Hudbay Minerals Inc 6-K, filed Mar 31, 2023
Hudbay Minerals Inc. (HBM)
About this 6-K
Hudbay Minerals Inc filed this 6-K on March 31, 2023.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13A-16 OR 15D-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
For the month of March 2023
Commission File Number: 001-34244
HUDBAY MINERALS INC.
(Translation of registrant’s name into English)
25 York Street, Suite 800
Toronto, Ontario
M5J 2V5, Canada
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F [ ] Form 40-F [X]
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): [ ]
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): [ ]
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes [ ] No [X]
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- _____________________________
EXPLANATORY NOTE
On March 30, 2023, Hudbay Minerals Inc. (“Hudbay”) filed on the Canadian Securities Administrators’ System for Electronic Document Analysis and Retrieval (SEDAR) website at www.sedar.com the following documents: (1) News Release (2) Form 52-109F1 Certification of Annual Filings Full Certificate - CEO, (3) Form 52-109F1 Certification of Annual Filings Full Certificate - CFO, (4) Amendment No. 1 to Canadian Credit Agreement, (5) Amendment No. 2 to Canadian Credit Agreement, (6) Amendment No. 1 to Peru Credit Agreement, (7) Amendment No. 2 to Peru Credit Agreement.
Copies of the filings are attached to this Form 6-K and incorporated herein by reference, as follows:
-
Exhibit 99.1 — News Release dated March 30, 2023
-
Exhibit 99.2 — Form 52-109F1 Certification of Annual Filings Full Certificate - CEO
-
Exhibit 99.3 — Form 52-109F1 Certification of Annual Filings Full Certificate - CFO
-
Exhibit 99.4 — Amendment No. 1 to Canadian Credit Agreement
-
Exhibit 99.5 — Amendment No. 2 to Canadian Credit Agreement
-
Exhibit 99.6 — Amendment No. 1 to Peru Credit Agreement
- Exhibit 99.7 — Amendment No. 2 to Peru Credit Agreement
2
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| HUDBAY MINERALS INC. | ||
| (registrant) | ||
| By: | /s/ Patrick Donnelly | |
| Name: | Patrick Donnelly | |
| Title: | Senior Vice President, Legal and Organizational Effectiveness | |
Date: March 31, 2023
3
EXHIBIT INDEX
The following exhibits are furnished as part of this Form 6-K:
4
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TMX, NYSE - HBM 2023 No. 3 |
| 25 York Street, Suite 800 Toronto, Ontario Canada M5J 2V5 tel 416 362-8181 fax 416 362-7844 hudbay.com |
News Release |
Hudbay Provides Annual Reserve and Resource Update
- Annual copper production from Constancia is expected to average 110,000i tonnes over the next three years, a 23% increase from 2022 levels.
- Annual gold production from Snow Lake is expected to average more than 190,000i ounces over the next three years, a 30% increase from 2022 levels.
- Peru concentrate inventory levels at site have reached normal levels ahead of schedule after full resumption of transportation activities.
- Mining of the higher-grade ore at Pampacancha is now expected in the second quarter of 2023, ahead of schedule.
- Copper mineral resource estimates increase year-over-year with the incorporation of the positive Copper World PEA and initial mineral resource estimate at Llaguen.
- Exploration activities in Peru are focused on ground geophysics and drill permitting for highly prospective satellite properties while evaluating the potential for reserve expansion at Constancia and Pampacancha through future mining phases.
- Exploration activities in Snow Lake are prioritizing step-out drilling for new discoveries to support future growth with preliminary results indicating the alteration zone hosting the mineralized system at Lalor continues down dip for two kilometres.
- De-risking activities at Copper World are focused on completing a pre-feasibility study in mid-2023 and obtaining state level permits.
- Recent geophysical surveys, which identify the potential for high-grade skarn and large porphyry targets on private land claims near Mason, will be used to finalize a drill program to test these targets in late 2023.
Toronto, Ontario, March 30, 2023 - Hudbay Minerals Inc. ("Hudbay" or the "company") (TSX, NYSE: HBM) today released its annual mineral reserve and resource update and issued new three-year production guidance. All amounts are in U.S. dollars, unless otherwise noted.
"Our greenfield exploration efforts successfully increased our copper mineral resources last year with the release of our Copper World PEA and the initial resource estimate at Llaguen," said Peter Kukielski, Hudbay's President and Chief Executive Officer. "Our 2023 exploration program is focused on high-potential opportunities to expand mineralization near our operations in Peru and Manitoba to position us for additional long-term reserves growth. We already have long lives at our existing operations, and we expect to add to our robust production outlook by leveraging our proven track record of delivering value through exploration and development as we advance our quality pipeline of growth assets."
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TMX, NYSE - HBM 2023 No. 3 |
Constancia Operations
Current mineral reserve estimates total 492 million tonnes at 0.30% copper with approximately 1.5 million tonnes of contained copper. Constancia's expected mine life has been maintained and extends until 2038. The copper contained in measured and indicated mineral resources has increased in 2023 due to infill drilling success in converting inferred mineral resources.
Hudbay released an updated mine plan for Constancia in 2021 that reflected an increase in copper and gold production as the higher grades from the Pampacancha deposit were expected to enter the mine plan over the 2022 to 2024 period. The mine plan also incorporated higher-grade reserves from the Constancia Norte pit extension. In late 2022 and early 2023, regional road blockades in Peru limited the ability to transport fuel and concentrate, but the Constancia mill continued to steadily operate as the company implemented risk mitigation plans with strong support from the local communities. As a result of processing stockpiles to lower fuel consumption in early 2023, Pampacancha's mine life has now been extended into the first half of 2025. Annual production at the Constancia operations is expected to average approximately 110,000i tonnes of copper and 87,000i ounces of gold over the next three years, a respective 23% and 49% increase from 2022 levels.
In 2021, Hudbay also completed an internal scoping study which resulted in an inferred mineral resource estimate of 6.5 million tonnes at 1.2% copper in two high grade skarn lenses located below the open pit in the Constancia Norte area. The study concluded these two lenses could be mined by underground methods starting in 2029 to supplement the open pit production.
Current mineral reserves and resources (exclusive of reserves) for Constancia and Pampacancha as of January 1, 2023 are summarized below.
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TMX, NYSE - HBM 2023 No. 3 |
| Constancia Operations Mineral Reserve and Resource Estimates1,2,3,4 |
Tonnes | Cu Grade (%) |
Mo Grade (g/t) |
Au Grade (g/t) |
Ag Grade (g/t) |
| Constancia Reserves | |||||
| Proven | 411,200,000 | 0.28 | 79 | 0.041 | 2.85 |
| Probable | 46,500,000 | 0.23 | 79 | 0.038 | 2.84 |
| Total Proven and Probable - Constancia | 457,700,000 | 0.28 | 79 | 0.040 | 2.85 |
| Pampacancha Reserves | |||||
| Proven | 34,100,000 | 0.59 | 153 | 0.320 | 4.98 |
| Probable | 300,000 | 0.17 | 306 | 0.119 | 2.29 |
| Total Proven and Probable - Pampacancha | 34,400,000 | 0.59 | 155 | 0.319 | 4.96 |
| Total Proven and Probable | 492,100,000 | 0.30 | 85 | 0.060 | 2.99 |
| Constancia Resources | |||||
| Measured | 118,400,000 | 0.20 | 62 | 0.036 | 1.86 |
| Indicated | 140,700,000 | 0.23 | 73 | 0.040 | 2.20 |
| Inferred - Open Pit | 56,700,000 | 0.27 | 82 | 0.044 | 1.86 |
| Inferred - Underground | 6,500,000 | 1.20 | 69 | 0.137 | 8.62 |
| Pampacancha Resources | |||||
| Measured | 9,100,000 | 0.35 | 103 | 0.230 | 6.01 |
| Indicated | 300,000 | 0.16 | 173 | 0.173 | 2.62 |
| Inferred | 900,000 | 0.15 | 118 | 0.103 | 2.86 |
| Total Measured and Indicated | 268,500,000 | 0.22 | 69 | 0.045 | 2.18 |
| Total Inferred | 64,100,000 | 0.36 | 81 | 0.054 | 2.56 |
Note: totals may not add up correctly due to rounding.
1 Mineral resources are exclusive of mineral reserves and do not have demonstrated economic viability.
2 Mineral resources are based on resource pit design and do not include factors for mining recovery or dilution.
3 The open pit mineral reserves and resources are estimated using a minimum NSR cut-off of $6.40 per tonne and assuming metallurgical recoveries (applied by ore type) of 86% for copper on average for the life of mine, while the underground inferred resources at Constancia Norte are based on a 0.65% copper cut-off grade.
4 Long-term metal prices of $3.60 per pound copper, $12.00 per pound molybdenum, $1,650 per ounce gold, and $22.00 per ounce silver were used to estimate mineral reserves and resources.
Constancia and Pampacancha In-Mine Exploration
A drill program is underway at the Pampacancha deposit to test the potential to add an incremental phase to the reserve pit at depth. The company is also planning 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 would convert a portion of the mineral resources to mineral reserves. The results from these drill programs and technical and economic evaluations are expected to be incorporated in the next annual mineral reserve and resource update.
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TMX, NYSE - HBM 2023 No. 3 |
Maria Reyna and Caballito Exploration
Hudbay controls a large, contiguous block of mineral rights with the potential to host mineral deposits within trucking distance of the Constancia processing facility, including the past producing Caballito property and the highly prospective Maria Reyna property. The company commenced early exploration activities and ground geophysical surveys at Maria Reyna and Caballito after completing a surface rights exploration agreement with the community of Uchucarcco in August 2022. 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 May. Ground activities and geophysical surveys are underway and field evidence confirms that both Caballito and Maria Reyna host sulfide and oxide rich copper mineralization in skarns, hydrothermal breccias and large porphyry intrusive bodies.
Peru Logistics and Mining Activities Normalized
Social unrest and road blockades in Peru, following a change in the country's political leadership in December 2022, have continued to abate since mid-February 2023. Transportation of Constancia's concentrate and critical supplies has now returned to normal. As a result, Hudbay has significantly decreased the level of concentrate inventories at site to less than 7,000 wet metric tonnes as of the end of March from a peak of 47,000 wet metric tonnes in mid-February. Hudbay has been able to complete several port shipments in March and expects to reach normal concentrate inventory levels at the port in April, ahead of schedule.
In addition, full mining activities resumed in the Pampacancha pit in February and the period of higher stripping from March to June is progressing well with mining of higher-grade ore now expected in the second quarter of 2023, slightly ahead of schedule.
Snow Lake Operations
Current mineral reserve estimates in Snow Lake total 18 million tonnes with approximately 2.1 million ounces in contained gold, and the expected mine life of the Snow Lake operations has been maintained and extends until 2038. With the Snow Lake operations achieving higher production levels after the full ramp-up of the New Britannia mill in 2022 and the transition of the Flin Flon workforce and equipment to the Lalor mine, exploration activities are now prioritizing step-out drilling to identify opportunities for meaningful additions to the mineral resource base to support future growth.
Exploration efforts in 2022 focused on increasing inferred gold resources at the 1901 deposit, which offset converted inferred mineral resources at Lalor. As a result, total gold contained in inferred resources was unchanged at 1.7 million ounces. This indicates a potential to maintain strong production levels beyond 2030 and further extend the mine life in Snow Lake.
Hudbay has been executing a multi-phased gold strategy in Snow Lake since 2019, which has resulted in increased annual gold production from optimization initiatives, including higher processing capacity and gold recoveries since the start-up of the New Britannia mill in late 2021. As a result, annual gold production from Snow Lake increased to 146,233 ounces in 2022, New Britannia's first full year of production, representing a 110% increase from 69,657 ounces in 2020. The New Britannia mill consistently achieved its nameplate capacity of 1,500 tonnes per day throughout 2022 and is expected to operate at 1,650 tonnes per day in 2023 with the opportunity to further exceed targeted levels in the future. Annual gold production from Snow Lake is expected to average more than 190,000i ounces over the next three years, which represents a further increase of 30% from 2022 levels.
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TMX, NYSE - HBM 2023 No. 3 |
There are several opportunities to enhance the Snow Lake operations through exploration upside and mill processing projects. The Stall mill recovery improvement program is currently well-advanced and is expected to result in higher gold and copper recoveries starting in the second quarter of 2023. Hudbay has also completed an internal pre-feasibility study on a second phase of the Stall mill recovery improvement program which demonstrates the potential for a further increase in gold recoveries at Stall starting in 2025 by producing a lead concentrate through gravity separation.
The Lalor mine continues to advance several key initiatives to increase efficiency and support higher production levels beyond the current 4,650 tonnes per day, including building long-hole inventory, improving stope muck fragmentation and optimizing the development drift size. The company is also focused on maximizing production from the shaft to enable more ore to be hoisted to surface while reducing inefficient trucking of ore via the ramp, which is expected to lower operating costs and greenhouse gas emissions.
