Strength to Build the Futures23.q4cdn.com/405985100/files/doc...results of current exploration activities, possible variations in ore grade, dilution or recovery rates, permitting

Second Quarter 2010 ResultsAugust 5, 2010

Strength to Build the Future

2 June 2010

Forward Looking InformationThis presentation contains "forward-looking information" within the meaning of applicable securities laws. Forward-looking information includes but is not limited to information concerning the company’s ability to develop its Lalor project and 777 North expansion, the ability to maintain a regular dividend on its common shares and the ability to obtain a listing on the New York Stock Exchange, the ability of management to execute on key strategic and operational objectives, the ability to meet production forecasts, the potential impact of changing economic conditions on HudBay’s financial results and the company’s strategies and future prospects. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects", or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", “understands” or "does not anticipate", or "believes" or variations of such words and phrases or statements that certain actions, events or results “will”, "may", "could", "would", "might", or "will be taken", "occur", or "be achieved". Forward-looking information is based on the views, opinions, intentions and estimates of management at the date the information is made, and is based on a number of assumptions and subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated or projected in the forward-looking information (including the actions of other parties who have agreed to do certain things and the approval of certain regulatory bodies).

Many of these assumptions are based on factors and events that are not within the control of HudBay and there is no assurance they will prove to be correct. Factors that could cause actual results or events to vary materially from results or events anticipated by such forward-looking information include the ability to develop and operate the Lalor project on an economic basis, geological and technical conditions at Lalor differing from areas successfully mined by Lalor in the past, the ability to meet required solvency tests to support a dividend payment, and in accordance with anticipated timelines, risks associated with the mining industry such as economic factors (including costs of construction materials, future commodity prices, currency fluctuations and energy prices), failure of plant, equipment, processes and transportation services to operate as anticipated, including new and upgraded facilities at Lalor, dependence on key personnel, employee relations and availability of equipment and skilled personnel, environmental risks, government regulation, actual results of current exploration activities, possible variations in ore grade, dilution or recovery rates, permitting timelines, capital expenditures, reclamation activities, land titles, and social and political developments and other risks of the mining industry, as well as those risk factors discussed in the company’s Annual Information Form dated March 30, 2010, which risks may cause actual results to differ materially from any forward-looking statement.

Although HudBay has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be anticipated, estimated or intended. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. HudBay undertakes no obligation to update forward-looking information if circumstances or management's estimates or opinions should change except as required by applicable securities laws, or to comment on analyses, expectations or statements made by third parties in respect of HudBay, its financial or operating results or its securities. The reader is cautioned not to place undue reliance on forward-looking information.

3 June 2010

Forward Looking InformationLalor Project

HudBay's production decision with respect to Lalor was not based on the results of a pre-feasibility study or feasibility study of mineral resources demonstrating economic or technical viability, because significant portions of the deposit are not able to be classified as a mineral reserve until they can be accessed from underground for additional drilling. Because of this, the production decision was based on mineral resources identified to date and estimates of potential grades and quantities of the gold zone and copper-gold zone, along with other available information, including cost estimates and portions of the engineering design, which have been completed to a level suitable for inclusion in a feasibility study.

The preliminary assessment respecting HudBay’s Lalor project is preliminary in nature, includes inferred mineral resources and potential grades and quantities of minerals that are considered too speculative geologically to have the economic considerations applied that would enable them to be classified as mineral reserves and there is no certainty that the preliminary assessment will be realized. Among the risks associated with the decision to commence production at Lalor is the possibility that the gold zone will not be economically or technically viable, construction timetables, cost estimates and production forecasts may not be realized.

Qualified Person

The Lalor mineral resource and conceptual estimates were prepared by Brian Hartman, M.Sc. P.Geo., HBMS geologist under the direct supervision of Robert Carter, B.Sc. P. Eng., HBMS superintendent, mines and technical services. Mr. Carter is a qualified person within the meaning of NI 43-101, and has reviewed and approved the scientific and technical information referred to in this presentation.

