Hudbay Minerals Inc.

RECENT DEVELOPMENTS

Continued Free Cash Flow Generation Driving Further Debt Reduction and Significant Financial Flexibility

Hudbay has delivered several quarters of meaningful free cash flow generation as a result of steady operating performance, expanding margins from strong copper and gold exposure and a focus on cost control across the business. This has resulted in Hudbay achieving record annual adjusted EBITDA of $1,060.9 million and record annual free cash flow of $387.9 million in 2025.

As a result of the strong operating and financial performance, Hudbay continued its prudent balance sheet management and further reduced overall debt levels in the fourth quarter of 2025, resulting in a total of $102.5 million in debt repayments during the full year 2025. These deleveraging efforts have reduced total principal debt to $1,008.6 million as of December 31, 2025.

As of December 31, 2025, Hudbay had approximately $569 million in cash and cash equivalents, resulting in a reduction in net debt to $439.7 million compared to $525.7 million at December 31, 2024. Similarly, Hudbay reduced its net debt to adjusted EBITDA ratio to 0.4x at the end of the fourth quarter of 2025, a further improvement from 0.6x at the end of fourth quarter of 2024.

After giving effect to the closing of the Copper World joint venture transaction, as described below, Hudbay's post-closing adjusted cash and cash equivalents as at December 31, 2025 was approximately $992 million 3. In addition, Hudbay had undrawn availability of $425 million under Hudbay's revolving credit facilities as of December 31, 2025, increasing total post-closing adjusted liquidity to over $1.4 billion 3. Hudbay is well-positioned to advance Copper World and fund its several other high-return growth opportunities across the business.

Prudently Advancing Copper World Towards a Sanction Decision in 2026

In January 2026, Hudbay announced the closing of the joint venture transaction ("JV Transaction") with Mitsubishi, securing a premier, long-term strategic partner for the development of Copper World. The Company continues to progress the detailed engineering work to de-risk Copper World ahead of a sanction decision later this year.

• Realized Accretive JV Transaction - On January 12, 2026, Hudbay announced the closing of the highly accretive $600 million JV Transaction, which represents a significant de-risking milestone in advancing Copper World and further validates the premium long-term value of this world-class asset. The $420 million of proceeds received at closing from Mitsubishi will be used to directly fund the remaining definitive feasibility study ("DFS") costs and pre-sanctioning costs in addition to the initial project development costs for Copper World. Mitsubishi will contribute an additional $180 million within 18 months of closing to complete its 30% minority investment and will also fund its pro-rata 30% share of future equity capital contributions. The JV Transaction increases the project IRR to Hudbay to approximately 90% based on pre-feasibility study ("PFS") estimates 2.

• Secured Premier Strategic Joint Venture Partner** **- Mitsubishi is one of the largest Japanese trading houses with a global mining presence and a significant U.S.-based business. Mitsubishi is the partner of choice with investments in a world-class portfolio of large and high-quality copper assets, including five of the top twenty copper mines globally by 2024 production. This partnership validates the attractive long-term value of Copper World as a world-class copper asset and endorses the strong technical capabilities of Hudbay. It also represents the beginning of a long-term strategic partnership, and the parties are identifying other opportunities for collaboration to advance their respective copper growth strategies.

• Achieved Key Elements of Hudbay's Three Prerequisites (3-P) Plan - Hudbay has achieved the final key elements of its prudent 3-P financial strategy for the development of Copper World with the closing of the JV Transaction and the achievement of stated balance sheet targets. After accounting for proceeds from the JV Transaction, Hudbay has post-closing adjusted cash and cash equivalents of $992 million 3 and reduced its post-closing net debt to adjusted EBITDA ratio to 0.0x, far exceeding the stated balance sheet targets. The Mitsubishi initial investment and its future pro-rata equity capital contributions, together with the Wheaton Precious Metals Corp. stream, provide significant financial flexibility by reducing Hudbay's estimated share of the remaining capital contributions to approximately $200 million based on PFS estimates and deferring Hudbay's first capital contribution to 2028 at the earliest.

• *Feasibility Study and Detailed Engineering Underway *- Feasibility activities for Copper World are well underway with expected completion of the DFS in mid-2026. Hudbay has continued to execute detailed engineering work and other de-risking activities, in preparation for a Copper World sanctioning decision expected in 2026.