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TMX, NYSE - HBM 2023 No. 3 |
Current mineral reserves and resources (exclusive of reserves) for Lalor, 1901 and other Snow Lake satellite deposits as of January 1, 2023 are summarized below.
|
Lalor Mine and 1901 Deposit |
Tonnes |
Au Grade |
Zn Grade |
Cu Grade |
Ag Grade |
|
Base Metal Zone Reserves |
|
||||
|
Proven - Lalor |
5,977,000 |
2.5 |
5.17 |
0.42 |
28.7 |
|
Proven - 1901 |
1,278,000 |
2.2 |
8.14 |
0.30 |
27.4 |
|
Probable - Lalor |
522,000 |
2.6 |
4.59 |
0.36 |
30.3 |
|
Probable - 1901 |
245,000 |
0.8 |
10.7 |
0.30 |
25.2 |
|
Total Proven and Probable - Base Metal |
8,022,000 |
2.5 |
5.77 |
0.39 |
28.5 |
|
Gold Zone Reserves |
|
||||
|
Proven - Lalor |
3,345,000 |
5.1 |
0.77 |
0.54 |
29.2 |
|
Proven - 1901 |
101,000 |
2.9 |
1.32 |
1.00 |
19.2 |
|
Probable - Lalor |
3,779,000 |
5.5 |
0.41 |
1.12 |
25.6 |
|
Probable - 1901 |
54,000 |
1.7 |
0.45 |
1.82 |
5.6 |
|
Total Proven and Probable - Gold |
7,279,000 |
5.3 |
0.59 |
0.86 |
27.0 |
|
Total Proven and Probable (Base Metal and Gold) |
15,303,000 |
3.8 |
3.31 |
0.61 |
27.8 |
|
Base Metal Zone Resources |
|
||||
|
Inferred - Lalor |
1,947,000 |
1.7 |
5.56 |
0.34 |
32.0 |
|
Inferred - 1901 |
312,000 |
1.5 |
5.86 |
0.19 |
32.0 |
|
Total Inferred - Base Metal |
2,259,000 |
1.7 |
5.60 |
0.32 |
32.0 |
|
Gold Zone Resources |
|
||||
|
Inferred - Lalor |
3,764,000 |
5.0 |
0.27 |
1.68 |
26.4 |
|
Inferred - 1901 |
1,599,000 |
5.5 |
0.30 |
0.85 |
16.5 |
|
Total Inferred - Gold |
5,363,000 |
5.1 |
0.28 |
1.43 |
23.5 |
|
Total Inferred (Base Metal and Gold) |
7,622,000 |
4.1 |
1.86 |
1.10 |
26.0 |
Note: totals may not add up correctly due to rounding.
1 Mineral resources are exclusive of mineral reserves and do not have demonstrated economic viability.
2 Mineral resources do not include factors for mining recovery or dilution.
3 Base metal mineral resources are estimated based on the assumption that they would be processed at the Stall concentrator while gold mineral resources are estimated based on the assumption that they would be processed at the New Britannia concentrator.
4 Long-term metal prices of $1.20 per pound zinc, $1,650 per ounce gold, $3.60 per pound copper, and $22.00 per ounce silver with an exchange rate of 1.33 C$/US$ were used to estimate mineral reserves and resources.
5 Lalor mineral reserves and resources are estimated using NSR cut-off ranging from C$137 to C$168 per tonne assuming a long hole mining method and depending on the mill destination.
6 Individual stope gold grades at Lalor were capped at 10 grams per tonne as a prudent estimate until reserves-to-mill reconciliations can be developed to support the recovery of higher-grade gold. This capping method resulted in an approximate 3% reduction in the overall gold reserve grade at Lalor.
7 1901 mineral reserves and resources are estimated using a minimum NSR cut-off of C$166 per tonne assuming the material is mined via post pillar cut-and-fill methods and is processed at the Stall mill.
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TMX, NYSE - HBM 2023 No. 3 |
|
Snow Lake Regional Deposits - Gold |
Tonnes |
Au Grade |
Zn Grade |
Cu Grade |
Ag Grade |
|
Probable Reserves |
|
||||
|
WIM |
2,450,000 |
1.6 |
0.25 |
1.63 |
6.3 |
|
3 Zone |
660,000 |
4.2 |
- |
- |
- |
|
Total Probable (Gold) |
3,110,000 |
2.2 |
0.20 |
1.28 |
5.0 |
|
Inferred Resources |
|
||||
|
New Britannia |
2,750,000 |
4.5 |
- |
- |
- |
|
Birch |
570,000 |
4.4 |
- |
- |
- |
|
Total Inferred (Gold) |
3,320,000 |
4.5 |
- |
- |
- |
Note: totals may not add up correctly due to rounding.
1 Mineral resources are exclusive of mineral reserves and do not have demonstrated economic viability.
2 Mineral resources do not include factors for mining recovery or dilution.
3 Gold mineral resources are estimated based on the assumption that they would be processed at the New Britannia concentrator.
4 Long-term metal prices of $1.15 per pound zinc, $1,500 per ounce gold, $3.45 per pound copper, and $20.00 per ounce silver with an exchange rate of 1.30 C$/US$ were used to confirm the economic viability of the mineral reserve estimates.
5 WIM mineral reserves are estimated using a minimum NSR cut-off of C$150 per tonne, assuming processing recoveries of 98% for copper, 88% for gold and 70% for silver based on processing through New Britannia mill's flotation and tails leach circuits.
6 3 Zone mineral reserves are estimated using a minimum NSR cut-off of C$150 per tonne, assuming processing recoveries of 85% for gold based on processing through New Britannia mill's leach circuit.
7 New Britannia mineral resource estimates have been reported at a minimum true width of 1.5 metres and with a cut-off grade varying from 2 grams per tonne (at the lower part of New Britannia) to 3.5 grams per tonne (at the upper part of New Britannia).
8 Mineral reserves and resources were initially estimated using metal price assumptions that vary marginally over the assumptions used to estimate mineral reserves at Lalor. In the Qualified Person's opinion, the combined impact of these small variations does not have any impact on the mineral reserve and resource estimates.
|
Snow Lake Regional Deposits - Base Metal |
Tonnes |
Au Grade |
Zn Grade |
Cu Grade |
Ag Grade |
|
Indicated Resources |
|
||||
|
Pen II |
470,000 |
0.3 |
8.89 |
0.49 |
6.8 |
|
Talbot |
2,190,000 |
2.1 |
1.79 |
2.33 |
36.0 |
|
Total Indicated (Base Metals) |
2,660,000 |
1.8 |
3.04 |
2.01 |
30.9 |
|
Inferred Resources |
|
||||
|
Watts |
3,150,000 |
1.0 |
2.58 |
2.34 |
31.0 |
|
Pen II |
130,000 |
0.3 |
9.81 |
0.37 |
6.8 |
|
Talbot |
2,450,000 |
1.9 |
1.74 |
1.13 |
25.8 |
|
Total Inferred (Base Metals) |
5,730,000 |
1.3 |
2.39 |
1.78 |
28.3 |
Note: totals may not add up correctly due to rounding.
1 Mineral resources are exclusive of mineral reserves and do not have demonstrated economic viability.
2 Mineral resources do not include factors for mining recovery or dilution.
3 Base metal mineral resources are estimated based on the assumption that they would be processed at the Stall concentrator.
4 Watts mineral resources are estimated using a minimum NSR cut-off of C$150 per tonne, assuming processing recoveries of 90% for copper, 80% for zinc, 70% for gold and 70% for silver.
5 Pen II mineral resources are estimated using a minimum NSR cut-off of C$75 per tonne.
6 Watts and Pen II mineral resources were initially estimated using metal price assumptions that vary marginally over the assumptions used to estimate mineral resources at Lalor. In the Qualified Person's opinion, the combined impact of these small variations does not have any impact on the mineral resource estimates.
7 Includes 100% of the Talbot mineral resources reported by Rockcliff Metals Corp. in its 2020 NI 43-101 technical report published on SEDAR. Hudbay currently owns a 51% interest in the Talbot project.
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TMX, NYSE - HBM 2023 No. 3 |
Lalor Near-Mine Exploration
Hudbay commenced a winter drill program in January 2023 with four drill rigs testing the down-dip gold and copper extensions of the Lalor deposit, in the first step-out drilling in the deeper zones at Lalor since the initial discovery of the gold and copper-gold zones in 2009 and 2010. A total of eight widely spaced drill holes have been planned to test the down dip extension of Lalor over a two kilometre by one kilometre area during the 2023 winter drilling season, as shown in Figure 1. Four of these holes have been completed to-date and all holes have intersected the alteration zone that hosts the Lalor mineralization, with two holes intersecting copper bearing sulfides identified from core logging. These results confirm that the alteration zone hosting the mineralization mined at Lalor continues down dip for two kilometres from its existing known extent. Once the 2023 drilling program is completed, all holes will be assayed and probed to guide the next campaign of exploration.
One additional drill rig is testing a geophysical anomaly located within 400 metres of existing Lalor underground infrastructure. Four drill holes have been completed during the winter drill program and assay results from base metal and copper-gold mineralized intercepts identified from core logging are pending.
3-Year Production Outlook
The consolidated copper and gold production guidance demonstrates the continued growth from the company's brownfield investments in Peru and Manitoba. Consolidated copper production over the next three years is expected to increase to 114,000i tonnes, 130,500i tonnes and 116,000i tonnes, respectively, which represents an increase of 9%, 25% and 11%, respectively, from 2022 levels. Consolidated gold production over the next three years is expected to increase to 285,500i ounces, 296,500i ounces and 258,500i ounces, respectively, which represents an increase of 30%, 35% and 18%, respectively, from 2022 levels.
Peru's three-year production guidance reflects higher copper and gold grades from Pampacancha into the first half of 2025. The mine plan has been re-sequenced to reflect the impacts in early 2023, as noted previously, resulting in higher copper and gold production from Pampacancha continuing into 2025. This is expected to lead to an 18%i and 109%i increase in copper and gold production, respectively, in 2025 compared to the mine plan issued in 2021.
Manitoba's three-year production guidance reflects higher throughput at the Lalor mine and the New Britannia mill starting in 2023, as well as positive impacts from the first phase of the Stall mill recovery improvement program beginning in the second quarter of 2023. Gold production in 2025 also reflects preliminary expected impacts from the second phase of the Stall mill recovery improvement program.
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TMX, NYSE - HBM 2023 No. 3 |
|
3-Year Production Outlook Contained Metal in Concentrate and Doré1 |
2023 Guidance |
2024 Guidance |
2025 Guidance |
|
|
Peru |
|
|
|
|
|
Copper |
tonnes |
91,000 - 116,000 |
107,000 - 132,000 |
94,000 - 120,000 |
|
Gold |
ounces |
83,000 - 108,000 |
96,000 - 117,000 |
53,000 - 64,000 |
|
Silver |
ounces |
2,210,000 - 2,650,000 |
2,600,000 - 3,100,000 |
2,400,000 - 3,000,000 |
|
Molybdenum |
tonnes |
1,300 - 1,600 |
1,600 - 1,900 |
1,400 - 1,700 |
|
|
|
|
|
|
|
Manitoba |
|
|
|
|
|
Gold |
ounces |
175,000 - 205,000 |
175,000 - 205,000 |
175,000 - 225,000 |
|
Zinc |
tonnes |
28,000 - 36,000 |
35,000 - 43,000 |
35,000 - 45,000 |
|
Copper |
tonnes |
9,000 - 12,000 |
9,000 - 13,000 |
7,000 - 11,000 |
|
Silver |
ounces |
750,000 - 1,000,000 |
800,000 - 1,000,000 |
900,000 - 1,200,000 |
|
|
|
|
|
|
|
Total |
|
|
|
|
|
Copper |
tonnes |
100,000 - 128,000 |
116,000 - 145,000 |
101,000 - 131,000 |
|
Gold |
ounces |
258,000 - 313,000 |
271,000 - 322,000 |
228,000 - 289,000 |
|
Zinc |
tonnes |
28,000 - 36,000 |
35,000 - 43,000 |
35,000 - 45,000 |
|
Silver |
ounces |
2,960,000 - 3,650,000 |
3,400,000 - 4,100,000 |
3,300,000 - 4,200,000 |
|
Molybdenum |
tonnes |
1,300 - 1,600 |
1,600 - 1,900 |
1,400 - 1,700 |
1 Metal reported in concentrate and doré is prior to smelting and refining losses or deductions associated with smelter terms.
Copper World Project
The 100% owned Copper World project is located in Pima County, Arizona, approximately 50 kilometres southeast of Tucson. The Copper World project includes seven deposits discovered in 2021, together with the East deposit (formerly known as the Rosemont deposit). The new deposits were defined after the completion of an expanded drill program following a successful initial drill program in 2020. A new resource model was completed for the Preliminary Economic Assessment ("PEA") of Copper World in 2022, which included a revised resource model for the East deposit that applied resource classification criteria calibrated on historical performance at Constancia and controlled grade over-smoothing and incorporated the newly discovered deposits. This resulted in a 17% increase in contained copper in measured and indicated resources and a 328% increase in contained copper in inferred resources, as compared to the mineral resources in the 2017 feasibility study for the East deposit.
The Copper World PEA contemplates a two-phased mine plan with the first phase reflecting a standalone operation with processing infrastructure on Hudbay's private land and mining occurring on patented mining claims. Phase I is expected to require only state and local permits and reflects a 16-year mine life. Phase II extends the mine life to 44 years through an expansion onto federal land to mine the entire deposits. Phase II also contemplates an expansion of the processing facilities and would be subject to the federal permitting process.
At a copper price of $3.50 per pound, the after-tax net present value of Phase I using a 10% discount rate is $741 million with an internal rate of return of 17%. With the inclusion of Phase II, the after-tax net present value of the total project using a 10% discount rate increases to $1,296 million and an internal rate of return of 18%. The valuation metrics are highly sensitive to the copper price and at a price of $4.00 per pound, the after-tax net present value of Phase I and the total project, using a 10% discount rate, increases to $1,193 million and $1,903 million, respectively, and the internal rate of return in Phase I and the total project increases to 21% and 22%, respectively. For information regarding the limitations of a PEA, please refer to the Qualified Person and NI 43-101 statement at the end of this news release.
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TMX, NYSE - HBM 2023 No. 3 |
Current mineral resource estimates for the Copper World project as of January 1, 2023 are summarized below.
|
Copper World Project |
Tonnes |
Cu Grade |
CuSS |
Mo Grade |
Ag Grade |
|
Flotation Material |
|
||||
|
Measured |
687,000,000 |
0.45 |
0.05 |
138 |
5.1 |
|
Indicated |
287,000,000 |
0.36 |
0.06 |
134 |
3.6 |
|
Inferred |
210,000,000 |
0.36 |
0.05 |
119 |
3.9 |
|
Leach Material |
|
||||
|
Measured |
105,000,000 |
0.37 |
0.26 |
- |
- |
|
Indicated |
94,000,000 |
0.35 |
0.26 |
- |
- |
|
Inferred |
52,000,000 |
0.40 |
0.29 |
- |
- |
|
Total Resources |
|
||||
|
Measured and Indicated |
1,173,000,000 |
0.41 |
0.09 |
114 |
3.9 |
|
Inferred |
262,000,000 |
0.37 |
0.10 |
95 |
3.1 |
Note: totals may not add up correctly due to rounding.
