Hudbay Minerals Inc. (HBM) Earnings Call Transcript & Summary

Good afternoon, and welcome to the 2024 Annual Special Meeting of Shareholders of Hudbay Minerals Inc. My name is Stephen Lang, and I am Chair of the Board of Directors of Hudbay. I would like to welcome all of the shareholders, employees and other stakeholders who are attending our virtual shareholder meeting today via live webcast. This virtual shareholders' meeting will follow the same form as recent years. Please note, there may be slight delays when different speakers begin or when we respond to questions. Before beginning the formal business of the meeting, I would like to briefly reflect on some of Hudbay's achievements in 2023, which was another pivotal year for the company. We delivered strong operational and financial results from our existing authorizations and Hudbay -- and positioned Hudbay for long-term growth and stability through the acquisition of Copper Mountain in June of '23 and the completion of a promising prefeasibility study for Copper World in September of '23. The Copper Mountain Mine is a significant addition to our operating portfolio of assets and Copper World is a very attractive development opportunity that has to further enhance our operating platform. In Manitoba, we continue to advance significant improvement initiatives at a lower mine and our new stall -- at our stall in new Britannia mills and made progress on the Flin Flon tailings reprocessing opportunity. We also met our annual production and cost guidance in Manitoba for the year while achieving record gold production in the fourth quarter. In Peru, we were able to overcome a challenging start to the year following a change in political leadership by keeping Constancia in operation and delivering full year production cost results that met our guidance. We also achieved a major milestone in our greenhouse gas emission reductions by reaching a 10-year renewable agreement supply in Peru, which will come into effect in 2026. These are only a few of the examples of our accomplishments in 2023, and none of these would have been possible without the dedicated efforts of our employees. I thank all of our employees for their effort. I would especially like to welcome and thank our new employees in British Columbia that have joined the Hudbay family in recent months after the completion of the Copper Mountain acquisition. On behalf of the rest of the Board and management, I would also like to thank Sarah Kavanagh and Daniel Muñiz Quintanilla for their years of dedicated service and contribution to Hudbay. On recommendation of our Governance and Nominating Committee, we determined it would be in the best interest of the company to reduce the size of the Board at this time, and both Sarah and Daniel indicated they were willing to not stand for reelection. We wish them both the very best. Now let me introduce the other members of the Hudbay Board who, in addition to myself, are nominated for election at today's meeting. Peter Kukielski, our President and Chief Operating Officer; Carol Banducci, Igor Gonzales, Jeane Hull, Carin Knickel, George Lafond, Colin Osborne, Paula Rogers and Dave Smith. Also with this is Mark Haber, our Executive Director of Legal and Corporate Secretary, who will act as Secretary of the meeting. We will now start the formal process of the meeting, which we will try to complete as expeditiously as possible. I have asked certain shareholders to move and second the proposals we have on the agenda. After all of the motions have been team, we will open the floor to discussion and questions on the motion. If a shareholder, a registered shareholder or a proxy holder with a control number as a question related to one of the matters to be considered, I'd ask to type it into the questions interface on Lumi. Mark will then raise these questions during the discussion period, and we will respond. The only questions that will be permitted prior to the discussion period will be those related to procedural matters. If you are not a shareholder or proxy holder with a control number and would like to ask the Board of Directors a question, applicable e-mail and mailing instructions are included in our management information circular for this meeting. As mentioned in our management information circular, only registered shareholders and proxy holders who have registered for a control number are able to vote at this meeting. Voting will be open on all resolutions at the same time. This will allow you to vote on the resolutions immediately or wait until the discussion concludes on each resolution prior to casting your vote. Should you so choose, you will be able to change your vote on any resolution until voting is closed at the end of the formal meeting. Once the voting has closed, we'll take a few minutes to tabulate the preliminary report. During this time, Peter Kukielski will make a brief presentation, and we'll address any questions related to the presentation after the conclusion of the formal process. I will now call the meeting to order. I will act as Chair of the meeting. I will ask Mark to act as Secretary and Christopher de Lima of TSX Trust to act as a scrutineer. This year, Hudbay has continued to use notice and access by shareholders with access to the materials for our annual and special meeting. Mark has advised me that the notice and access notice and formal proxy has been forward to each registered shareholder and intermediate of record -- as of the record date for the meeting. Notice and access is environmentally friendly and cost effective way to provide shareholders with electronic access to the management information circular and all other proxy-related materials instead of mailing paper copies. All of the proxy-related materials are available electronically on our website -- on the website of TSX Trust company and under our issuer profile on SEDAR and EDGAR. Links to these materials are also available on Lumi's homepage for this meeting. In addition, shareholders may obtain paper copies for the proxy-related materials by contacting our transfer agent, TSX Trust according to the note instructions and the access and notice. Mark has advised me that he has been provided with the scrutineer's report that shows there are approximately 373 shareholders represented mean or by proxy, holding in aggregate 222,034,348 common shares representing approximately 60.3% of the outstanding shares. Accordingly, this meeting is duly called and properly constituted. I would ask Mark to attach the affidavit of the mailing, copies of the meeting material and scrutineers' report to the meeting. Are you not planning to read the minutes of last year's meeting. Any shareholder who would like to review those should contact Mark after the meeting. It can be reached by e-mail at legal@hutbayminerals.com. The first item on our agenda is the presentation of the financial statements of Hudbay for the year ended December 31, 2023, along with the related auditor's report. These were made available to shareholders through notice and access. Links to these materials are also available on the Lumi homepage for this meeting. These documents have been tabled and no further action is required. We will now proceed with our next item of business, the election of directors. Voting through the Lumi web portal is now open for all resolutions. I would like to remind you that you will be able to change your vote until voting closes. We will give you notice before this occurs. In addition to myself, proposed nominees for election as directors of Hudbay are Peter Kukielski, Carol Banducci, Igor Gonzales, Jeane Hull, Carin Knickel, George Lafond, Colin Osborne, Paula Rogers and Dave Smith. If elected, we expect these nominees will hold office until the next annual shareholder -- meeting of shareholders or until their successors are duly elected or appointed. In light of our advanced notice bylaw, I hereby declare the nominations closed. In line with our corporate governance guidelines in the Canadian Business Corporation Act, we intend to apply the CBCA rule concerning majority voting on an individual basis or the nominees in today's election of directors. However, I'm advised based on the proxies to date, each proposed nominees would receive greater number of 4 votes or his or her election then would be against for his or her election. And none of the proposed nominees would be required to tender his or her resignation under the CBCA majority voting requirement. So unless a proxy holder requests separate motions to elect the individuals and nominees, I propose and we proceed with a single motion. May I have a motion for the election of the 10 individuals nominated as directors.

