Hudbay maintains full-year output guidance following strong second-quarter performance
Canadian mining company Hudbay Minerals has reported a strong second-quarter performance, with revenues of $631.3-million, net earnings attributable to owners of $137.4-million, adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) of $321.2-million and adjusted net earnings attributable to owners of $113.5-million.
This, the company says, is supported by a steady operating performance, strong margins and higher exposure to copper and gold.
The company produced 28267 t of copper and 51234 oz of gold during the second quarter, with copper production having increased in line with quarterly expectations. Gold output was slightly below planned levels.
Hudbay has also reported consolidated cash costs, net of by-product credits, of negative $0.40/lb of copper and sustaining cash costs of $1.39/lb.
Meanwhile, the company has also reaffirmed its full-year production guidance of 110000 t to 138000 t of copper and 217000 oz to 272000 oz of gold, as well as raised its full-year consolidated cash cost guidance to between negative $0.45/lb and negative $0.25/lb of copper, from a previous guidance of negative $0.30/lb to negative $0.10/lb, citing stronger-than-expected gold by-product credits and continued operating efficiencies that more than offset higher fuel and consumables costs.
Hudbay’s Peru operations produced 19446 t of copper and 5282 oz of gold during the second quarter, despite a planned semi-yearly maintenance shutdown, and cash costs of $1.66/lb outperformed the lower end of a yearly guidance of $1.70/lb to $2.10/lb.
In the Canadian province of Manitoba, the company’s operations produced 40344 oz of gold, 2366 t of copper, 4760 t of zinc and 209478 oz of silver, and gold cash costs of $776/oz remained within the yearly guidance of $500/oz to $800/oz.
Hudbay’s British Columbia operations delivered 6 455 t of copper, 5608 oz of gold and 71178 oz of silver. Cash costs of $3.22/lb were above the yearly guidance range owing to higher fuel prices and maintenance timing, although the company expects costs to improve in the second half of this year.
Further, the company notes that its second-quarter earnings a share attributable to owners were $0.34, while adjusted earnings a share were $0.28.
Notably, Hudbay has ended the quarter with cash and cash equivalents of $890.9-million and total liquidity of $1.04-billion after repaying more than $200-million in long-term debt and receiving the initial cash contribution of about $420-million from integrated trading and investment company Mitsubishi Corporation following the completion of the Copper World joint venture transaction.
The company has also generated $297-million in operating cash flow during the quarter and free cash flow of $101.8-million, taking first-half free cash flow to more than $200-million despite investing more than $200-million in sustaining capital.
During the quarter, the company repaid $472.5-million of senior unsecured notes using available cash and a drawdown on its revolving credit facilities, and also raised $52-million through a solid waste disposal revenue bond offering to support eligible Copper World development costs in the US state of Arizona.
Meanwhile, Hudbay says its capital allocation framework continues to prioritise investment in brownfield and greenfield growth projects, exploration and strategic investments while balancing debt reduction, share buybacks and dividends.
The company points out that a definitive feasibility study (DFS) for the Copper World project remains on track for completion later this year, with a project sanctioning decision expected late in the year.
Hudbay has also completed its acquisition of emerging copper developer Arizona Sonoran Copper Company, strengthening its US copper growth pipeline through the staged development of the Copper World and Cactus projects in Arizona.
About $30-million will be invested at Cactus during the second half of this year to advance prefeasibility study (PFS) work, exploration and site derisking.
Elsewhere, Hudbay notes that exploration continued across the Snow Lake district, in Manitoba, to expand mineral reserves and identify additional mill feed opportunities.
In Peru, the company has received government approval to increase permitted yearly mill processing capacity at Constancia from 31-million tonnes to 34-million tonnes. Hudbay has also continued its initial PFS work at the Mason copper project, in Nevada, in the US.
“Our diversified operations in Canada and Peru continued to achieve operating efficiencies and deliver strong gold by-product credits, which have more than offset external cost pressures and allowed us to improve our 2026 full-year consolidated cash cost guidance.
“Our Copper World project is on track for sanctioning later in 2026, and our recent acquisition of the Cactus project brings together two highly complementary assets in Arizona and solidifies our position as a premier Americas-focused copper producer with a pipeline of long-life, low-cost assets in Tier 1 jurisdictions,” Hudbay Minerals CEO Peter Kukielski comments.