1 CIM definitions were followed for the estimation of mineral resources. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
2 Mineral resources are constrained within a computer-generated pit using the Lerchs-Grossman algorithm.
3 Estimate of the mineral resource is based on the following metals prices: $3.45 per pound of copper; $11.00 per pound of molybdenum; and $20.00 per ounce of silver.
4 Mineral resource estimates were reported using a 0.1% copper cut-off grade and an oxidation ratio lower than 50% for flotation material and a 0.1% soluble copper cut-off grade and an oxidation ratio higher than 50% for leach material.
5 Estimate of the mineral resource does not account for marginal amounts of historical small-scale operations in the area that occurred between 1870 and 1970 and is estimated to have extracted approximately 200,000 tonnes, which is within rounding approximations of the current resource estimates.
Focused on De-risking Activities at Copper World
Following the release of the Copper World PEA, Hudbay has continued to execute its strategy to de-risk the project. Pre-feasibility activities for the private land Phase I of the Copper World project are well-advanced and are expected to support the conversion of mineral resources to mineral reserves and optimize the layout and sequencing of the mineral processing facilities, in addition to evaluating other upside opportunities. Pre-feasibility level engineering of the main processing facility, together with geotechnical and hydrogeological site investigation activities, were completed by the end of 2022. In late 2022, Hudbay submitted the applications for an Aquifer Protection Permit and an Air Quality Permit to the Arizona Department of Environmental Quality. Hudbay continues to expect to receive these two remaining state permits in 2023. The other key state permit, the Mined Land Reclamation Plan, was received in 2022. A pre-feasibility study for Phase I of the Copper World project is expected to be released in mid-2023.
Upon receipt of the state level permits, the company expects to conduct a bulk sampling program at Copper World to continue to de-risk the project by testing grade continuity, variable cut-off effectiveness and metallurgical strategies. Hudbay also intends to initiate a minority joint venture partner process following receipt of permits, which will allow the potential joint venture partner to participate in the design and funding of definitive feasibility study activities in 2024.
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TMX, NYSE - HBM 2023 No. 3 |
Mason Project
The Mason project is a large greenfield copper deposit located in the historic Yerington District of Nevada and is one of the largest undeveloped copper porphyry deposits in North America. The Mason project's measured and indicated mineral resources are comparable in size to Constancia. Hudbay views the Mason project as a long-term future development asset as part of the company's pipeline of high-quality copper growth opportunities. Since acquiring Mason, Hudbay has consolidated a prospective package of patented and unpatented mining claims contiguous to the Mason project and has advanced a number of technical studies, including a revised resource model and the completion of a PEA on Mason.
The Mason PEA was completed in April 2021 and contemplates a 27-year mine life with average annual copper production of approximately 140,000 tonnes over the first ten years of full production. At a copper price of $3.50 per pound, the after-tax net present value using a 10% discount rate is $1,191 million and the internal rate of return is 18%. For information regarding the limitations of a PEA, please refer to the Qualified Person and NI 43-101 statement at the end of this news release.
There is opportunity to further enhance the project economics through exploration for higher grade satellite deposits on Hudbay's prospective land package in Nevada, including Mason Valley. The Mason Valley property hosts several historical underground copper mines that were in production in the early 1900s. Much of the Mason Valley property is located on Hudbay's wholly owned private lands within 15 kilometres of the planned processing infrastructure for the Mason project and contains highly prospective skarn mineralization. A conductivity-resistivity IP ground survey conducted in the fourth quarter of 2022 was successful in identifying the mineralization associated with the historical mines and confirmed the potential for both high-grade skarn targets as well as a large porphyry target below the historical mines. These results, in combination with a re-interpretation of geological data from past operating mines and previous exploration data, will be used to finalize a drill plan to test these targets in late 2023.
Current mineral resource estimates for Mason as of January 1, 2023 are summarized below.
|
Mason Project |
Tonnes |
Cu Grade |
Mo Grade |
Au Grade |
Ag Grade |
|
Measured |
1,417,000,000 |
0.29 |
59 |
0.031 |
0.66 |
|
Indicated |
801,000,000 |
0.30 |
80 |
0.025 |
0.57 |
|
Total Measured and Indicated |
2,219,000,000 |
0.29 |
67 |
0.029 |
0.63 |
|
Inferred |
237,000,000 |
0.24 |
78 |
0.033 |
0.73 |
Note: totals may not add up correctly due to rounding.
1 Mineral resource estimates that are not mineral reserves do not have demonstrated economic viability.
2 Mineral resource estimates do not include factors for mining recovery or dilution.
3 Metal prices of $3.10 per pound copper, $11.00 per pound molybdenum, $1,500 per ounce gold, and $18.00 per ounce silver were used to estimate mineral resources.
4 Mineral resources are estimated using a minimum NSR cut-off of $6.25 per tonne.
5 Mineral resources are based on resource pit designs containing measured, indicated, and inferred mineral resources.
Llaguen Project
The Llaguen project is a copper-molybdenum porphyry deposit located near the city of Trujillo, the third largest city in Peru. Llaguen is at moderate altitude and in close proximity to existing infrastructure, including water supply, the Trujillo Nueva electric power substation (located 40 kilometres away) and the port of Salaverry (located 62 kilometres away). Hudbay completed a 28-hole confirmatory drill program in 2021 and 2022 which confirmed and extended the footprint of the known mineralization and highlighted the existence of a high-grade zone in the center of the deposit.
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After completing an initial mineral resource estimate in November 2022, Hudbay initiated preliminary technical studies, including metallurgical test work as well as geotechnical and hydrogeological studies, which are expected to be incorporated into a preliminary economic assessment for the Llaguen project. Additional exploration drilling is warranted on the Llaguen property to test the areas of the deposit that remain open and the several untested geophysical targets in the area to fully define the regional extent of the mineralization. The current mineral resource is also surrounded by a large halo of low grade hypogene copper mineralization, not currently included in the mineral resource estimate, but for which metallurgical test work could assess the potential for economic sulfide heap leaching via commercially available technologies.
Current mineral resource estimates for Llaguen as of January 1, 2023 are summarized below.
|
Llaguen |
Metric Tonnes |
Cu (%) |
Mo (g/t) |
Au (g/t) |
Ag (g/t) |
CuEq |
|
Indicated Global |
271,000,000 |
0.33 |
218 |
0.033 |
2.04 |
0.42 |
|
Including Indicated High-grade |
113,000,000 |
0.49 |
261 |
0.046 |
2.73 |
0.60 |
|
Inferred Global |
83,000,000 |
0.24 |
127 |
0.024 |
1.47 |
0.30 |
|
Including Inferred High-grade |
16,000,000 |
0.45 |
141 |
0.038 |
2.60 |
0.52 |
1 CIM definitions were followed for the estimation of mineral resources. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
2 Mineral resources are reported within an economic envelope defined by a pit shell optimization algorithm. This pit shell is defined by a revenue factor of 0.33 assuming operating costs adjusted from Hudbay's Constancia open pit operation.
3 Long-term metal prices of $3.60 per pound copper, $11.00 per pound molybdenum, $1,650 per ounce gold and $22.00 per ounce silver were used for the estimation of mineral resources.
4 Metal recovery estimates assume that this mineralization would be processed at a combination of facilities, including copper and molybdenum flotation.
5 Copper-equivalent ("CuEq") grade is calculated assuming 85% copper recovery, 80% molybdenum recovery, 60% gold recovery and 60% silver recovery.
6 Specific gravity measurements were estimated by industry standard laboratory measurements.
Qualified Person and NI 43-101
The technical and scientific information in this news release related to the company's material mineral projects has been approved by Olivier Tavchandjian, P. Geo, Senior Vice President, Exploration and Technical Services. Mr. Tavchandjian is a qualified person pursuant to NI 43-101 (as defined below). Additional details on the company's material mineral projects, including a year-over-year reconciliation of reserves and resources, is included in Hudbay's Annual Information Form for the year ended December 31, 2022 (the "AIF"), which is available on SEDAR at www.sedar.com.
The Copper World PEA and the Mason PEA are preliminary in nature, include inferred resources that are considered too speculative to have the economic considerations applied to them that would enable them to be categorized as mineral reserves and there is no certainty the preliminary economic assessments will be realized.
Note to United States Investors
This news release has been prepared in accordance with the requirements of the securities laws in effect in Canada, which differ from the requirements of United States securities laws. Canadian reporting requirements for disclosure of mineral properties are governed by the Canadian Securities Administrators' National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101").
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TMX, NYSE - HBM 2023 No. 3 |
For this reason, information contained in this news release containing descriptions of the company's mineral deposits may not be comparable to similar information made public by United States companies subject to the reporting and disclosure requirements under the United States federal securities laws and the rules and regulations thereunder. For further information on the differences between the disclosure requirements for mineral properties under the United States federal securities laws and NI 43-101, please refer to the company's AIF, a copy of which has been filed under Hudbay's profile on SEDAR at www.sedar.com and the company's Form 40-F, a copy of which will be filed under Hudbay's profile on EDGAR at www.edgar.com.
Forward-Looking Information
This news release contains forward-looking information within the meaning of applicable Canadian and United States securities legislation. All information contained in this news release, other than statements of current and historical fact, is forward-looking information. Often, but not always, forward-looking information can be identified by the use of words such as "plans", "expects", "budget", "guidance", "scheduled", "estimates", "forecasts", "strategy", "target", "intends", "objective", "goal", "understands", "anticipates" and "believes" (and variations of these or similar words) and statements that certain actions, events or results "may", "could", "would", "should", "might" "occur" or "be achieved" or "will be taken" (and variations of these or similar expressions). All of the forward-looking information in this news release is qualified by this cautionary note.
Forward-looking information includes, but is not limited to, statements regarding the company's production, cost and capital and exploration expenditure guidance, expectations regarding the company's exploration program and anticipated results therefrom, expectations regarding the impact of inflationary pressures on the company's cost of operations, financial condition and prospects, expectations regarding the Copper World project, including with respect to the company's plans for a pre-feasibility study and the estimated timelines and pre-requisites for sanctioning the project, expectations regarding the permitting requirements for the Copper World project and permitting related litigation, the company's ability to continue to increase production at Lalor and throughput at the New Britannia mill, the anticipated timing and benefits of completing the Stall recovery improvement program, the anticipated timing for reaching normal concentrate inventory levels at port in Peru, expectations regarding the ability to conduct exploration work on the Maria Reyna and Caballito properties and to advance related drill plans and to submit related drill permit applications, expectations regarding the duration and potential impact of short-term mine plan changes implemented at Constancia, expectations regarding the ability for the company to reduce greenhouse gas emissions, expectations regarding the prospective nature of the Maria Reyna and Caballito properties, the anticipated impact of brownfield growth projects on the company's performance, anticipated expansion opportunities in Snow Lake, anticipated drill programs, anticipated mine plans, anticipated metals prices and the anticipated sensitivity of the company's financial performance to metals prices, events that may affect its operations and development projects, anticipated cash flows from operations and related liquidity requirements, the anticipated effect of external factors on revenue, such as commodity prices, estimation of mineral reserves and resources, mine life projections, reclamation costs, economic outlook, government regulation of mining operations, and business and acquisition strategies. Forward-looking information is not, and cannot be, a guarantee of future results or events. Forward-looking information is based on, among other things, opinions, assumptions, estimates and analyses that, while considered reasonable by the company at the date the forward-looking information is provided, inherently are subject to significant risks, uncertainties, contingencies and other factors that may cause actual results and events to be materially different from those expressed or implied by the forward-looking information.
The material factors or assumptions that Hudbay has identified and were applied in drawing conclusions or making forecasts or projections set out in the forward-looking information include, but are not limited to:
- the ability to achieve production and cost guidance;
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TMX, NYSE - HBM 2023 No. 3 |
- the ability to achieve discretionary spending reductions without impacting operations;
- no significant interruptions to operations due to social or political unrest in the regions Hudbay operates, including the navigation of the complex environment in Peru;
- no interruptions to the company's plans for advancing the Copper World project;
- the ability to ramp up exploration in respect of the Maria Reyna and Caballito properties and to advance related drill plans and to submit related drill permit applications;
- the ability to continue to increase production at Lalor;
- the ability to reach normal concentrate inventory levels at port in Peru;
- the success of mining, processing, exploration and development activities;
- the scheduled maintenance and availability of the company's processing facilities;
- the accuracy of geological, mining and metallurgical estimates;
- anticipated metals prices and the costs of production;
- the supply and demand for metals the company produces;
- the supply and availability of all forms of energy and fuels at reasonable prices;
- no significant unanticipated operational or technical difficulties;
- the execution of the company's business and growth strategies, including the success of its strategic investments and initiatives;
- the availability of additional financing;
- the ability to complete projects on time and on budget and other events that may affect the company's ability to develop its projects;
- the timing and receipt of various regulatory and governmental approvals;
- the availability of personnel for the company's exploration, development and operational projects and ongoing employee relations;
- maintaining good relations with the labour unions that represent certain of the company's employees in Manitoba and Peru;
- maintaining good relations with the communities in which the company operates, including the neighbouring Indigenous communities and local governments;
- no significant unanticipated challenges with stakeholders at the company's various projects;
- no significant unanticipated events or changes relating to regulatory, environmental, health and safety matters;
- no contests over title to the company's properties, including as a result of rights or claimed rights of Indigenous peoples or challenges to the validity of the company's unpatented mining claims;
- the timing and possible outcome of pending litigation and no significant unanticipated litigation;
- certain tax matters, including, but not limited to current tax laws and regulations, changes in taxation policies and the refund of certain value added taxes from the Canadian and Peruvian governments; and
- no significant and continuing adverse changes in general economic conditions or conditions in the financial markets (including commodity prices and foreign exchange rates).