Manitoba Exploration Update

Large Exploration Drill Program Continues in Snow Lake

Hudbay continues to execute the largest exploration program in Snow Lake in the Company's history through extensive geophysical surveying and multi-phased drilling campaigns as part of Hudbay's threefold exploration strategy:

• Near-mine Exploration at Lalor and 1901 to Further Increase Near-term Production and Extend Mine Life- Hudbay completed the development of the initial exploration drift at the 1901 deposit in 2025 and the development of the haulage drift is underway. Hudbay received positive initial step-out drilling results from the exploration drift, and during the second half of 2025, some zinc development ore was delivered for processing at Stall. Activities at 1901 over the next two years will focus on exploration, definition drilling, orebody access, and establishing critical infrastructure for full production in late 2027. Exploration activities at 1901 will target additional step-out drilling to potentially extend the orebody and infill drilling to convert inferred mineral resources in the gold lenses to mineral reserves.

• Testing Regional Satellite Deposits to Utilize Available Processing Capacity and Increase Production - Hudbay increased its regional land package by more than 250% in 2023 through the acquisition of Rockcliff Metals Corp. ("Rockcliff"), which included the addition of several known deposits located within trucking distance of the Snow Lake processing infrastructure. The deposits acquired as part of the Rockcliff acquisition, together with several deposits already owned by Hudbay in Snow Lake, have created an attractive portfolio of regional deposits in Snow Lake, including the Talbot, New Britannia, Rail, Pen II, Watts, 3 Zone and WIM deposits. The continued strong performance from the New Britannia mill has freed up processing capacity at the Stall mill, where there is approximately 1,500 tonnes per day of available capacity which could be utilized by the regional satellite deposits to increase production and extend the life of the Snow Lake operations beyond 2037.

• Exploring Large Land Package for a New Anchor Deposit to Significantly Extend Mine Life- A majority of the land claims acquired as part of the Rockcliff acquisition have been untested by modern deep geophysics, which was the discovery method for the Lalor deposit. A large geophysics program is currently underway consisting of surface electromagnetic surveys using cutting edge techniques that enable the team to detect targets at depths of almost 1,000 metres below surface. The planned geophysics program is the largest geophysics program in Hudbay's history and includes 800 kilometres of ground electromagnetic surveys and an extensive airborne geophysics survey.

Talbot Initial Drilling Results Confirm Resource Expansion Potential

Talbot is a copper-zinc-gold rich VMS deposit located within trucking distance to existing processing infrastructure in Snow Lake. Successful drilling campaigns could expand the resource base and support a PFS to upgrade the mineral resources to reserves, extending the overall mine life of the Snow Lake operations. In April 2025, Hudbay announced the signing of the exploration agreement with the Mosakahiken Cree Nation on exploration activities in their traditional and ancestral territory, including at Talbot.

In July 2025, Hudbay commenced an extensive summer drill program at Talbot focused on expanding the known mineralization at depth, testing geophysical targets as well as conducting an infill drill program in the upper part of the ore body to support a PFS. As part of the initial drilling program in 2025, Hudbay drilled six holes to test the continuity of the Talbot deposit at depth, with all the holes yielding positive results and four of them returning mineralized intercepts with economic potential (see table of intercepts below). The 2026 drilling program has now commenced with six drill rigs deployed, including one drill rig focused on continuing to expand the footprint of the deposit at depth. In addition to the intercepts below, another hole provided a significant intercept of copper mineralization over an estimated length of 19.7 metres from core logging and for which assay results are pending.

1. True widths are estimated based on drill angle and intercept geometry of mineralization.

2 All copper, gold, silver and zinc values are uncut.

3 Copper-equivalent ("CuEq") grade calculated using the following long-term commodity price assumptions: $4.40 per pound copper, $2,800 per ounce gold, $32.00 per ounce silver and $1.25 per pound zinc.

4 Using the combined recoveries of New Britannia and Stall mills of 89% copper, 89% gold, 81% silver and 84% zinc.

In 2026, the Company plans on progressing a PFS and preparing an updated mineral resource estimate for Talbot using Hudbay standard methods that have demonstrated high reserve conversion rates.

