Hudbay Minerals Inc.

RECENT DEVELOPMENTS

Significant Debt Reduction and Transformed Balance Sheet

We took several prudent measures in 2024 to significantly improve the strength of our balance sheet and improve financial flexibility, including a total of $245 million of combined debt repayments and gold prepayment liability reductions:

• In May 2024, we completed a successful equity offering issuing common shares for gross proceeds of $402.5 million, resulting in net proceeds of $386.2 million after transaction costs.

• Repurchased and retired a total of $82.6 million of senior unsecured notes during the year.

• Repaid $100 million of prior drawdowns under our revolving credit facilities during the year.

• Fully repaid the gold prepay facility, with $62.3 million in gold deliveries in 2024 and the final payment completed in August.

• In November, we proactively extended our senior secured revolving credit facilities by three years from October 2025 to November 2028 and negotiated the flexibility to leave our 4.50% 2026 senior unsecured notes outstanding to maturity as Copper World advances towards a sanctioning decision in accordance with the 3-P plan. The newly extended $450 million revolving credit facilities include an improved pricing grid reflecting the enhanced financial position of Hudbay and feature an opportunity to increase the facility by an additional $150 million at our discretion during the four-year tenor, providing additional financial flexibility.

We have delivered six consecutive quarters of meaningful free cash flow generation as a result of recent brownfield investments, continuous operational improvement efforts and steady cost control across the business. As a result of the continued cash flow generation and our deleveraging efforts, we have substantially reduced our net debt[1] to $525.7 million as of December 31, 2024, as compared to $1,037.7 million at the end of 2023. The net debt reduction, together with higher levels of adjusted EBITDA 1 over the last twelve months, has significantly improved our net debt to adjusted EBITDA ratio 1 to 0.6x compared to 1.6x at the end of 2023.

Copper World Permitting Completed

On January 2, 2025, Hudbay received the Air Quality Permit for the Copper World project from the Arizona Department of Environmental Quality ("ADEQ"). The issuance of this permit is a significant milestone in the advancement of the project as it is the final major permit required for the development and operation of Copper World. Copper World is expected to produce 85,000 tonnes of copper per year over an initial 20-year mine life.

Hudbay has now received all three key state permits required for Copper World development and operation:

• ***Mined Land Reclamation Plan -***Completed - the Mined Land Reclamation Plan was initially approved by the Arizona State Mine Inspector in October 2021 and was subsequently amended and approved to reflect a larger private land project footprint. This approval was challenged in state court, but the challenge was dismissed in May 2023.

• ***Aquifer Protection Permit -***Completed - the Aquifer Protection Permit was received on August 29, 2024 from the ADEQ following a robust process that included detailed analysis by the agency and Hudbay, along with a public comment period that was completed in the second quarter of 2024.

• ***Air Quality Permit -***Completed - the Air Quality Permit was received on January 2, 2025 from the ADEQ following a similarly robust process, including a public comment period that concluded in the third quarter of 2024. An administrative appeal was filed by certain opponents in late January, as expected and the Company is confident the permit will be upheld, similar to the project's other state-level permits .

Hudbay received the Aquifer Protection Permit and Air Quality Permit on schedule after a thorough public consultation process, and the Company is pleased with the level of local support it has received. Hudbay looks forward to providing significant benefits for the community and local economy in Arizona. Once in production, Copper World is expected to be a meaningful copper producer in the U.S. domestic copper supply chain, which will be required to help secure growing U.S. metal demand related to increased manufacturing capacity, infrastructure development, increased energy independence, domestic battery supply chain and strengthening the nation's security.

Now that the major permits for Copper World have been received, Hudbay commenced a minority joint venture partner process early in 2025. It is anticipated that any minority joint venture partner would participate in the funding of definitive feasibility study activities in 2025 as well as in the final project design and construction for Copper World.

The sanctioning of Copper World is not expected until 2026 based on current estimated timelines.

1 Adjusted EBITDA and net debt to adjusted EBITDA ratio are non-GAAP financial performance measures with no standardized definition under IFRS. For further information and a detailed reconciliation, please see discussion under the "Non-GAAP Financial Performance Measures" section of this MD&A

Bolstering Technical Capabilities

As we advance the many brownfield and greenfield growth opportunities within our portfolio, we have enhanced the senior management team with additional technical expertise and expanded the U.S. team to build bench strength and establish key leadership positions.