The risks, uncertainties, contingencies and other factors that may cause actual results to differ materially from those expressed or implied by the forward-looking information may include, but are not limited to, political and social risks in the regions Hudbay operates, including the uncertainty with respect to the political and social environment in Peru and its potential impact on the company's mining operations, risks generally associated with the mining industry and the current geopolitical environment, including future commodity prices, currency and interest rate fluctuations, energy and consumable prices, supply chain constraints and general cost escalation in the current inflationary environment, uncertainties related to the development and operation of the company's projects, risks related to the Copper World project, including in relation to permitting, litigation, project delivery and financing risks, risks related to the Lalor mine plan, including the ability to increase the rate of production, dependence on key personnel and employee and union relations, risks related to political or social instability, unrest or change, risks in respect of Indigenous and community relations, rights and title claims, operational risks and hazards, including the cost of maintaining and upgrading the company's tailings management facilities and any unanticipated environmental, industrial and geological events and developments and the inability to insure against all risks, failure of plant, equipment, processes, transportation and other infrastructure to operate as anticipated, compliance with government and environmental regulations, including permitting requirements and anti-bribery legislation, depletion of the company's reserves, volatile financial markets and interest rates that may affect the company's ability to obtain additional financing on acceptable terms, the failure to obtain required approvals or clearances from government authorities on a timely basis, uncertainties related to the geology, continuity, grade and estimates of mineral reserves and resources, and the potential for variations in grade and recovery rates, uncertain costs of reclamation activities, the company's ability to comply with its pension and other post-retirement obligations, the company's ability to abide by the covenants in its debt instruments and other material contracts, tax refunds, hedging transactions, as well as the risks discussed under the heading "Risk Factors" in the company's most recent Annual Information Form and under the heading "Financial Risk Management" in the company's management's discussion and analysis for the year ended December 31, 2022.
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TMX, NYSE - HBM 2023 No. 3 |
Should one or more risk, uncertainty, contingency or other factor materialize or should any factor or assumption prove incorrect, actual results could vary materially from those expressed or implied in the forward-looking information. Accordingly, you should not place undue reliance on forward-looking information. Hudbay does not assume any obligation to update or revise any forward-looking information after the date of this news release or to explain any material difference between subsequent actual events and any forward-looking information, except as required by applicable law.
About Hudbay
Hudbay (TSX, NYSE: HBM) is a diversified mining company with long-life assets in North and South America. The company's Constancia operations in Cusco (Peru) produce copper with gold, silver and molybdenum by-products. Its Snow Lake operations in Manitoba (Canada) produce gold with copper, zinc and silver by-products. Hudbay has an organic pipeline that includes the Copper World project in Arizona and the Mason project in Nevada (United States), and its growth strategy is focused on the exploration, development, operation, and optimization of properties it already controls, as well as other mineral assets it may acquire that fit its strategic criteria. Hudbay's mission is to create sustainable value through the acquisition, development and operation of high-quality, long-life deposits with exploration potential in jurisdictions that support responsible mining, and to see the regions and communities in which the company operates benefit from its presence. Further information about Hudbay can be found on www.hudbay.com.
For investor and media inquiries, please contact:
Candace Brûlé
Vice President, Investor Relations
(416) 814-4387
candace.brule@hudbay.com
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TMX, NYSE - HBM 2023 No. 3 |
Figure 1: Lalor Deep 2023 Winter Drilling
Surface drilling to test the deeper extensions of the Lalor deposit was initiated in January 2023. Widely spaced drill holes are exploring a large footprint of approximately two kilometres by one kilometre down dip of Lalor.
________________________
i Calculated using the mid-point of the guidance range.
FORM 52-109F1
CERTIFICATION OF ANNUAL FILINGS
FULL CERTIFICATE
I, Peter Kukielski, President and Chief Executive Officer of Hudbay Minerals Inc., certify the following:
1. Review: I have reviewed the AIF, if any, annual financial statements and annual MD&A, including, for greater certainty, all documents and information that are incorporated by reference in the AIF (together, the "annual filings") of Hudbay Minerals Inc. (the "issuer") for the financial year ended December 31, 2022.
2. No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the annual filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, for the period covered by the annual filings.
3. Fair presentation: Based on my knowledge, having exercised reasonable diligence, the annual financial statements together with the other financial information included in the annual filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the annual filings.
4. Responsibility: The issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings, for the issuer.
5. Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer's other certifying officer(s) and I have, as at the financial year end
(a) designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that:
(i) material information relating to the issuer is made known to us by others, particularly during the period in which the annual filings are being prepared; and
(ii) information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and
(b) designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer's GAAP.
5.1 Control framework: The control framework the issuer's other certifying officer(s) and I used to design the issuer's ICFR is the Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
5.2 N/A
5.3 N/A
6. Evaluation: The issuer's other certifying officer(s) and I have
(a) evaluated, or caused to be evaluated under our supervision, the effectiveness of the issuer's DC&P at the financial year end and the issuer has disclosed in its annual MD&A our conclusions about the effectiveness of DC&P at the financial year end based on that evaluation; and
(b) evaluated, or caused to be evaluated under our supervision, the effectiveness of the issuer's ICFR at the financial year end and the issuer has disclosed in its annual MD&A
(i) our conclusions about the effectiveness of ICFR at the financial year end based on that evaluation; and
(ii) N/A
7. Reporting changes in ICFR: The issuer has disclosed in its annual MD&A any change in the issuer's ICFR that occurred during the period beginning on October 1, 2022 and ended on December 31, 2022 that has materially affected, or is reasonably likely to materially affect, the issuer's ICFR.
8. Reporting to the issuer's auditors and board of directors or audit committee: The issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of ICFR, to the issuer's auditors, and the board of directors or the audit committee of the board of directors any fraud that involves management or other employees who have a significant role in the issuer's ICFR.
Date: March 30, 2023
(signed) "Peter Kukielski"
Peter Kukielski
President and Chief Executive Officer
FORM 52-109F1
CERTIFICATION OF ANNUAL FILINGS
FULL CERTIFICATE
I, Eugene Lei, Chief Financial Officer of Hudbay Minerals Inc., certify the following:
1. Review: I have reviewed the AIF, if any, annual financial statements and annual MD&A, including, for greater certainty, all documents and information that are incorporated by reference in the AIF (together, the "annual filings") of Hudbay Minerals Inc. (the "issuer") for the financial year ended December 31, 2022.
2. No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the annual filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, for the period covered by the annual filings.
3. Fair presentation: Based on my knowledge, having exercised reasonable diligence, the annual financial statements together with the other financial information included in the annual filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the annual filings.
4. Responsibility: The issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings, for the issuer.
5. Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer's other certifying officer(s) and I have, as at the financial year end
(a) designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that:
(i) material information relating to the issuer is made known to us by others, particularly during the period in which the annual filings are being prepared; and
(ii) information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and
(b) designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer's GAAP.
5.1 Control framework: The control framework the issuer's other certifying officer(s) and I used to design the issuer's ICFR is the Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
5.2 N/A
5.3 N/A
6. Evaluation: The issuer's other certifying officer(s) and I have
(a) evaluated, or caused to be evaluated under our supervision, the effectiveness of the issuer's DC&P at the financial year end and the issuer has disclosed in its annual MD&A our conclusions about the effectiveness of DC&P at the financial year end based on that evaluation; and
(b) evaluated, or caused to be evaluated under our supervision, the effectiveness of the issuer's ICFR at the financial year end and the issuer has disclosed in its annual MD&A
(i) our conclusions about the effectiveness of ICFR at the financial year end based on that evaluation; and
(ii) N/A
7. Reporting changes in ICFR: The issuer has disclosed in its annual MD&A any change in the issuer's ICFR that occurred during the period beginning on October 1, 2022 and ended on December 31, 2022 that has materially affected, or is reasonably likely to materially affect, the issuer's ICFR.
8. Reporting to the issuer's auditors and board of directors or audit committee: The issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of ICFR, to the issuer's auditors, and the board of directors or the audit committee of the board of directors any fraud that involves management or other employees who have a significant role in the issuer's ICFR.
Date: March 30, 2023
(signed) "Eugene Lei"
Eugene Lei
Chief Financial Officer
REDACTED - Execution Version
AMENDING AGREEMENT NO. 1
MEMORANDUM OF AGREEMENT made as of April 13, 2022.
AMONG:
HUDBAY MINERALS INC.,
as Borrower,
- and -
CERTAIN OF ITS SUBSIDIARIES,
as Guarantors, Material Subsidiaries, Restricted Subsidiaries and/or Obligors,
- and -
CANADIAN IMPERIAL BANK OF COMMERCE,
as Administrative Agent,
- and -
THE LENDERS FROM TIME TO TIME PARTY TO THE CREDIT AGREEMENT.
WHEREAS the Borrower, certain of its Subsidiaries, the Agent and certain financial institutions as lenders entered into a fifth amended and restated credit agreement dated as of October 26, 2021 (as further amended, modified, supplemented or replaced to the date hereof, the "Credit Agreement");
AND WHEREAS the parties hereto wish to amend the Credit Agreement;
NOW THEREFORE THIS AGREEMENT WITNESSES that, in consideration of the premises, the covenants herein contained and for other valuable consideration (the receipt and sufficiency of which are hereby acknowledged by each of the parties), the parties hereto agree as follows:
1. Interpretation
(a) All words and expressions defined in the Credit Agreement and not otherwise defined in this Agreement have the meaning specified in the Credit Agreement, as amended by this Agreement (notwithstanding the application of Section 2).
(b) Sections 1.2, 1.3, 1.4 and 13.2 of the Credit Agreement are incorporated herein by reference.
(c) Unless expressly stated otherwise, all references herein to sections of an agreement other than this Agreement shall be to sections of the Credit Agreement.
(d) Section headings are for convenience only.
- 2 -
2. Effective Date
The amendments set forth in Section 3 herein shall be effective on and as of the date the conditions set forth in Section 5 have been satisfied.
3. Amendments to the Credit Agreement
(a) Section 1.1 of the Credit Agreement is amended by deleting the definition of "[REDACTED - COMMERCIALLY SENSITIVE INFORMATION] Receivables Sale Agreement" in its entirety and replacing it with the following:
"[REDACTED - COMMERCIALLY SENSITIVE INFORMATION] Receivables Sale Agreement" means the supplier agreement to be entered into between the Borrower and Citibank N.A. (or one of its affiliates or subsidiaries acceptable to the Agent acting reasonably) (in form and substance acceptable to the Agent, acting reasonably) in respect of certain receivables due from [REDACTED - COMMERCIALLY SENSITIVE INFORMATION] or one of its affiliates or subsidiaries."
(b) Section 1.1 of the Credit Agreement is further amended by deleting paragraph (x) of the definition of "Permitted Liens" in its entirety and replacing it with the following:
"(x) (i) security interests granted by the Borrower to any of Citibank N.A., its branches, affiliates or subsidiaries in connection with the sale by the Borrower pursuant to the [REDACTED - COMMERCIALLY SENSITIVE INFORMATION] Receivables Sale Agreement of accounts receivables owed by [REDACTED - COMMERCIALLY SENSITIVE INFORMATION] to the Borrower provided that the security interest shall only attach to such transferred accounts receivables and (ii) if a court of competent jurisdiction determines that the transactions contemplated by the [REDACTED - COMMERCIALLY SENSITIVE INFORMATION] Receivables Sale Agreement constitute secured loans rather than purchases and sales, security interests granted by the Borrower to any of Citibank N.A., its branches, affiliates or subsidiaries in and to any and all present and future accounts receivable which were expressly the subject such [REDACTED - COMMERCIALLY SENSITIVE INFORMATION] Receivables Sale Agreement provided that the security interest shall only attach to such transferred accounts receivables and shall only secure the repayment of amounts paid by Citibank pursuant to the [REDACTED - COMMERCIALLY SENSITIVE INFORMATION] Receivables Sale Agreement;"
- 3 -
4. Representations & Warranties
Each Obligor represents and warrants to the Agent and the Lenders, acknowledging and confirming that the Agent and the Lenders are relying thereon without independent inquiry, that:
(a) the representations and warranties set forth in the Loan Documents and given by it are true and correct in all material respects on and as of the date hereof (except to the extent such representations and warranties relate to a specific date, in which case such representations and warranties shall have been true and correct in all material respects on and as of such date); and
(b) no Default or Event of Default has occurred and is continuing nor shall any Default or Event of Default result from the execution, delivery or performance of this Agreement.
5. Conditions Precedent
Section 3 of this Agreement shall not be effective until satisfaction or waiver of the following conditions, each to the satisfaction of the Lenders:
(a) this Agreement shall be executed and delivered by the parties hereto;
(b) the representations and warranties set forth in Section 4 of this Agreement shall be true and correct;
(c) no Default or Event of Default shall have occurred and be continuing; and
(d) the Agent shall have received such other documents as the Lenders may reasonably require.
The conditions set forth in this Section 5 are inserted for the sole benefit of the Lenders and may be waived, in whole or in part by the Lenders, with or without terms or conditions.
6. Confirmation of Security, etc.
Each Obligor agrees and confirms that:
(a) each of the Guarantees shall continue in full force and effect;
(b) each of the Security Documents shall continue in full force and effect and shall continue as security for the due and punctual payment and performance of the Obligations and the Other Secured Obligations;
(c) the Liens granted by the Obligors in favour of the Agent and the Lenders pursuant to each of the Security Documents shall continue in full force and effect as general and continuing security for the payment of all Obligations and all Other Secured Obligations, whether incurred prior to, at the time of, or subsequent to the execution of this Amending Agreement; and
(d) each of the Guarantees and Security Documents is enforceable against it by the Agent in accordance with its terms.
- 4 -
7. Miscellaneous
(a) The parties hereto agree that this Agreement shall be a Loan Document.
(b) With the exception of the foregoing amendments, the Credit Agreement shall continue in full force and effect, unamended.
(c) This Agreement and the Credit Agreement shall enure to the benefit of and be binding upon the parties, their successors and any permitted assigns.
(d) This Agreement may be executed in any number of counterparts and all of such counterparts taken together shall be deemed to constitute one and the same instrument.
(e) This Agreement shall be governed by and interpreted and enforced in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein.