4 June 2010

Investment Highlights

• Operational Excellence

• Cash costs of negative US$0.49 per pound of zinc sold in Q2 2010

• 1,400 employees with an average of 23 years of service

• ISO14001 and OHSAS 18001 certified for environment, health and safety

• 155 million tonnes from 26 mines discovered over 80 years in Northern Manitoba

• Financial Strength

• Nearly $1 billion in cash and no debt

• Lalor and regional growth opportunities fully financed

5 June 2010

Investment Highlights• Growth Potential

• Lalor go ahead expected to nearly double annual gold production

• Emerging "mid-tier level" gold production and undervalued resources

• Reed Lake and other prospects provide potential growth in Northern Manitoba

• One of the largest exploration budgets in Company's history of $42 million in 2010

• Management Strengthened to Pursue New Opportunities

• SVP Corporate Development hired

• Chief Operating Officer and SVP Business Development appointed

• NYSE Listing and Inaugural Dividend

• Diversifying shareholder base to improve valuation

• Dividend reinforces capital allocation discipline

6 Second Quarter 2010 Results

Strong Financial ResultsStrong Financial Results

2010 2009 2010 2009

Three months endedJune 30

Six months endedJune 30

Revenue

Net earnings

EBITDA1,2

Operating Cash Flow1,3

Earnings per share

($000s except per share amounts)

1EBITDA and operating cash flow before changes in non-cash working capital are considered non-GAAP measures. See "Non-GAAP Performance Measures" in our Management's Discussion and Analysis for the quarter ending June 30, 2010.

2EBITDA represents earnings before interest expense, taxes, depreciation and amortization, gain/loss on derivative instruments, exploration and interest and other income.3Before changes in non-cash working capital.

191,851

13,273

69,707

41,027

0.09

197,657

89,415

28,598

28,865

0.58

432,171

36,832

153,151

100,098

0.24

359,441

85,457

44,091

42,837

0.56


Operating Highlights - Production

Zinc tonnes

Copper tonnes

Gold troy oz.

Silver troy oz.

Cash Costs per pound of zinc sold2

2010 2009 2010 2009

Three months endedJune 30

Six months endedJune 30

Production (contained metal in concentrate)1

24,961

12,123

21,002

235,106

US($0.49)

16,867

11,036

22,610

210,236

US($0.05)

40,103

23,840

41,012

428,091

US($0.37)

36,757

23,895

43,968

457,652

US$0.14

1Metal reported in concentrate is prior to refining loses or deductions associated with smelter terms2Cash cost per pound of zinc sold is considered a non-GAAP measures. See "Non-GAAP Performance Measures" in our Management's Discussion and Analysis for the quarter ending June 30, 2010.

2010 Guidance

75-90,000

45-55,000

85-100,000

800-900,000


Strong Financial Position

148.9 millionShares Outstanding

0Long Term Debt

At June 30, 2010

Cash Position $911.8 million

Working Capital $923.6 million

Annualized Dividend Yield 1.80%

SELF-FUNDING FOR THE LALOR PROJECTAND FLEXIBILITY TO PURSUE OTHER GROWTH OPPORTUNITIES


Steady Q2 Results as Expected

• Production remains on track for all metals to meet 2010 guidance

• Very strong zinc and other contained metal production in Q2 2010

• Strong grades reflect areas mined

• Zinc plant constraints and rail car shortages in Q2 2010 expected to

be made up for in balance of 2010

• Excellent cost control

• Successful closure of copper smelter


North and Central America Locations

Snow Lake Chisel North MineConcentratorLalor Project

Flin Flon777 & Trout Lake MinesConcentratorZinc Plant Toronto

Head OfficeZinc Oxide Plant

MichiganBack Forty Deposit

GuatemalaFenix Project


Amisk

Lake

Amisk

Lake

Reed

Lake

Reed

Lake

NN

25 km25 km

Flin FlonFlin Flon

Snow LakeSnow Lake

Flin Flon Greenstone BeltFlin Flon Greenstone Belt

Hwy #39Hwy #39

Hwy #10Hwy #10

777 Mine777 Mine

Trout Lake MineTrout Lake Mine

Chisel North MineFlin FlonOre Concentrator

Zinc plant

Snow Lake Ore Concentrator

Lalor Deposit

Lalor Deposit

Reed Lake Deposit

Reed Lake Deposit

Cold Lake/Lost Lake Deposits



Manitoba Mines

777: Flagship Mine

• 2020

• $33.42

• 9,400 tonnes

• 16,300 tonnes

• 20,000 ounces

1 Contained metal in concentrate

Life of mine

Q2 mining Cost/tonne ore

Q2 Production1:

