HudBay Minerals (NYSE:HBM) executives highlighted what they called a “transformative year” in 2025, pointing to record revenue, profitability and free cash flow, continued production guidance execution, and a strengthened balance sheet that they said positions the company to advance its Copper World growth project while increasing shareholder returns.
Record 2025 results and a strong fourth quarter
President and CEO Peter Kukielski said 2025 marked Hudbay’s third consecutive year of record financial performance, delivering record annual revenue of more than $2 billion, adjusted EBITDA of over $1 billion, and free cash flow of more than $380 million. Kukielski noted the company achieved its 11th consecutive year of meeting consolidated copper production guidance and its fifth consecutive year of meeting gold guidance, while also outperforming its “twice improved” consolidated cash cost guidance.
Hudbay reported consolidated cash costs of negative $0.63 per pound and consolidated sustaining cash costs of $0.94 per pound in the quarter, which management attributed primarily to higher copper production and higher gold by-product credits versus the prior quarter.
Cash flow, liquidity, and deleveraging
Operating cash flow before changes in non-cash working capital was $337 million in the fourth quarter, which management said reflected normalized operations following temporary interruptions and higher realized metal prices. Free cash flow was $228 million in the quarter, bringing full-year 2025 free cash flow to $388 million, which the company described as new quarterly and annual record levels.
The company continued to reduce debt, repurchasing and retiring $39 million of senior unsecured notes in the quarter. Management said that since the end of 2024, Hudbay reduced long-term debt by $185 million, ending 2025 with $1.0 billion of total debt. Total liquidity at quarter-end was $994 million, including $569 million in cash and $425 million of undrawn revolver capacity. Net debt to EBITDA improved to 0.4x at year-end.
After closing the Copper World joint venture transaction in early January, management said cash and cash equivalents increased to $992 million, lifting “adjusted” total liquidity to over $1.4 billion and reducing net leverage to 0x.
Operational update: Peru, Manitoba, and British Columbia
Peru (Constancia): Kukielski said Peru exceeded the top end of annual gold guidance and achieved copper guidance despite a temporary operational interruption tied to social unrest. Fourth-quarter production included 25,000 tons of copper, 33,000 ounces of gold, 731,000 ounces of silver, and 325 tons of molybdenum. Management said higher grades from Pampacancha and less low-grade stockpile processing supported results, but Pampacancha was depleted in late December 2025—earlier than previously expected. Peru cash costs were $0.57 per pound in the fourth quarter, down 56% quarter-over-quarter, benefiting from higher gold by-product credits.
Hudbay also discussed elevated precious metals contained in concentrate inventory due to Pampacancha’s contribution, which management said shifted some precious metal sales from December 2025 into 2026. The company said it continues to advance pebble crusher installations intended to increase mill throughput starting in the second half of 2026 and help maintain steady annual copper production despite lower grades following Pampacancha depletion.
Manitoba (Snow Lake): Management said Manitoba copper and silver production met 2025 guidance, but gold and zinc fell below the low end of guidance due to wildfire impacts and an October power outage and subsequent ramp-up. Fourth-quarter production included 47,000 ounces of gold, 3,000 tons of copper, 6,000 tons of zinc, and 214,000 ounces of silver. Hudbay reported a 15% reduction in total recordable injury frequency in 2025.
Operationally, Lalor averaged over 4,200 tons per operating day in the quarter, with a focus on gold zones to feed the New Britannia mill. New Britannia achieved a monthly throughput record in December, averaging roughly 2,300 tons per day. Management said the Stall mill improved gold recovery initiatives and achieved over 70% gold recovery from the base metal ore stream. Full-year gold cash costs were $549 per ounce, a 9% improvement from 2024, which management attributed to prioritizing high-margin gold production over by-product zinc.
British Columbia (Copper Mountain): The company produced 4,700 tons of copper, 4,000 ounces of gold, and 57,000 ounces of silver in the fourth quarter, with lower throughput due to unplanned maintenance on the primary SAG mill. Full-year copper production fell below the low end of guidance, which management said reflected SAG mill maintenance and increased processing of low-grade stockpiled ore. Hudbay said ore mined rose 32% quarter-over-quarter to 2.4 million tons as mining rates improved, and a permanent feeder for the second SAG mill was completed in December.
On the primary SAG mill, management said a feed end head replacement is scheduled for early third quarter 2026, expected to take about a month, with guidance reflecting the downtime. The company said it expects the mill to reach its permitted capacity of 50,000 tons per day in the second half of 2026.
New capital allocation framework and dividend increase
CFO Eugene Lei outlined an “enhanced” capital allocation framework, describing it as embedded in annual planning and designed to weigh growth investments, exploration, strategic investments, balance sheet preservation, and potential shareholder returns including debt repurchases, buybacks, and dividends.
Lei said Hudbay has now executed the financial elements of its “3P plan”—three prerequisites set before sanctioning Copper World—and described the balance sheet as the strongest in more than a decade. As part of the new framework, the company introduced a new quarterly dividend of $0.01 per share, which management said represents an annual increase of 100% compared to a former semi-annual $0.01 dividend, bringing the total annual dividend to $0.04 per share.
2026 outlook: production, costs, and growth projects
Hudbay provided 2026 guidance and strategic objectives centered on operational excellence, free cash flow generation, and funding both brownfield and greenfield growth.
- 2026 consolidated copper production expected to rise 5% to 124,000 tons (midpoint), driven by higher British Columbia production as throughput ramps, partially offset by Pampacancha depletion.
- 2026 consolidated gold production expected to fall 9% to 244,500 ounces due to Pampacancha depletion, though management said “unstreamed” gold production is expected to increase, supported by normalized Manitoba operations.
- Consolidated cash costs guided to negative $0.30 to negative $0.10 per pound of copper; sustaining cash costs guided to $1.70 to $2.10 per pound.
Capital spending plans for 2026 included $435 million of sustaining capital and $140 million of growth capital at operations, excluding Copper World joint venture spending. Copper World growth capital spending was guided at $135 million in 2026, tied to feasibility work and de-risking items. Exploration spending was guided to increase to $60 million, with an emphasis on Snow Lake and New Ingerbelle resource conversion drilling.
On Copper World in Arizona, Kukielski said the Mitsubishi joint venture closes key funding and de-risks future equity contributions. Management stated Mitsubishi provided an initial $420 million cash contribution and is expected to contribute an additional $180 million within 18 months to reach a 30% stake, thereafter funding its pro rata share of capital. Hudbay said the definitive feasibility study is on track for mid-2026, with a sanction decision expected in 2026.
Management also highlighted that Copper Mountain received New Ingerbelle expansion permits, calling it an important step to enhance copper and gold production and extend mine life, and said refreshed participation agreements were finalized with the Upper and Lower Similkameen Indian Bands.
About HudBay Minerals (NYSE:HBM)
HudBay Minerals Inc is a Canada-based mining company engaged in the exploration, development and production of base and precious metals. Its primary products include copper, zinc, gold and silver concentrates, which are sold to smelters and refiners worldwide. The company’s operations span multiple stages of the mining cycle, from resource definition and feasibility studies to mine construction, extraction and reclamation.
The company traces its roots back to 1927, when it was established as Hudson Bay Mining & Smelting Co Limited.
