Rosemont, located in Arizona, is one of the world’s best undeveloped copper projects. Rosemont is expected to produce approximately 127,000 tonnes of copper annually over the first 10 years of operations.

Hudbay Minerals Inc. announced that its Board of Directors has approved an early works program at its Rosemont project, and provided its annual mineral reserve and resource update.

"We are pleased to be moving forward at Rosemont and look forward to carrying out the early works in parallel with financing activities for the project," said Alan Hair, Hudbay's president and chief executive officer. "We continue to drive momentum across our business with the Lalor mine's successful ramp up to 4,500 tonnes per day, extending 777's mine life into 2022 and moving Rosemont forward in a prudent manner."

Rosemont Project

The permitting process at Rosemont concluded with the receipt of the Section 404 Water Permit from the U.S. Army Corps of Engineers and the Mine Plan of Operations from the U.S. Forest Service in March 2019. Hudbay is now in a position to move the project forward with development.

The permitting process at Rosemont concluded with the receipt of the Section 404 Water Permit from the U.S. Army Corps of Engineers and the Mine Plan of Operations from the U.S. Forest Service in March 2019.

Hudbay's agreement to acquire United Copper & Moly LLC's 7.95 percent interest in Rosemont provides Hudbay with greater strategic flexibility with respect to capital structure and project financing alternatives. Hudbay intends to evaluate a variety of options, including the addition of a new, committed joint venture partner for the development of Rosemont. The company expects to carry out this process in parallel with advancing the initial development of Rosemont, with the objective to ultimately hold an approximate 70 percent interest in the project while maintaining operatorship.

As part of the initial development plans, Hudbay's Board has approved an early works program with spending of $122 million over and above the $20 million of Rosemont spending previously included in 2019 growth capital expenditure guidance. The early works program will be funded from cash on hand of $515 million as at Dec. 31, 2018.

The $122 million early works program is part of Rosemont's total project capital cost estimate of $1,921 million as disclosed in the National Instrument 43-101 technical report dated March 30, 2017 ("2017 Technical Report") for Rosemont and will fund the following activities:

• Funding the construction of a water pipeline and power transmission line to site, which are critical long-lead items that are necessary to initiate heavy civil works at site.
• Advancing critical path engineering and geotechnical work to support long-lead procurement and de-risk the project schedule and cost estimate.
• Archaeological site work to prepare key areas for construction.
• Spending on permit-related mitigation activities and owner's costs.

Hudbay plans to move ahead with early works and financing activities in parallel in 2019 and expects to seek Board approval to commence the construction of Rosemont by the end of the year; this would enable first production by the end of 2022.

Rosemont, located in Arizona, is one of the world's best undeveloped copper projects. Rosemont is expected to produce approximately 127,000 tonnes of copper annually over the first 10 years of operations.

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