• Copper

• Zinc

• Gold equivalent

Trout Lake

• 2012

• $61.70

• 2,900 tonnes

• 3,800 tonnes

• 4,900 ounces

Chisel North

• 2012

• $56.51

• -

• 4,800 tonnes

• -


Full Commitment to Lalor Development (100% Owned)

• Accelerated $560 million construction program with first

production in second quarter of 2012

• Growth of over 50% in expected annual zinc production

• Expected to nearly double annual gold production

• Exploration upside at Lalor remains significant

• Aggressive exploration program is ongoing


3D View of Potential Au, Cu-Au, and Zn Rich Mineral Resource Zones

Looking 310°AzimuthOne drill completing hole testing down

plunge extension of Zone 10

Zone 10Wireframe Base

Metal Zones

10

11

20

30

31

40

Wireframe Gold

Zones

21

24

25

26

27

metres

0 100 200

Wireframe Base

Metal Zones

10

11

20

30

31

40

Wireframe Gold

Zones

21

24

25

26

27

Wireframe Base

Metal Zones

10

11

20

30

31

40

Wireframe Gold

Zones

21

24

25

26

27

Wireframe Base

Metal Zones

10

11

20

30

31

40

Wireframe Gold

Zones

21

24

25

26

27

Wireframe Gold

Zones

21

24

25

26

27

metres

0 100 200

metres

0 100 200


Ramp

Development

20102010 20112011 2012201220092009 20132013 20142014 20152015

Q3Q3 Q4Q4Q2Q2Q3Q3 Q1Q1Q4Q4 Q3Q3 Q4Q4Q2Q2Q1Q1 Q3Q3 Q4Q4Q2Q2Q1Q1 Q3Q3 Q4Q4Q2Q2Q1Q1 Q3Q3 Q4Q4Q2Q2Q1Q1 Q3Q3Q2Q2Q1Q1

Lalor Mine Development

Shaft Development

Construction of ramp Initial production via ramp

Shaft construction Fullproduction via shaft


Strong Projected Zinc Growth1

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000

2010 2011 2012 2013 2014 2015 2016

Zin

c P

ayab

le M

ine P

rod

ucti

on

(to

nn

es)

1Includes forecast production from existing mines together with Lalor and the 777 North expansion

50%


Strong Projected Precious Metals Growth2

0

50,000

100,000

150,000

200,000

250,000

2010 2011 2012 2013 2014 2015 2016

Payab

le G

old

Eq

uiv

ale

nt

Pro

du

cti

on

(O

un

ces)

1Includes forecast production from existing mines together with Lalor and the 777 North expansion

2Silver converted to gold equivalent at 60:1 ratio

Includes existing mines, Lalor (including from inferred resources and conceptual gold and

gold-copper zones) and 65% of Back Forty project

Nearly 100%


2009 Gold Equivalent Production

0

50

100

150

200

250

300

350

400

450

500

Min

efin

ders

HudB

ay 2

009

Jagu

ar M

inin

g

Auriz

on M

ines

Ala

mos

Gold

HudB

ay 2

016E

Gam

mon

Gold

Semaf

o

Gol

den S

tar R

esour

ces

Th

ou

sa

nd

Ou

nc

es

1

1Includes forecast production from existing mines together with Lalor (including from inferred

resources and conceptual gold and gold-copper zones) and the 777 North expansion


HudBay Gold Inventory

Reserves

Measured & Indicated Resources

Inferred Resources

Conceptual Estimates

Au (g/t)

14,546,900

21,800,000

12,892,100

6,900,000 –

8,300,000

Tonnes

2.01

1.81

2.92

4.69 –

5.60

Ag (g/t)

27.47

27.14

29.77

21.7 –

25.57

1,153,744

1,331,636

1,368,623

1,120,000 –

1,600,000

Contained Au Equivalent (oz)

- Silver converted to gold equivalent at 60:1 ratio

- Includes existing mines, Lalor and 65% of Back Forty project


Amisk

Lake

Amisk

Lake

Reed

Lake

Reed

Lake

NN

25 km25 km

Flin FlonFlin Flon

Snow LakeSnow Lake

Flin Flon Greenstone BeltFlin Flon Greenstone Belt

Hwy #39Hwy #39

Hwy #10Hwy #10

777 Mine777 Mine

Trout Lake MineTrout Lake Mine

Chisel North MineFlin FlonOre Concentrator

Zinc plant

Snow Lake Ore Concentrator

LalorDeposit

LalorDeposit

Reed Lake Deposit

Reed Lake Deposit




Leveraging Opportunities in the Greenstone Belt

• Initiating development of 777 North (100% owned)