I move to elect each of the 10 nominees as directors of Hudbay on the basis proposed.

I second the motion.

Thank you. Voting on this resolution is now open via Lumi for all shareholders and proxy holders registered to vote. [Voting]

The next item is the appointment of the auditor and the authorization of the Board of Directors upon the recommendation of the Audit Committee to fix the auditor's remuneration. It is proposed that Deloitte LLP be reappointed as the auditor of Hudbay until the next Annual Meeting of Shareholders or until its successor is duly appointed and the Board of Directors upon the recommendation of the audit and that be authorized affect their remuneration. May I have a motion on this matter, please?

I move that Deloitte LLP be reappointed as the auditor of Hudbay on the basis proposed.

I second the motion.

Thank you. In order to be approved, the motion must be passed by a majority of the votes cast. As mentioned before, voting on this resolution is open via Lumi for all shareholders and proxy holders registered to vote. [Voting]

The final item of business is to consider and have thought advisable to pass a nonbinding advisory resolution on executive compensation. The text of the resolution is set out in the management information search. May I have a motion on this matter, please?

I move that the nonbinding advisory resolution accepting Hudbay's approach to executive compensation be approved.

I second the motion.

Thank you. In order to be approved, the motion must be passed by a majority of the votes cast. As mentioned before, voting on this resolution is open via Lumi for all shareholders and proxy holders registered to vote. [Voting]

Is there any other formal business that maybe brought before the meeting?