Hudbay's Senior Vice President of the U.S. Business Unit, Javier Del Rio, has been focusing his time solely on leading the Copper World project, leveraging his project development and operational expertise as the former head of Hudbay's South America Business Unit where he oversaw the development and operation of the Company's flagship Constancia mine in Peru. In addition, Warren Flannery, Hudbay's Vice President of Business Planning and Reclamation, relocated to Arizona in September 2024 to take on the role of Vice President of Copper World. In his new role, Mr. Flannery is leading the operational readiness of Copper World as the company advances through definitive feasibility study activities in 2025.

Adding to the U.S. expertise, in August 2024, Hudbay hired Robert Comer as Executive Director, External Affairs & Legal in Arizona. As an experienced attorney, Mr. Comer brings more than 30 years of U.S. permitting and mining law expertise. During his career, Mr. Comer has held senior leadership positions with businesses and the federal government and has successfully advanced numerous resource projects, including through environmental and land use compliance, defending permits through litigation, NEPA permitting and government relations. He is a significant asset to Copper World as Hudbay continues to advance towards a sanctioning decision in 2026.

After receiving all key permits and with feasibility study activities underway, in February 2025, we added to our U.S. team's project development expertise with the appointment of Kim Hackney as Project Director of Copper World. Mr. Hackney is a project professional with over 40 years of extensive experience in the mining industry having held several roles in project and construction management, including managing owners teams, EPCM projects and self-perform projects. He is recognized in the industry for bringing projects online within budget and on schedule, and his in-depth expertise includes global base and precious metals projects located in North, Central and South America, Canada, Africa, Australia, Indonesia, and Uzbekistan.

Hudbay also appointed John O'Shaughnessy as Vice President, Business Development in February 2025 to provide expert oversight and strategic leadership of the global mine planning process. Mr. O'Shaughnessy has 25 years of mining expertise, including numerous progressive engineering, operational and leadership roles at Vale's mining operations in Ontario and Newfoundland and Labrador. He was most recently the North Atlantic Lead for Vale's Base Metals division where he led and deployed strategic initiatives for the North Atlantic region. His broad technical expertise further augments Hudbay's technical bench strength.

New Britannia Demonstrates Successful Capital Allocation to Maximize Risk-adjusted Returns

Hudbay has a proven track record of prudently allocating capital to generate the highest risk-adjusted returns as we execute our growth strategy and advance our world-class asset portfolio. As an example of this success, we have completed a post-project review of the brownfield investment in the New Britannia mill refurbishment project in 2020 and 2021.

Hudbay acquired the New Britannia mill in 2015 for $12 million as a potential gold processing solution for the high-grade Lalor gold and copper-gold ores by providing additional processing capacity at the Snow Lake operations and allowing us to achieve higher gold recoveries of approximately 90%, compared to 55% at the existing mill. After completing several economic studies, the refurbishment project construction commenced in early 2020 with an initial capital cost of $115 million and an estimated unlevered IRR of 19%. The initial capital investment was funded by a $115 million low-cost gold prepay facility entered into in May 2020. Project construction was completed on time with mill ramp-up and commissioning achieved in the fourth quarter of 2021. The mill was refurbished with a nameplate design capacity of 1,500 tonnes per day, and has been consistently exceeding performance expectations, achieving throughput levels of 1,650 tonnes per day in 2023 and reaching record throughput levels of over 2,000 tonnes per day in 2024. The project payback was achieved after 2.5 years, and in August 2024, the gold prepay facility was fully repaid, which has increased exposure to the current high gold price environment and further improved cash flows. After three years of operations, the unlevered IRR for the New Britannia gold mill refurbishment project has now increased to 36% after adjusting for the higher production rates, stronger gold prices and current capital and operating costs.

Hudbay Celebrates Major Milestone with Millionth Ounce of Gold Recovered from Lalor Mine

At the end of 2024, we surpassed a total of one million ounces of gold produced at our Lalor mine in Snow Lake, Manitoba. This milestone reinforces the significant value Hudbay has unlocked by combining its exploration expertise, processing infrastructure and operating efficiency to maximize gold production at our Snow Lake operations. In 2024, the Snow Lake operations achieved record annual gold production exceeding the top end of the gold production guidance range with 214,225 ounces produced.