(f) The Obligors shall promptly cure any default in its execution and delivery of this Agreement. The Obligors, at the expense of the Borrower, will promptly execute and deliver, or cause to be executed and delivered, to the Agent, upon reasonable request, all such other and further documents, agreements, certificates and instruments in compliance with, or accomplishment of the covenants and agreements of the Obligors hereunder or more fully to state the obligations of the Obligors as set out herein or in the Credit Agreement or to make any recording, file any notice or obtain any consents, all as may be necessary or appropriate in connection therewith.
(g) Time is of the essence of this Agreement.
[Signature pages follow.]
IN WITNESS WHEREOF the parties hereto have executed this Agreement.
| HUDBAY MINERALS INC. | ||
| by | "Jon A. Douglas" | |
| Name: Jon A. Douglas | ||
| Title: Vice President and Treasurer | ||
| by | "Patrick Donnelly" | |
| Name: Patrick Donnelly | ||
| Title: Vice President, General Counsel and Corporate Secretary | ||
| HUDBAY MARKETING & SALES INC. | ||
| by | “Patrick Donnelly” | |
| Name: Patrick Donnelly | ||
| Title: Director, Vice President, General Counsel and Corporate Secretary | ||
| HUDBAY PERU INC. | ||
| by | "Patrick Donnelly" | |
| Name: Patrick Donnelly | ||
| Title: Director and Secretary | ||
| HUDBAY PERU S.A.C. | ||
| by | "Luis Alfonso Santivañez Silva" | |
| Name: Luis Alfonso Santivañez Silva | ||
| Title: General Manager | ||
| HUDBAY (BVI) INC. | ||
| by | "Robert Briant" | |
| Name: Robert Briant | ||
| Title: Director | ||
Signature Page to Amending Agreement No. 1 (Cda)
S-2
|
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6502873 CANADA INC. |
|
|
by |
"Patrick Donnelly" |
|
|
|
Name: Patrick Donnelly |
|
|
|
Title: Director, Vice President, General Counsel and Corporate Secretary |
|
|
|
HUDBAY ARIZONA (BARBADOS) SRL |
|
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by |
"Patrick Donnelly" |
|
|
|
Name: Patrick Donnelly |
|
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|
Title: Director, Vice President and General Counsel |
|
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|
HUDBAY ARIZONA INC. |
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|
by |
"Patrick Donnelly" |
|
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Name: Patrick Donnelly |
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Title: Director, Vice President and General Counsel |
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HUDBAY ARIZONA (US) CORPORATION |
|
|
by |
"Andre Lauzon" |
|
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Name: Andre Lauzon |
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|
Title: President and Chief Operating Officer |
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HUDBAY ARIZONA (US) HOLDING CORPORATION |
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by |
"Andre Lauzon" |
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Name: Andre Lauzon |
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Title: President and Chief Operating Officer |
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COBRE VERDE DEVELOPMENT CORPORATION |
|
|
by |
"Matthew Bingham" |
|
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|
Name: Matthew Bingham |
|
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|
Title: Director and Secretary |
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Signature Page to Amending Agreement No. 1 (Cda)
S-3
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ROSEMONT COPPER COMPANY |
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by |
"Matthew Bingham" |
|
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|
Name: Matthew Bingham |
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Title: Director and Secretary |
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MASON RESOURCES (US) INC. |
|
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by |
"Matthew Bingham" |
|
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Name: Matthew Bingham |
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Title: Director and Secretary |
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11215850 CANADA LIMITED |
|
|
by |
"Patrick Donnelly" |
|
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Name: Patrick Donnelly |
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Title: Director, Vice President and General Counsel |
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SONORAN PROPERTY INVESTORS LLC, by Rosemont Copper Company, its sole Member and Manager |
|
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by |
"Matthew Bingham" |
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|
Name: Matthew Bingham |
|
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Title: Secretary |
|
Signature Page to Amending Agreement No. 1 (Cda)
S-4
Administrative Agent
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CANADIAN IMPERIAL BANK OF COMMERCE, as Agent |
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by |
"Authorized Signatory" |
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Name: Authorized Signatory |
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Title: Authorized Signatory |
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"Authorized Signatory" |
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Name: Authorized Signatory |
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Title: Authorized Signatory |
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The Lenders
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CANADIAN IMPERIAL BANK OF COMMERCE, as Lender |
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by |
"Authorized Signatory" |
|
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Name: Authorized Signatory |
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Title: Authorized Signatory |
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"Authorized Signatory" |
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Name: Authorized Signatory |
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Title: Authorized Signatory |
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THE BANK OF NOVA SCOTIA, as Lender |
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by |
"Authorized Signatory" |
|
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Name: Authorized Signatory |
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|
Title: Authorized Signatory |
|
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|
"Authorized Signatory" |
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Name: Authorized Signatory |
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Title: Authorized Signatory |
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ING CAPITAL LLC, as Lender |
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by |
"Authorized Signatory" |
|
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Name: Authorized Signatory |
|
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|
Title: Authorized Signatory |
|
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|
"Authorized Signatory" |
|
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Name: Authorized Signatory |
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|
Title: Authorized Signatory |
|
Signature Page to Amending Agreement No. 1 (Cda)
S-5
|
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BANK OF MONTREAL, as Lender |
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by |
"Authorized Signatory" |
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Name: Authorized Signatory |
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|
Title: Authorized Signatory |
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ROYAL BANK OF CANADA, as Lender |
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by |
"Authorized Signatory" |
|
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|
Name: Authorized Signatory |
|
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|
Title: Authorized Signatory |
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THE TORONTO-DOMINION BANK, as Lender |
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|
by |
"Authorized Signatory" |
|
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|
Name: Authorized Signatory |
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|
Title: Authorized Signatory |
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"Authorized Signatory" |
|
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Name: Authorized Signatory |
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Title: Authorized Signatory |
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NATIONAL BANK OF CANADA, as Lender |
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by |
"Authorized Signatory" |
|
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Name: Authorized Signatory |
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|
Title: Authorized Signatory |
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|
"Authorized Signatory" |
|
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Name: Authorized Signatory |
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Title: Authorized Signatory |
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BARCLAYS BANK PLC, as Lender |
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|
by |
"Authorized Signatory" |
|
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Name: Authorized Signatory |
|
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|
Title: Authorized Signatory |
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|
"Authorized Signatory" |
|
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Name: Authorized Signatory |
|
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Title: Authorized Signatory |
|
Signature Page to Amending Agreement No. 1 (Cda)
REDACTED - Execution Version
AMENDING AGREEMENT NO. 2
MEMORANDUM OF AGREEMENT made as of September 29, 2022.
AMONG:
HUDBAY MINERALS INC.,
as Borrower,
- and -
CERTAIN OF ITS SUBSIDIARIES,
as Guarantors, Material Subsidiaries, Restricted Subsidiaries and/or Obligors,
- and -
CANADIAN IMPERIAL BANK OF COMMERCE,
as Administrative Agent,
- and -
THE LENDERS FROM TIME TO TIME PARTY TO THE CREDIT AGREEMENT.
WHEREAS the Borrower, certain of its Subsidiaries, the Agent and certain financial institutions as lenders entered into a fifth amended and restated credit agreement dated as of October 26, 2021, as amended by an amending agreement no.1 dated as of April 13, 2022 (as further amended, modified, supplemented or replaced to the date hereof, the "Credit Agreement");
AND WHEREAS the parties hereto wish to further amend the Credit Agreement;
NOW THEREFORE THIS AGREEMENT WITNESSES that, in consideration of the premises, the covenants herein contained and for other valuable consideration (the receipt and sufficiency of which are hereby acknowledged by each of the parties), the parties hereto agree as follows:
1. Interpretation
(a) All words and expressions defined in the Credit Agreement and not otherwise defined in this Agreement have the meaning specified in the Credit Agreement, as amended by this Agreement (notwithstanding the application of Section 2).
(b) Sections 1.2, 1.3, 1.4 and 13.2 of the Credit Agreement are incorporated herein by reference.
(c) Unless expressly stated otherwise, all references herein to sections of an agreement other than this Agreement shall be to sections of the Credit Agreement.
(d) Section headings are for convenience only.
- 2 -
2. Effective Date
The amendments set forth in Section 3 herein shall be effective on and as of the date the conditions set forth in Section 5 have been satisfied.
3. Amendments to the Credit Agreement
(a) Section 1.1 of the Credit Agreement is amended by adding the following definitions in alphabetical order:
""Deposit Account Control Agreement" is defined in Section 8.2(n).";
""Semi-Annual Interest Note Payment" is defined in Section 8.2(n)."; and
""U.S. Bank Interest Payment Accounts" means, collectively, the bank accounts listed on Schedule 8.2(n) and any other bank accounts maintained or established by the Borrower with U.S. Bank National Association or its Affiliates in accordance with Section 8.2(n).".
(b) The following is added as a new Section 4.1.1 of the Credit Agreement:
"4.1.1 Waiver of Perfection Requirement
(a) Subject to Section 4.1.1(b), notwithstanding any provision contained in the Loan Documents, the Agent and the Lenders acknowledge and agree that any obligation under the Loan Documents for the Liens granted by the Borrower in favour of the Agent over the U.S. Bank Interest Payment Accounts to be perfected is hereby waived.
(b) Upon the execution and delivery of the Deposit Account Control Agreement, Section 4.1.1(a) shall cease to be operative.".
(c) The following is added as a new Section 8.2(n) of the Credit Agreement:
"(n) U.S. Bank Interest Payment Accounts
The Borrower shall (i) maintain the U.S. Bank Interest Payment Accounts for the limited purpose of holding each semi-annual interest payment required in connection with the Note Indentures (each, a "Semi-Annual Interest Note Payment") for a period of up to five Banking Days prior to the applicable payment date for such Semi-Annual Interest Note Payment, (ii) ensure that control over any U.S. Bank Interest Payment Account is granted only in favour of the Agent or any other Person as directed by the Agent, (iii) use commercially reasonable efforts to obtain a deposit account control agreement with U.S. Bank National Association (or its Affiliates, as applicable) in favour of the Agent and the Lenders in respect of the U.S. Bank Interest Payment Accounts (on terms acceptable to the Agent) (the "Deposit Account Control Agreement") (and any related legal opinions, certificates or other documentation requested by the Agent) in advance of the Semi-Annual Interest Note Payment due on April 1, 2023 (or such later date as may be agreed by the Agent), (iv) deliver to the Agent any U.S. law governed security agreements (and any related legal opinions, certificates or other documentation requested by the Agent) which the Agent, acting in good faith, believes is necessary to create, preserve, perfect or protect the Liens granted (or required to be granted) in favour of the Agent in the U.S. Bank Interest Payment Accounts within 15 days of request from the Agent, (v) ensure that the aggregate balance of the U.S. Bank Interest Payment Accounts is zero other than (A) for any period which is five Banking Days prior to the date on which a Semi-Annual Interest Note Payment is due, in which case the aggregate balance of the U.S. Bank Interest Payment Accounts shall not exceed the amount of such Semi-Annual Interest Note Payment and (B) for purposes of the payment of standard account administration fees, which such fees shall be debited from the U.S. Bank Interest Payment Accounts by U.S. Bank National Association (or its Affiliates (if applicable), as applicable in accordance with standard market practice) and (vi) ensure that no bank accounts or securities accounts are established or maintained by it with U.S. Bank National Association or any of its Affiliates other than the bank accounts listed on Schedule 8.2(n) or as otherwise consented to by the Agent;".
- 3 -
(d) The following is added as a new Section 8.2(o) of the Credit Agreement:
"(o) Account Balance
The Borrower shall, within two Banking Days following the written request of the Agent, provide the Agent with written confirmation of the aggregate balance of the U.S. Bank Interest Payment Accounts.".
(e) Section 9.1(e) of the Credit Agreement is deleted in its entirety and replaced with the following:
"(e) if the Obligors shall, or shall permit any of their Subsidiaries, as the case may be, to, default in the observance or performance of any agreement, covenant or condition contained in Article 4 and Sections 8.1, 8.2(g), 8.2(m), 8.2(n), 8.3(b)(i)(A), 8.5, 8.6 and 12.1;".
(f) Schedule C is deleted in its entirety and replaced with Appendix A attached hereto.
(g) Appendix B attached hereto is added as a new Schedule 8.2(n).
- 4 -
4. Representations & Warranties
Each Obligor represents and warrants to the Agent and the Lenders, acknowledging and confirming that the Agent and the Lenders are relying thereon without independent inquiry, that:
(a) the representations and warranties set forth in the Loan Documents and given by it are true and correct in all material respects on and as of the date hereof (except to the extent such representations and warranties relate to a specific date, in which case such representations and warranties shall have been true and correct in all material respects on and as of such date); and
(b) no Default or Event of Default has occurred and is continuing nor shall any Default or Event of Default result from the execution, delivery or performance of this Agreement.
5. Conditions Precedent
Section 3 of this Agreement shall not be effective until satisfaction or waiver of the following conditions, each to the satisfaction of the Lenders:
(a) this Agreement shall be executed and delivered by the parties hereto;
(b) the representations and warranties set forth in Section 4 of this Agreement shall be true and correct;
(c) no Default or Event of Default shall have occurred and be continuing; and
(d) the Agent shall have received such other documents as the Lenders may reasonably require.
The conditions set forth in this Section 5 are inserted for the sole benefit of the Lenders and may be waived, in whole or in part by the Lenders, with or without terms or conditions.
6. Confirmation of Security, etc.
Each Obligor agrees and confirms that:
(a) each of the Guarantees shall continue in full force and effect;
(b) each of the Security Documents shall continue in full force and effect and shall continue as security for the due and punctual payment and performance of the Obligations and the Other Secured Obligations;
(c) the Liens granted by the Obligors in favour of the Agent and the Lenders pursuant to each of the Security Documents shall continue in full force and effect as general and continuing security for the payment of all Obligations and all Other Secured Obligations, whether incurred prior to, at the time of, or subsequent to the execution of this Amending Agreement; and
(d) each of the Guarantees and Security Documents is enforceable against it by the Agent in accordance with its terms.
- 5 -
7. Miscellaneous
(a) The parties hereto agree that this Agreement shall be a Loan Document.
(b) With the exception of the foregoing amendments, the Credit Agreement shall continue in full force and effect, unamended.