• $20 million approved by Board

• Drilling at Reed Lake to advance to development stage

• Ongoing exploration on Halo’s Lost and Cold Properties

OPTIMIZING NORTHERN MANITOBA


• Acquired right to earn a 65% interest in Aquila Resources' Back Forty Project in Aug. 2009

• Advanced exploration-stage VMS zinc-gold deposit in Michigan

• 8.5 million tonnes measured and indicated NI 43-101 resource

• Strategic fit and can provide concentrate to Flin Flon operations

The Back Forty Project – Overview

Back Forty Deposit(NW of Stephenson, MI)Back Forty Deposit(NW of Stephenson, MI)


Progress at The Back Forty Project (65% owned)

• Updated NI 43-101 mineral resource estimate expected

by year end 2010

• Mine permit application to State of Michigan expected

in Q4 2011

• New exploration program in project area

• Outlining the potential expansion of the known resource at depth

• Testing the on-strike potential of the resource

• Testing new targets generated from airborne and ground geophysical

surveys

CURRENT EXCELLENT DRILLING

EXPECTED TO LEAD TO UPGRADED RESOURCE


Growing Internationally: The Fenix Nickel Deposit

• Brownfield mine and pyrometallurgical facility

• Proven process technology operated for three years

• 36.2 million tonnes of saprolite resources at 1.92% Ni, up 18% from previous estimate

• ~50 million pounds of potential nickel production per year

• Multi-decade mine life with upside potential

FenixFenix


Advancing the Fenix Project

• Low technical risk, good logistics, potential for very long mine life

• Seeking to mitigate social, financial and political risks

• Pursue strategic partner and JV opportunities

• Seek limited recourse project financing

• Update feasibility study by year end 2010 results

• Drilled 7,000 meters to date; approved exploration program to drill

additional 5,000 meters


Focused Acquisition Strategy

• Expanded management capacity to consider development

stage opportunities

• Focus on the Americas but will consider other mining

favourable jurisdictions

• Seeking VMS or porphyry deposits

• Target transaction size of between 10 – 20% of market cap

• Strategic partnerships to leverage grassroots exploration

27 Second Quarter 2010 ResultsTargeting 115,000 meters of drill core in 2010

Flin Flon Greenstone Belt

• Outstanding record of success • Developed 26 mines over past 83 years• Land package totaling > 400,000 hectares

$20 million

Lalor

• Devoted to further exploration$8 million

Mines in Manitoba & outside the Province

• Invested in brownfield exploration• Exploration at existing mines

$14 million


Historical Context

The mineral resource estimate for Lalor is made up of 13.3 million tonnes of indicated resources and 10.2 million tonnes of inferred mineral resources, not including 6.9 – 8.3 million tonnes of conceptual estimates.

Initial resource

Added resource

0 5 10 15 20 25 30

62.5⁄⁄

Tonnes (millions)

Growth of mineral deposits: Discoveries in the Greenstone Belt

MandyNorth StarBirch Lake

FlexarCuprus

Ghost & LostPhoto

RodDickstone

White LakeCoronation

Chisel PitWestarm

CentennialSchist Lae

SpruceKonuto

AndersonOsborne

ChiselCallinan

Chisel U/GStall Lake

Lalor777

Trout LakeFlin Flon


Strengthening our management team

• Key new hires and appointments announced

• Enhancing our ability to go from sourcing to development

to operating our projects

• Experienced work force of more than 1,400

• Excellent track record for safety across operations

• Strong record of environmental compliance

• All operations management systems OHSAS 18001

certified


Near term milestones

• Ongoing exploration at Lalor and various JV properties

• NI 43-101 resource estimate at Reed Lake in early 2011;

production decision to follow

• Fenix feasibility study by year end 2010 results

• New drilling program, updated resource estimate in late

2010 and environmental application submitted at Back

Forty by Q4 2011


Investment Highlights

• Operational Excellence

• Financial Strength

• Growth Potential

• Management Strengthened

• NYSE Listing and Inaugural Dividend

Second Quarter 2010 ResultsAugust 5, 2010

Strength to Build the Future

Documents

Strength to Build the Futures23.q4cdn.com/405985100/files/doc...results of current exploration activities, possible variations in ore grade, dilution or recovery rates, permitting