With approximately two million ounces of contained gold in current mineral reserve estimates and another 1.4 million ounces of contained gold in inferred mineral resources, Hudbay expects to continue to unlock significant value in Snow Lake and looks forward to further growing the mineral resource base through regional exploration as we continue to execute one of the largest exploration programs in Snow Lake operating history.

Exploration Update

Large Exploration Drill Program Continues in Snow Lake

In 2024, Hudbay completed the largest exploration program in the Company's history with the goal of extending known mineralization near the Lalor deposit to further extend mine life as well as to find a new anchor deposit within trucking distance of the Snow Lake processing infrastructure. The 2024 program included the largest geophysical program in Hudbay's history in Snow Lake, with surface electromagnetic surveys detecting targets at more than 1,000 metres below surface and covering a 25 square-kilometre area including the Cook Lake claims that had been previously untested by modern deep geophysics.

At Lalor Northwest, follow-up drilling in the second half of 2024 confirmed the potential for a new gold-copper discovery located approximately 400 metres from the existing Lalor underground infrastructure. Several new intersections have helped establish the geometry of this new discovery, and we plan to continue to drill Lalor Northwest in 2025.

At the regional Rail property, which was acquired through the Rockcliff acquisition in 2023, the 2024 drill program yielded new intersections of high-grade copper-gold mineralization. These results will be combined with historical drilling results on the property to update the geological model and assess its economic potential.

2024 drilling at the 1901 deposit from the exploration drift targeted down plunge extensions of the ore body. Five step-out holes were drilled beyond the known extent of the mineralization and all five holes have intersected visible copper-gold mineralization. Additional planned drilling at 1901 in 2025 is expected to confirm and potentially extend the orebody geometry and to convert inferred mineral resources in the gold lenses to mineral reserves.

We continue to test a very strong deep geophysical anomaly located at Cook Lake North, approximately six kilometres from Lalor with drilling activities continuing throughout the winter season.

Signed Exploration Agreement with First Nations in Manitoba

In February 2025, Hudbay signed its first-ever exploration agreement with the Kiciwapa Cree Nation, reflecting the Company's commitment to meaningful collaboration as we explore for new mineral resources in the Snow Lake and Flin Flon regions.

Advancing Engineering Work for Flin Flon Tailings Reprocessing

Zinc Plant Tailings - Metallurgical test work continues following positive results from the initial confirmatory drill program completed in 2024 in the section of the tailings facility that was utilized by the zinc plant for 25 years. The results confirmed the grades of precious metals and critical minerals previously estimated from historical zinc plant records. An early economic study to evaluate the opportunity to reprocess the zinc plant tailings has confirmed the potential for a technically viable reprocessing alternative, and further engineering work is underway.

Mill Tailings - We continue to advance metallurgical test work on the opportunity to reprocess Flin Flon mill tailings where 100 million tonnes of tailings were deposited over 90 years. An early economic study on the mill tailings is planned.

Maria Reyna and Caballito Drill Permits Expected in 2025

Hudbay controls a large, contiguous block of mineral rights with the potential to host mineral deposits in close proximity to the Constancia processing facility, including the past producing Caballito property and the highly prospective Maria Reyna property. The Company commenced early exploration activities at Maria Reyna and Caballito after completing a surface rights exploration agreement with the community of Uchucarcco in August 2022. As part of the drill permitting process, environmental impact assessment applications were submitted for the Maria Reyna property in November 2023 and for the Caballito property in April 2024. The environmental impact assessment (EIA) for Maria Reyna was approved by the government in June 2024 and the Caballito EIA was approved in September 2024. This represents one of several steps in the drill permitting process, which is expected to be completed in 2025.

Board Chair Transition

Effective January 1, 2025, Stephen A. Lang stepped down as Chair of Hudbay's Board of Directors due to health reasons. David S. Smith, current independent director, has been appointed Chair of the Board. Mr. Lang, who was appointed Chair in October 2019, will remain on the Board as an independent director. Mr. Smith joined the Board as an independent director in May 2019, bringing nearly 40 years of financial and executive leadership experience in the mining sector. Mr. Smith is a corporate director who has had a career on both the finance and the supply sides of the mining business, with extensive international experience in the acquisition, sale, development, financing and operations of base and precious metal operations.

Dividend Declared

A semi-annual dividend of C$0.01 per share was declared on February 18, 2025. The dividend will be paid out on March 21, 2025 to shareholders of record as of close of business on March 4, 2025.