us today. If you have any further questions. Please feel free to reach out to our Investor Relations team. Thank you and have a great day.

Just laying a.

A little bit.

Protection for us to ensure strong free cash flow generation.

No spending.

This concludes today's conference call you may disconnect. Your lines. Thank you for participating and have a pleasant day.

<unk>.

The increase that we had an unplanned.

Okay. Thanks, that's helpful.

Once again, if you have a question. Please press Star then one.

This concludes our question and answer session I would like to turn the conference back over to Candace Brule for any closing remarks.

Thank you operator, and thank you everyone for joining us today. If you have any further questions. Please feel free to reach out to our Investor Relations team.

Thank you and have a great day.

Okay.

This concludes today's conference call you may disconnect. Your lines. Thank you for participating and have a pleasant day.

Yeah.

Yes.

Hudbay Minerals Inc. Q1 2023 Earnings Call

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