Release Date: November 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Hudbay Minerals Inc (HBM, Financial) reported strong operational and financial performance in Q3 2024, with steady free cash flow generation and continued debt reduction.
- Record gold production was achieved in Manitoba, driven by new quarterly record throughput levels at the New Britannia mill.
- The company improved its full-year 2024 consolidated cash cost guidance to a range of $0.65 to $0.85 per pound of copper, down from the previously announced range.
- Hudbay Minerals Inc (HBM) reduced net debt by more than $500 million over the past 12 months, significantly improving its balance sheet flexibility.
- The company achieved a 42% increase in adjusted EBITDA compared to the previous quarter, reaching $206 million.
Negative Points
- Consolidated copper production is expected to trend towards the lower end of the guidance range for 2024.
- Copper production in British Columbia is expected to be slightly below the low end of the 2024 guidance range due to lower grades in stockpiled ore.
- The stabilization phase at Copper Mountain is ongoing, with a long timeline to reach steady state operations.
- Hudbay Minerals Inc (HBM) faces uncertainties related to the permitting process for its Copper World project, which could impact timelines.
- The company is experiencing higher mining and freight costs in Peru, which could affect overall cost performance.
Q & A Highlights
Q: Are you reprioritizing the mining plan in Manitoba to focus on gold zones due to the strong gold price environment?
A: Peter Kukielski, CEO: No, we are not prioritizing gold zones. The New Britannia mill is performing well, and we are following the mine sequence, which naturally transitions to more gold-rich areas over time. Improved dilution control is also contributing to better-than-expected grades.
Q: Can you provide insight into the anticipated gold grade for Dexter in Manitoba?
A: Andre Lauzon, COO: We are finalizing our budgets for next year, but we expect the gold grade to be similar to this year's range. More clarity will be provided in the future.
Q: Is there a change in the timeline for potential throughput expansion at Constancia?
A: Andre Lauzon, COO: We are actively working on increasing throughput, with trials on pebble rejection and engineering for pebble crushers underway. The increased throughput is not a long-term goal but something we are addressing now.
Q: Given Constancia's performance, are you considering scaling up operations beyond the 10% regulatory allowance?
A: Peter Kukielski, CEO: We are preparing Constancia for potential future expansions, especially with satellite operations. We are looking at flotation and grinding capacity expansions and considering a third line, contingent on successful exploration at Maria Reyna and Caballito.
Q: Why consider selling a 30% stake in Copper World when you have strong free cash flow?
A: Eugene Lei, CFO: We aim to maximize risk-adjusted value for shareholders. Bringing in a partner allows us to build Copper World with lower leverage and provides financial flexibility to allocate capital to other high-return projects in our pipeline.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