(c) This Agreement and the Credit Agreement shall enure to the benefit of and be binding upon the parties, their successors and any permitted assigns.
(d) This Agreement may be executed in any number of counterparts and all of such counterparts taken together shall be deemed to constitute one and the same instrument.
(e) This Agreement shall be governed by and interpreted and enforced in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein.
(f) The Obligors shall promptly cure any default in its execution and delivery of this Agreement. The Obligors, at the expense of the Borrower, will promptly execute and deliver, or cause to be executed and delivered, to the Agent, upon reasonable request, all such other and further documents, agreements, certificates and instruments in compliance with, or accomplishment of the covenants and agreements of the Obligors hereunder or more fully to state the obligations of the Obligors as set out herein or in the Credit Agreement or to make any recording, file any notice or obtain any consents, all as may be necessary or appropriate in connection therewith.
(g) Time is of the essence of this Agreement.
[Signature pages follow.]
IN WITNESS WHEREOF the parties hereto have executed this Agreement.
|
|
HUDBAY MINERALS INC. |
|
|
by |
"Jon A. Douglas" |
|
|
|
Name: Jon A. Douglas |
|
|
|
Title: Vice President and Treasurer |
|
|
|
by |
"Patrick Donnelly" |
|
|
Name: Patrick Donnelly |
|
|
|
Title: Senior VP, Legal and Organizational Effectiveness |
|
|
HUDBAY MARKETING & SALES INC. |
|
|
by |
"Patrick Donnelly" |
|
|
|
Name: Patrick Donnelly |
|
|
|
Title: Senior VP, Legal and Organizational Effectiveness |
|
|
|
HUDBAY PERU INC. |
|
|
by |
"Patrick Donnelly" |
|
|
|
Name: Patrick Donnelly |
|
|
|
Title: Senior VP, Legal and Organizational Effectiveness |
|
|
|
HUDBAY PERU S.A.C. |
|
|
by |
"Luis Alfonso Santivañez Silva" |
|
|
|
Name: Luis Alfonso Santivañez Silva |
|
|
|
Title: General Manager |
|
|
|
HUDBAY (BVI) INC. |
|
|
by |
"Robert Briant" |
|
|
|
Name: Robert Briant |
|
|
|
Title: Director |
|
Signature Page to Amending Agreement No. 2 (Cda)
S-2
|
|
6502873 CANADA INC. |
|
|
by |
"Patrick Donnelly" |
|
|
|
Name: Patrick Donnelly |
|
|
|
Title: Senior VP, Legal and Organizational Effectiveness |
|
|
|
HUDBAY ARIZONA (BARBADOS) SRL |
|
|
by |
"Sir Trevor Carmichael" |
|
|
|
Name: Sir Trevor Carmichael |
|
|
|
Title: Director |
|
|
|
HUDBAY ARIZONA INC. |
|
|
by |
"Patrick Donnelly" |
|
|
|
Name: Patrick Donnelly |
|
|
|
Title: Senior VP, Legal and Organizational Effectiveness |
|
|
|
HUDBAY ARIZONA (US) CORPORATION |
|
|
by |
"Andre Lauzon" |
|
|
|
Name: Andre Lauzon |
|
|
|
Title: President and Chief Operating Officer |
|
|
|
HUDBAY ARIZONA (US) HOLDING CORPORATION |
|
|
by |
"Andre Lauzon" |
|
|
|
Name: Andre Lauzon |
|
|
|
Title: President and Chief Operating Officer |
|
|
|
COBRE VERDE DEVELOPMENT CORPORATION |
|
|
by |
"Matthew Bingham" |
|
|
|
Name: Matthew Bingham |
|
|
|
Title: Secretary |
|
Signature Page to Amending Agreement No. 2 (Cda)
S-3
|
|
ROSEMONT COPPER COMPANY |
|
|
by |
"Matthew Bingham" |
|
|
|
Name: Matthew Bingham |
|
|
|
Title: Secretary |
|
|
|
MASON RESOURCES (US) INC. |
|
|
by |
"Matthew Bingham" |
|
|
|
Name: Matthew Bingham |
|
|
|
Title: Secretary |
|
|
|
11215850 CANADA LIMITED |
|
|
by |
"Patrick Donnelly" |
|
|
|
Name: Patrick Donnelly |
|
|
|
Title: Senior VP, Legal and Organizational Effectiveness |
|
|
|
SONORAN PROPERTY INVESTORS LLC, by Rosemont Copper Company, its sole Member and Manager |
|
|
by |
"Matthew Bingham" |
|
|
|
Name: Matthew Bingham |
|
|
|
Title: Secretary |
|
Signature Page to Amending Agreement No. 2 (Cda)
S-4
Administrative Agent
|
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CANADIAN IMPERIAL BANK OF COMMERCE, as Agent |
|
|
by |
"Authorized Signatory" |
|
|
|
Name: Authorized Signatory |
|
|
|
Title: Authorized Signatory |
|
|
|
"Authorized Signatory" |
|
|
|
Name: Authorized Signatory |
|
|
|
Title: Authorized Signatory |
|
The Lenders
|
|
CANADIAN IMPERIAL BANK OF COMMERCE, as Lender |
|
|
by |
"Authorized Signatory" |
|
|
|
Name: Authorized Signatory |
|
|
|
Title: Authorized Signatory |
|
|
|
"Authorized Signatory" |
|
|
|
Name: Authorized Signatory |
|
|
|
Title: Authorized Signatory |
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|
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THE BANK OF NOVA SCOTIA, as Lender |
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|
by |
"Authorized Signatory" |
|
|
|
Name: Authorized Signatory |
|
|
|
Title: Authorized Signatory |
|
|
|
"Authorized Signatory" |
|
|
|
Name: Authorized Signatory |
|
|
|
Title: Authorized Signatory |
|
|
|
ING CAPITAL LLC, as Lender |
|
|
by |
"Authorized Signatory" |
|
|
|
Name: Authorized Signatory |
|
|
|
Title: Authorized Signatory |
|
|
|
"Authorized Signatory" |
|
|
|
Name: Authorized Signatory |
|
|
|
Title: Authorized Signatory |
|
Signature Page to Amending Agreement No. 2 (Cda)
S-5
|
|
BANK OF MONTREAL, as Lender |
|
|
by |
"Authorized Signatory" |
|
|
|
Name: Authorized Signatory |
|
|
|
Title: Authorized Signatory |
|
|
|
ROYAL BANK OF CANADA, as Lender |
|
|
by |
"Authorized Signatory" |
|
|
|
Name: Authorized Signatory |
|
|
|
Title: Authorized Signatory |
|
|
|
THE TORONTO-DOMINION BANK, as Lender |
|
|
by |
"Authorized Signatory" |
|
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Name: Authorized Signatory |
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Title: Authorized Signatory |
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"Authorized Signatory" |
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Name: Authorized Signatory |
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Title: Authorized Signatory |
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NATIONAL BANK OF CANADA, as Lender |
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by |
"Authorized Signatory" |
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Name: Authorized Signatory |
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Title: Authorized Signatory |
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"Authorized Signatory" |
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Name: Authorized Signatory |
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Title: Authorized Signatory |
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BARCLAYS BANK PLC, as Lender |
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by |
"Authorized Signatory" |
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Name: Authorized Signatory |
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Title: Authorized Signatory |
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"Authorized Signatory" |
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Name: Authorized Signatory |
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Title: Authorized Signatory |
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Signature Page to Amending Agreement No. 2 (Cda)
Appendix A
COMPLIANCE CERTIFICATE
TO: THE LENDERS (as defined in the Credit Agreement referred to below)
AND TO: CANADIAN IMPERIAL BANK OF COMMERCE, as Agent
Canadian Imperial Bank of Commerce
Infrastructure/Technology, Infrastructure and Innovation
595 Bay Street, CPS-5th Floor
Toronto, Ontario M5G 2C2
Attention: Global Agent Administration Services
Telephone: 416.956.3830
Email: dlgo-agency@cibc.com
with a copy to:
Canadian Imperial Bank of Commerce
161 Bay Street, 8th Floor
Toronto, Ontario M5J 2S8
Attention: Kazim Mehdi, Managing Director
Email: Kazim.Mehdi@cibc.com
We refer to Section 8.3(a)(iii) of the Fifth Amended and Restated Credit Agreement effective as of October 26, 2021 between Hudbay Minerals Inc. and others as Guarantors, Material Subsidiaries, Restricted Subsidiaries and/or Obligors, Canadian Imperial Bank of Commerce as Agent and the Lenders named therein, as amended, supplemented, restated or replaced from time to time (the "Credit Agreement"). All capitalized terms used in this certificate and defined in the Credit Agreement have the meanings defined in the Credit Agreement. This Compliance Certificate relates to the Borrower's fiscal [quarter/year] ended ■ (the "[Quarter/Year] End").
1. The Borrower hereby certifies that:
(a) the representations and warranties made in Section 7.1 of the Credit Agreement and each of the other Loan Documents, other than those expressly stated to be made as of a specific date, were true and correct on the [Quarter/Year] End and are true on and as of the date hereof with the same effect as if such representations and warranties had been made on and as of the [Quarter/Year] End and date hereof;
(b) no Default or Event of Default had occurred and was continuing as of the [Quarter/Year] End; and
S-2
(c) no Default or Event of Default has occurred and is continuing on the date hereof [or as the case may be].
2. The Borrower hereby certifies that, as of the [Quarter/Year] End:
(a) the Senior Secured Debt to EBITDA Ratio was ■:■;
(b) the Interest Coverage Ratio was ■:■; and
(c) the Total Net Debt to EBITDA Ratio was ■:■.
3. The Borrower hereby certifies that during the fiscal [quarter/year] immediately preceding the [Quarter/Year] End, the maximum aggregate balance of the U.S. Bank Interest Payment Accounts was ■ and the balance as at the [Quarter/Year End] was $■.
4. Appendix A attached sets out the calculations referred to in item 2 above.
5. Appendix B attached sets out a complete, detailed and accurate list of all Equity Interests or other securities owned or held by any Hudbay Group Member in any Person who is not a Subsidiary of such Hudbay Group Member as at the as at [Quarterly/Year] End.
6. Except as disclosed pursuant to Sections 8.3(b)(i)(L), 8.3(b)(i)(N), 8.3(b)(i)(P) and 8.3(b)(i)(R) of the Credit Agreement or as disclosed in writing to the Agent in connection with the delivery of this Compliance Certificate no mining claims, real property, interest in mining claims or interest in mining claims or real property (including any Mine Properties, Owned Real Property, Leased Real Property, Mining Leases, Mining Rights and Mining Title) has been acquired by any Hudbay Group Member in Peru since the date of the most recently delivered Compliance Certificate and except as disclosed in writing to the Agent no such mining claim, real property, interest in mining claims or interest in real property (including any Mine Properties, Owned Real Property, Leased Real Property, Mining Leases, Mining Rights and Mining Title) is or could reasonably be expected to be material to: (a) the operation of the Constancia Mine, (b) the operation of Hudbay Peru SAC or (c) the Hudbay Group's business, affairs, property, liabilities or financial condition in Peru.
DATED _________________, 20___.
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HUDBAY MINERALS INC.
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By |
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Name: |
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Title: |
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Appendix B
SCHEDULE 8.2(n)
BANK ACCOUNTS
1. [REDACTED - COMMERCIALLY SENSITIVE INFORMATION]
2. [REDACTED - COMMERCIALLY SENSITIVE INFORMATION]
REDACTED - Execution Version
AMENDING AGREEMENT NO. 1
MEMORANDUM OF AGREEMENT made as of April 13, 2022.
AMONG:
HUDBAY PERU S.A.C.,
as Borrower,
- and -
CERTAIN OF ITS AFFILIATES,
as Guarantors, Material Subsidiaries, Restricted Subsidiaries and/or Obligors,
- and -
CANADIAN IMPERIAL BANK OF COMMERCE,
as Administrative Agent,
- and -
THE LENDERS FROM TIME TO TIME PARTY TO THE CREDIT AGREEMENT.
WHEREAS the Borrower, certain of its Affiliates, the Agent and certain financial institutions as lenders entered into a third amended and restated credit agreement dated as of October 26, 2021 (as further amended, modified, supplemented or replaced to the date hereof, the "Credit Agreement");
AND WHEREAS the parties hereto wish to amend the Credit Agreement;
NOW THEREFORE THIS AGREEMENT WITNESSES that, in consideration of the premises, the covenants herein contained and for other valuable consideration (the receipt and sufficiency of which are hereby acknowledged by each of the parties), the parties hereto agree as follows:
1. Interpretation
(a) All words and expressions defined in the Credit Agreement and not otherwise defined in this Agreement have the meaning specified in the Credit Agreement, as amended by this Agreement (notwithstanding the application of Section 2).
(b) Sections 1.2, 1.3, 1.4 and 13.2 of the Credit Agreement are incorporated herein by reference.
(c) Unless expressly stated otherwise, all references herein to sections of an agreement other than this Agreement shall be to sections of the Credit Agreement.
(d) Section headings are for convenience only.
- 2 -
2. Effective Date
The amendments set forth in Section 3 herein shall be effective on and as of the date the conditions set forth in Section 5 have been satisfied.
3. Amendments to the Credit Agreement
(a) Section 1.1 of the Credit Agreement is amended by deleting the definition of "[REDACTED - COMMERCIALLY SENSITIVE INFORMATION] Receivables Sale Agreement" in its entirety and replacing it with the following:
"[REDACTED - COMMERCIALLY SENSITIVE INFORMATION] Receivables Sale Agreement" means the supplier agreement to be entered into between Hudbay and Citibank N.A. (or one of its affiliates or subsidiaries acceptable to the Agent acting reasonably) (in form and substance acceptable to the Agent, acting reasonably) in respect of certain receivables due from [REDACTED - COMMERCIALLY SENSITIVE INFORMATION]or one of its affiliates or subsidiaries."
(b) Section 1.1 of the Credit Agreement is further amended by deleting paragraph (x) of the definition of "Permitted Liens" in its entirety and replacing it with the following:
"(x) (i) security interests granted by Hudbay to any of Citibank N.A., its branches, affiliates or subsidiaries in connection with the sale by Hudbay pursuant to the [REDACTED - COMMERCIALLY SENSITIVE INFORMATION] Receivables Sale Agreement of accounts receivables owed by [REDACTED - COMMERCIALLY SENSITIVE INFORMATION]to Hudbay provided that the security interest shall only attach to such transferred accounts receivables and (ii) if a court of competent jurisdiction determines that the transactions contemplated by the [REDACTED - COMMERCIALLY SENSITIVE INFORMATION] Receivables Sale Agreement constitute secured loans rather than purchases and sales, security interests granted by Hudbay to any of Citibank N.A., its branches, affiliates or subsidiaries in and to any and all present and future accounts receivable which were expressly the subject such [REDACTED - COMMERCIALLY SENSITIVE INFORMATION] Receivables Sale Agreement provided that the security interest shall only attach to such transferred accounts receivables and shall only secure the repayment of amounts paid by Citibank pursuant to the [REDACTED - COMMERCIALLY SENSITIVE INFORMATION] Receivables Sale Agreement;"
- 3 -
4. Representations & Warranties
Each Obligor represents and warrants to the Agent and the Lenders, acknowledging and confirming that the Agent and the Lenders are relying thereon without independent inquiry, that:
(a) the representations and warranties set forth in the Loan Documents and given by it are true and correct in all material respects on and as of the date hereof (except to the extent such representations and warranties relate to a specific date, in which case such representations and warranties shall have been true and correct in all material respects on and as of such date); and
(b) no Default or Event of Default has occurred and is continuing nor shall any Default or Event of Default result from the execution, delivery or performance of this Agreement.
5. Conditions Precedent
Section 3 of this Agreement shall not be effective until satisfaction or waiver of the following conditions, each to the satisfaction of the Lenders:
(a) this Agreement shall be executed and delivered by the parties hereto;
(b) the representations and warranties set forth in Section 4 of this Agreement shall be true and correct;
(c) no Default or Event of Default shall have occurred and be continuing; and
(d) the Agent shall have received such other documents as the Lenders may reasonably require.
The conditions set forth in this Section 5 are inserted for the sole benefit of the Lenders and may be waived, in whole or in part by the Lenders, with or without terms or conditions.
6. Confirmation of Security, etc.
Each Obligor agrees and confirms that:
(a) each of the Guarantees shall continue in full force and effect;
(b) each of the Security Documents shall continue in full force and effect and shall continue as security for the due and punctual payment and performance of the Obligations and the Other Secured Obligations;
(c) the Liens granted by the Obligors in favour of the Agent and the Lenders pursuant to each of the Security Documents shall continue in full force and effect as general and continuing security for the payment of all Obligations and all Other Secured Obligations, whether incurred prior to, at the time of, or subsequent to the execution of this Amending Agreement; and
(d) each of the Guarantees and Security Documents is enforceable against it by the Agent in accordance with its terms.
- 4 -
7. Miscellaneous
(a) The parties hereto agree that this Agreement shall be a Loan Document.
(b) With the exception of the foregoing amendments, the Credit Agreement shall continue in full force and effect, unamended.
(c) This Agreement and the Credit Agreement shall enure to the benefit of and be binding upon the parties, their successors and any permitted assigns.
(d) This Agreement may be executed in any number of counterparts and all of such counterparts taken together shall be deemed to constitute one and the same instrument.
(e) This Agreement shall be governed by and interpreted and enforced in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein.
(f) The Obligors shall promptly cure any default in its execution and delivery of this Agreement. The Obligors, at the expense of the Borrower, will promptly execute and deliver, or cause to be executed and delivered, to the Agent, upon reasonable request, all such other and further documents, agreements, certificates and instruments in compliance with, or accomplishment of the covenants and agreements of the Obligors hereunder or more fully to state the obligations of the Obligors as set out herein or in the Credit Agreement or to make any recording, file any notice or obtain any consents, all as may be necessary or appropriate in connection therewith.
(g) Time is of the essence of this Agreement.
[Signature pages follow.]
IN WITNESS WHEREOF the parties hereto have executed this Agreement.
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HUDBAY PERU S.A.C. |
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by |
"Luis Alfonso Santivañez Silva" |
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Name: Luis Alfonso Santivañez Silva |
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Title: General Manager |
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by |
"Gregory Paul Dryden" |
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Name: Gregory Paul Dryden |
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Title: CFO, South American Business Unit |
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HUDBAY MARKETING & SALES INC. |
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by |
"Patrick Donnelly" |
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Name: Patrick Donnelly |
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Title: Director, Vice President, General Counsel and Corporate Secretary |
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HUDBAY PERU INC. |
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by |
"Patrick Donnelly" |
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Name: Patrick Donnelly |
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Title: Director and Secretary |
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HUDBAY MINERALS INC. |
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by |
"Patrick Donnelly" |
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Name: Patrick Donnelly |
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Title: Vice President, General Counsel and Corporate Secretary |
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HUDBAY (BVI) INC. |
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by |
"Robert Briant" |
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Name: Robert Briant |
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Title: Director |
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Signature Page to Amending Agreement No. 1 (Peru)
S-2
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6502873 CANADA INC. |
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by |
"Patrick Donnelly" |
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Name: Patrick Donnelly |
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Title: Director, Vice President, General Counsel and Corporate Secretary |
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HUDBAY ARIZONA (BARBADOS) SRL |
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by |
"Patrick Donnelly" |
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Name: Patrick Donnelly |
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Title: Director, Vice President and General Counsel |
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HUDBAY ARIZONA INC. |
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by |
"Patrick Donnelly" |
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Name: Patrick Donnelly |
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Title: Director, Vice President and General Counsel |
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HUDBAY ARIZONA (US) CORPORATION |
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by |
"Andre Lauzon" |
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Name: Andre Lauzon |
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Title: President and Chief Operating Officer |
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HUDBAY ARIZONA (US) HOLDING CORPORATION |
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by |
"Andre Lauzon" |
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Name: Andre Lauzon |
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Title: President and Chief Operating Officer |
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COBRE VERDE DEVELOPMENT CORPORATION |
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by |
"Matthew Bingham" |
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Name: Matthew Bingham |
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Title: Director and Secretary |
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Signature Page to Amending Agreement No. 1 (Peru)
S-3
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ROSEMONT COPPER COMPANY |
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by |
"Matthew Bingham" |
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Name: Matthew Bingham |
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Title: Director and Secretary |
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MASON RESOURCES (US) INC. |
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by |
"Matthew Bingham" |
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Name: Matthew Bingham |
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Title: Director and Secretary |
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11215850 CANADA LIMITED |
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by |
"Patrick Donnelly" |
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Name: Patrick Donnelly |
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Title: Director, Vice President and General Counsel |
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SONORAN PROPERTY INVESTORS LLC, by Rosemont Copper Company, its sole Member and Manager |
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by |
"Matthew Bingham" |
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Name: Matthew Bingham |
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Title: Secretary |
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Signature Page to Amending Agreement No. 1 (Peru)
S-4
Administrative Agent
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CANADIAN IMPERIAL BANK OF COMMERCE, as Agent |
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by |
"Authorized Signatory" |
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Name: Authorized Signatory |
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Title: Authorized Signatory |
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"Authorized Signatory" |
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Name: Authorized Signatory |
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Title: Authorized Signatory |
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The Lenders
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CANADIAN IMPERIAL BANK OF COMMERCE, as Lender |
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by |
"Authorized Signatory" |
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Name: Authorized Signatory |
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Title: Authorized Signatory |
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"Authorized Signatory" |
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Name: Authorized Signatory |
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Title: Authorized Signatory |
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THE BANK OF NOVA SCOTIA, as Lender |
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by |
"Authorized Signatory" |
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Name: Authorized Signatory |
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Title: Authorized Signatory |
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"Authorized Signatory" |
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Name: Authorized Signatory |
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Title: Authorized Signatory |
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ING CAPITAL LLC, as Lender |
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by |
"Authorized Signatory" |
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Name: Authorized Signatory |
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Title: Authorized Signatory |
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"Authorized Signatory" |
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Name: Authorized Signatory |
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Title: Authorized Signatory |
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Signature Page to Amending Agreement No. 1 (Peru)
S-5
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BANK OF MONTREAL, as Lender |
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by |
"Authorized Signatory" |
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Name: Authorized Signatory |
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Title: Authorized Signatory |
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ROYAL BANK OF CANADA, as Lender |
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by |
"Authorized Signatory" |
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Name: Authorized Signatory |
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Title: Authorized Signatory |
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THE TORONTO-DOMINION BANK, as Lender |
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by |
"Authorized Signatory" |
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Name: Authorized Signatory |
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Title: Authorized Signatory |
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"Authorized Signatory" |
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Name: Authorized Signatory |
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Title: Authorized Signatory |
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NATIONAL BANK OF CANADA, as Lender |
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by |
"Authorized Signatory" |
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Name: Authorized Signatory |
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Title: Authorized Signatory |
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"Authorized Signatory" |
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Name: Authorized Signatory |
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Title: Authorized Signatory |
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BARCLAYS BANK PLC, as Lender |
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by |
"Authorized Signatory" |
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Name: Authorized Signatory |
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Title: Authorized Signatory |
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"Authorized Signatory" |
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Name: Authorized Signatory |
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Title: Authorized Signatory |
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Signature Page to Amending Agreement No. 1 (Peru)
S-6
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SCOTIABANK PERÚ S.A.A., as Lender |
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by |
"Authorized Signatory" |
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Name: Authorized Signatory |
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Title: Authorized Signatory |
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"Authorized Signatory" |
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Name: Authorized Signatory |
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Title: Authorized Signatory |
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Signature Page to Amending Agreement No. 1 (Peru)
REDACTED - Execution Version
AMENDING AGREEMENT NO. 2
MEMORANDUM OF AGREEMENT made as of September 29, 2022.
AMONG:
HUDBAY PERU S.A.C.,
as Borrower,
- and -
CERTAIN OF ITS AFFILIATES,
as Guarantors, Material Subsidiaries, Restricted Subsidiaries and/or Obligors,
- and -
CANADIAN IMPERIAL BANK OF COMMERCE,
as Administrative Agent,
- and -
THE LENDERS FROM TIME TO TIME PARTY TO THE CREDIT AGREEMENT.
WHEREAS the Borrower, certain of its Affiliates, the Agent and certain financial institutions as lenders entered into a third amended and restated credit agreement dated as of October 26, 2021, as amended by an amending agreement no.1 dated as of April 13, 2022 (as further amended, modified, supplemented or replaced to the date hereof, the "Credit Agreement");
AND WHEREAS the parties hereto wish to further amend the Credit Agreement;
NOW THEREFORE THIS AGREEMENT WITNESSES that, in consideration of the premises, the covenants herein contained and for other valuable consideration (the receipt and sufficiency of which are hereby acknowledged by each of the parties), the parties hereto agree as follows:
1. Interpretation
(a) All words and expressions defined in the Credit Agreement and not otherwise defined in this Agreement have the meaning specified in the Credit Agreement, as amended by this Agreement (notwithstanding the application of Section 2).
(b) Sections 1.2, 1.3, 1.4 and 13.2 of the Credit Agreement are incorporated herein by reference.
(c) Unless expressly stated otherwise, all references herein to sections of an agreement other than this Agreement shall be to sections of the Credit Agreement.
(d) Section headings are for convenience only.
- 2 -
2. Effective Date
The amendments set forth in Section 3 herein shall be effective on and as of the date the conditions set forth in Section 5 have been satisfied.
3. Amendments to the Credit Agreement
(a) Section 1.1 of the Credit Agreement is amended by adding the following definitions in alphabetical order:
""Deposit Account Control Agreement" is defined in Section 8.2(n).";
""Semi-Annual Interest Note Payment" is defined in Section 8.2(n)."; and
""U.S. Bank Interest Payment Accounts" means, collectively, the bank accounts listed on Schedule 8.2(n) and any other bank accounts maintained or established by Hudbay with U.S. Bank National Association or its Affiliates in accordance with Section 8.2(n).".
(b) The following is added as a new Section 4.2.1 of the Credit Agreement:
"4.2.1 Waiver of Perfection Requirement
(a) Subject to Section 4.2.1(b), notwithstanding any provision contained in the Loan Documents, the Agent and the Lenders acknowledge and agree that any obligation under the Loan Documents for the Liens granted by Hudbay in favour of the Agent over the U.S. Bank Interest Payment Accounts to be perfected is hereby waived.
(b) Upon the execution and delivery of the Deposit Account Control Agreement, Section 4.2.1(a) shall cease to be operative.".
(c) The following is added as a new Section 8.2(n) of the Credit Agreement:
"(n) U.S. Bank Interest Payment Accounts
Hudbay shall (i) maintain the U.S. Bank Interest Payment Accounts for the limited purpose of holding each semi-annual interest payment required in connection with the Note Indentures (each, a "Semi-Annual Interest Note Payment") for a period of up to five Banking Days prior to the applicable payment date for such Semi-Annual Interest Note Payment, (ii) ensure that control over any U.S. Bank Interest Payment Account is granted only in favour of the Agent or any other Person as directed by the Agent, (iii) use commercially reasonable efforts to obtain a deposit account control agreement with U.S. Bank National Association (or its Affiliates, as applicable) in favour of the Agent and the Lenders in respect of the U.S. Bank Interest Payment Accounts (on terms acceptable to the Agent) (the "Deposit Account Control Agreement") (and any related legal opinions, certificates or other documentation requested by the Agent) in advance of the Semi-Annual Interest Note Payment due on April 1, 2023 (or such later date as may be agreed by the Agent), (iv) deliver to the Agent any U.S. law governed security agreements (and any related legal opinions, certificates or other documentation requested by the Agent) which the Agent, acting in good faith, believes is necessary to create, preserve, perfect or protect the Liens granted (or required to be granted) in favour of the Agent in the U.S. Bank Interest Payment Accounts within 15 days of request from the Agent, (v) ensure that the aggregate balance of the U.S. Bank Interest Payment Accounts is zero other than (A) for any period which is five Banking Days prior to the date on which a Semi-Annual Interest Note Payment is due, in which case the aggregate balance of the U.S. Bank Interest Payment Accounts shall not exceed the amount of such Semi-Annual Interest Note Payment and (B) for purposes of the payment of standard account administration fees, which such fees shall be debited from the U.S. Bank Interest Payment Accounts by U.S. Bank National Association (or its Affiliates (if applicable), as applicable in accordance with standard market practice) and (vi) ensure that no bank accounts or securities accounts are established or maintained by it with U.S. Bank National Association or any of its Affiliates other than the bank accounts listed on Schedule 8.2(n) or as otherwise consented to by the Agent;".
- 3 -
(d) The following is added as a new Section 8.2(o) of the Credit Agreement:
"(o) Account Balance
Hudbay shall, within two Banking Days following the written request of the Agent, provide the Agent with written confirmation of the aggregate balance of the U.S. Bank Interest Payment Accounts.".
(e) Section 9.1(e) of the Credit Agreement is deleted in its entirety and replaced with the following:
"(e) if the Obligors shall, or shall permit any of their Subsidiaries, as the case may be, to, default in the observance or performance of any agreement, covenant or condition contained in Article 4 and Sections 8.1, 8.2(g), 8.2(m), 8.2(n), 8.3(b)(i)(A), 8.5, 8.6 and 12.1;".
(f) Schedule C is deleted in its entirety and replaced with Appendix A attached hereto.
(g) Appendix B attached hereto is added as a new Schedule 8.2(n).
- 4 -
4. Representations & Warranties
Each Obligor represents and warrants to the Agent and the Lenders, acknowledging and confirming that the Agent and the Lenders are relying thereon without independent inquiry, that:
(a) the representations and warranties set forth in the Loan Documents and given by it are true and correct in all material respects on and as of the date hereof (except to the extent such representations and warranties relate to a specific date, in which case such representations and warranties shall have been true and correct in all material respects on and as of such date); and
(b) no Default or Event of Default has occurred and is continuing nor shall any Default or Event of Default result from the execution, delivery or performance of this Agreement.
5. Conditions Precedent
Section 3 of this Agreement shall not be effective until satisfaction or waiver of the following conditions, each to the satisfaction of the Lenders:
(a) this Agreement shall be executed and delivered by the parties hereto;
(b) the representations and warranties set forth in Section 4 of this Agreement shall be true and correct;
(c) no Default or Event of Default shall have occurred and be continuing; and
(d) the Agent shall have received such other documents as the Lenders may reasonably require.
The conditions set forth in this Section 5 are inserted for the sole benefit of the Lenders and may be waived, in whole or in part by the Lenders, with or without terms or conditions.
6. Confirmation of Security, etc.
Each Obligor agrees and confirms that:
(a) each of the Guarantees shall continue in full force and effect;
(b) each of the Security Documents shall continue in full force and effect and shall continue as security for the due and punctual payment and performance of the Obligations and the Other Secured Obligations;
(c) the Liens granted by the Obligors in favour of the Agent and the Lenders pursuant to each of the Security Documents shall continue in full force and effect as general and continuing security for the payment of all Obligations and all Other Secured Obligations, whether incurred prior to, at the time of, or subsequent to the execution of this Amending Agreement; and
(d) each of the Guarantees and Security Documents is enforceable against it by the Agent in accordance with its terms.
- 5 -
7. Miscellaneous
(a) The parties hereto agree that this Agreement shall be a Loan Document.
(b) With the exception of the foregoing amendments, the Credit Agreement shall continue in full force and effect, unamended.
(c) This Agreement and the Credit Agreement shall enure to the benefit of and be binding upon the parties, their successors and any permitted assigns.
(d) This Agreement may be executed in any number of counterparts and all of such counterparts taken together shall be deemed to constitute one and the same instrument.
(e) This Agreement shall be governed by and interpreted and enforced in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein.
(f) The Obligors shall promptly cure any default in its execution and delivery of this Agreement. The Obligors, at the expense of the Borrower, will promptly execute and deliver, or cause to be executed and delivered, to the Agent, upon reasonable request, all such other and further documents, agreements, certificates and instruments in compliance with, or accomplishment of the covenants and agreements of the Obligors hereunder or more fully to state the obligations of the Obligors as set out herein or in the Credit Agreement or to make any recording, file any notice or obtain any consents, all as may be necessary or appropriate in connection therewith.
(g) Time is of the essence of this Agreement.
[Signature pages follow.]
IN WITNESS WHEREOF the parties hereto have executed this Agreement.
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HUDBAY PERU S.A.C. |
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by |
"Luis Alfonso Santivañez Silva" |
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Name: Luis Alfonso Santivañez Silva |
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Title: General Manager |
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by |
"Gregory Paul Dryden" |
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Name: Gregory Paul Dryden |
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Title: CFO, South American Business Unit |
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HUDBAY MARKETING & SALES INC. |
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by |
"Patrick Donnelly" |
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Name: Patrick Donnelly |
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Title: Senior VP, Legal and Organizational Effectiveness |
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HUDBAY PERU INC. |
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by |
"Patrick Donnelly" |
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Name: Patrick Donnelly |
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Title: Senior VP, Legal and Organizational Effectiveness |
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HUDBAY MINERALS INC. |
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by |
"Patrick Donnelly" |
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Name: Patrick Donnelly |
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Title: Senior VP, Legal and Organizational Effectiveness |
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HUDBAY (BVI) INC. |
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by |
"Robert Briant" |
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Name: Robert Briant |
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Title: Director |
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Signature Page to Amending Agreement No. 2 (Peru)
S-2
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6502873 CANADA INC. |
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by |
"Patrick Donnelly" |
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Name: Patrick Donnelly |
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Title: Senior VP, Legal and Organizational Effectiveness |
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HUDBAY ARIZONA (BARBADOS) SRL |
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by |
"Sir Trevor Carmichael" |
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Name: Sir Trevor Carmichael |
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Title: Director |
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HUDBAY ARIZONA INC. |
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by |
"Patrick Donnelly" |
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Name: Patrick Donnelly |
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Title: Senior VP, Legal and Organizational Effectiveness |
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HUDBAY ARIZONA (US) CORPORATION |
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by |
"Andre Lauzon" |
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Name: Andre Lauzon |
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Title: President and Chief Operating Officer |
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HUDBAY ARIZONA (US) HOLDING CORPORATION |
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by |
"Andre Lauzon" |
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Name: Andre Lauzon |
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Title: President and Chief Operating Officer |
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COBRE VERDE DEVELOPMENT CORPORATION |
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by |
"Matthew Bingham" |
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Name: Matthew Bingham |
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Title: Secretary |
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Signature Page to Amending Agreement No. 2 (Peru)
S-3
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ROSEMONT COPPER COMPANY |
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by |
"Matthew Bingham" |
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Name: Matthew Bingham |
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Title: Secretary |
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MASON RESOURCES (US) INC. |
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by |
"Matthew Bingham" |
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Name: Matthew Bingham |
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Title: Secretary |
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11215850 CANADA LIMITED |
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by |
"Patrick Donnelly" |
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Name: Patrick Donnelly |
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Title: Senior VP, Legal and Organizational Effectiveness |
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SONORAN PROPERTY INVESTORS LLC, by Rosemont Copper Company, its sole Member and Manager |
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by |
"Matthew Bingham" |
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Name: Matthew Bingham |
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Title: Secretary |
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Signature Page to Amending Agreement No. 2 (Peru)
S-4
Administrative Agent
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CANADIAN IMPERIAL BANK OF COMMERCE, as Agent |
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by |
"Authorized Signatory" |
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Name: Authorized Signatory |
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Title: Authorized Signatory |
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"Authorized Signatory" |
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Name: Authorized Signatory |
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Title: Authorized Signatory |
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The Lenders
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CANADIAN IMPERIAL BANK OF COMMERCE, as Lender |
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by |
"Authorized Signatory" |
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Name: Authorized Signatory |
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Title: Authorized Signatory |
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"Authorized Signatory" |
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Name: Authorized Signatory |
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Title: Authorized Signatory |
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THE BANK OF NOVA SCOTIA, as Lender |
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by |
"Authorized Signatory" |
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Name: Authorized Signatory |
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Title: Authorized Signatory |
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"Authorized Signatory" |
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Name: Authorized Signatory |
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Title: Authorized Signatory |
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ING CAPITAL LLC, as Lender |
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by |
"Authorized Signatory" |
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Name: Authorized Signatory |
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Title: Authorized Signatory |
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"Authorized Signatory" |
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Name: Authorized Signatory |
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Title: Authorized Signatory |
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Signature Page to Amending Agreement No. 2 (Peru)
S-5
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BANK OF MONTREAL, as Lender |
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by |
"Authorized Signatory" |
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Name: Authorized Signatory |
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Title: Authorized Signatory |
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ROYAL BANK OF CANADA, as Lender |
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by |
"Authorized Signatory" |
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Name: Authorized Signatory |
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Title: Authorized Signatory |
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THE TORONTO-DOMINION BANK, as Lender |
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by |
"Authorized Signatory" |
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Name: Authorized Signatory |
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Title: Authorized Signatory |
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"Authorized Signatory" |
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Name: Authorized Signatory |
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Title: Authorized Signatory |
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NATIONAL BANK OF CANADA, as Lender |
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by |
"Authorized Signatory" |
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Name: Authorized Signatory |
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Title: Authorized Signatory |
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"Authorized Signatory" |
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Name: Authorized Signatory |
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Title: Authorized Signatory |
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BARCLAYS BANK PLC, as Lender |
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by |
"Authorized Signatory" |
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Name: Authorized Signatory |
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Title: Authorized Signatory |
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"Authorized Signatory" |
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Name: Authorized Signatory |
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Title: Authorized Signatory |
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Signature Page to Amending Agreement No. 2 (Peru)
S-6
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SCOTIABANK PERÚ S.A.A., as Lender |
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by |
"Authorized Signatory" |
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Name: Authorized Signatory |
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Title: Authorized Signatory |
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"Authorized Signatory" |
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Name: Authorized Signatory |
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Title: Authorized Signatory |
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Signature Page to Amending Agreement No. 2 (Peru)
Appendix A
COMPLIANCE CERTIFICATE
TO: THE LENDERS (as defined in the Credit Agreement referred to below)
AND TO: CANADIAN IMPERIAL BANK OF COMMERCE, as Agent
Canadian Imperial Bank of Commerce
Infrastructure/Technology, Infrastructure and Innovation
595 Bay Street, CPS-5th Floor
Toronto, Ontario M5G 2C2
Attention: Global Agent Administration Services
Telephone: 416.956.3830
Email: dlgo-agency@cibc.com
with a copy to:
Canadian Imperial Bank of Commerce
161 Bay Street, 8th Floor
Toronto, Ontario M5J 2S8
Attention: Kazim Mehdi, Managing Director
Email: Kazim.Mehdi@cibc.com
We refer to Section 8.3(a)(iii) of the Third Amended and Restated Credit Agreement effective as of October 26, 2021 between Hudbay Peru S.A.C. and others as Guarantors, Material Subsidiaries, Restricted Subsidiaries and/or Obligors, Canadian Imperial Bank of Commerce as Agent and the Lenders named therein, as amended, supplemented, restated or replaced from time to time (the "Credit Agreement"). All capitalized terms used in this certificate and defined in the Credit Agreement have the meanings defined in the Credit Agreement. This Compliance Certificate relates to the Borrower's fiscal [quarter/year] ended ■ (the "[Quarter/Year] End").
1. The Borrower hereby certifies that:
(a) the representations and warranties made in Section 7.1 of the Credit Agreement and each of the other Loan Documents, other than those expressly stated to be made as of a specific date, were true and correct on the [Quarter/Year] End and are true on and as of the date hereof with the same effect as if such representations and warranties had been made on and as of the [Quarter/Year] End and date hereof;
(b) no Default or Event of Default had occurred and was continuing as of the [Quarter/Year] End; and
S-2
(c) no Default or Event of Default has occurred and is continuing on the date hereof [or as the case may be].
2. The Borrower hereby certifies that, as of the [Quarter/Year] End:
(a) the Senior Secured Debt to EBITDA Ratio was ■:■;
(b) the Interest Coverage Ratio was ■:■; and
(c) the Total Net Debt to EBITDA Ratio was ■:■.
3. The Borrower hereby certifies that during the fiscal [quarter/year] immediately preceding the [Quarter/Year] End, the maximum aggregate balance of the U.S. Bank Interest Payment Accounts was ■ and the balance as at the [Quarter/Year End] was $■.
4. Appendix A attached sets out the calculations referred to in item 2 above.
5. Appendix B attached sets out a complete, detailed and accurate list of all Equity Interests or other securities owned or held by any Hudbay Group Member in any Person who is not a Subsidiary of such Hudbay Group Member as at the as at [Quarterly/Year] End.
6. Except as disclosed pursuant to Sections 8.3(b)(i)(L), 8.3(b)(i)(N), 8.3(b)(i)(P) and 8.3(b)(i)(R) of the Credit Agreement or as disclosed in writing to the Agent in connection with the delivery of this Compliance Certificate no mining claims, real property, interest in mining claims or interest in mining claims or real property (including any Mine Properties, Owned Real Property, Leased Real Property, Mining Leases, Mining Rights and Mining Title) has been acquired by any Hudbay Group Member in Peru since the date of the most recently delivered Compliance Certificate and except as disclosed in writing to the Agent no such mining claim, real property, interest in mining claims or interest in real property (including any Mine Properties, Owned Real Property, Leased Real Property, Mining Leases, Mining Rights and Mining Title) is or could reasonably be expected to be material to: (a) the operation of the Constancia Mine, (b) the operation of the Borrower or (c) the Hudbay Group's business, affairs, property, liabilities or financial condition in Peru.
DATED _________________, 20___.
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HUDBAY PERU S.A.C.
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By |
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Name: |
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Title: |
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Name: |
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Title: |
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Appendix B
SCHEDULE 8.2(n)
BANK ACCOUNTS
1. [REDACTED - COMMERCIALLY SENSITIVE INFORMATION]
2. [REDACTED - COMMERCIALLY SENSITIVE INFORMATION]