Expanded Flin Flon Exploration Partnership with Marubeni and JOGMEC

On January 22, 2026, the Company announced the signing of an amended and restated option agreement with Japan Organization for Metals and Energy Security ("JOGMEC") and Marubeni Corporation ("Marubeni"), where Hudbay granted JOGMEC an option to acquire a 10% interest in three projects located within trucking distance of Hudbay's processing facilities in Flin Flon, Manitoba.*** ***In order to exercise its option, JOGMEC is required to fund at least C$6 million in exploration expenditures over a period of approximately three years, with Hudbay acting as the operator carrying out the exploration activities. The agreement is an amendment and restatement of the option agreement with Marubeni from March 2024, pursuant to which Marubeni's wholly-owned Canadian subsidiary was granted an option to acquire a 20% interest in the three projects, provided it, funds at least C$12 million in exploration expenditures over the designated earn-in period, which is inclusive of past contributions made by Marubeni since March 2024.

The option agreement focuses on three projects in the Flin Flon region, namely Cuprus-White Lake, Westarm and North Star, which were selected by Marubeni prior to the original March 2024 agreement and following a period of detailed due diligence. All three properties hold past producing mines that generated meaningful production with attractive grades of both base metals and precious metals. The properties remain highly prospective with potential for further discovery based on the attractive geological setting, limited historical deep drilling and promising geochemical and geophysical targets. Cuprus-White Lake, Westarm and North Star are all within 20 kilometres of Hudbay's Flin Flon milling complex.

Senior Management Team Appointments

In January 2026, Hudbay appointed Audra Walsh to the role of Vice President, South America Business Unit. Ms.Walsh joined Hudbay as acting Vice President in Peru in August 2025 and has transitioned to the permanent role as a testament to her exceptional talent as a professional engineer with over 30 years of technical, operating, management, executive and board experience in the mining industry. As leader of the South America Business Unit, Ms. Walsh is responsible for the strategic performance of Hudbay's operational and exploration activities in Peru and exploration activities in Chile.

Ms. Walsh's leadership experience and deep expertise will be instrumental in helping Hudbay achieve regional milestones and drive growth in Peru with the long-life operations at Constancia, the future development of Caballito and Maria Reyna and further regional exploration.

Holistic Capital Allocation Framework to Deliver Growth and Maximize Long-Term Risk-Adjusted Returns

Hudbay has a proven track record of prudently allocating capital to high-return brownfield investments, such as the New Britannia gold mill refurbishment project and the development of the high-grade Pampacancha satellite deposit, which have delivered significant free cash flows and contributed to Company's deleveraging efforts.

Hudbay has completed a financial transformation over the past three years. The Company has moved from being overleveraged and capital constrained to a preferred position where it can strategically allocate capital across the portfolio to maximize value and generate the highest risk-adjusted returns, creating long-term sustainable value for stakeholders.

Prudent strategic financial planning and execution of the Company's 3-P plan has achieved the Company's balance sheet deleveraging goals and has lowered its cost of capital. With its strongest balance sheet in more than a decade and peer-leading credit metrics, together with the strategic investment by Mitsubishi, Hudbay is very well positioned to sanction the Copper World project and embark on generational investments in the Company's operating portfolio in 2026. These generational investments include allocating capital to high-return brownfield projects at the Company's three operating mines and advance its world-class development and exploration pipeline.

To provide transparency and continued financial discipline, Hudbay has implemented an enhanced Capital Allocation Framework to provide a holistic approach around capital allocation decisions, including with respect to the deployment of capital into the business through near-term brownfield projects, longer-term greenfield projects, strategic investments and exploration, while considering debt repurchases, share buybacks and dividends.

Hudbay's holistic Capital Allocation Framework is embedded into the Company's annual financial planning cycle and includes the following key elements:

• Preserving Balance Sheet Strength- Aligning with successful deleveraging efforts to maintaining net debt to adjusted EBITDA ratios of less than 1.0x throughout the investment and development cycle, continuing to lower the Company's cost of capital and considering unique (non-dilutive) sources of project funding available.

• Strategic Fit for Growth and Diversification - Expanding and optimizing production and mine life from the existing asset base, enhancing Hudbay's strategic commodity exposure to copper and complementary gold, targeting 400,000 tonnes of annual copper-equivalent production, increasing long-term portfolio diversification across tier-1 jurisdictions and aligning with the Company's sustainability goals.

• Accretive Across Key Financial Metrics- Pursuing investment opportunities that are accretive to a mix of key financial performance metrics - Hudbay's net present value per share, copper-equivalent mineral resources per share, return on invested capital and cash flow yields, as well as demonstrating robust internal rate of returns and project paybacks to maximize value and long-term sustainable returns for all stakeholders.

• Rigorous Risk Assessment- Considering risk-adjusted returns based on project-specific characteristics, applying varying discount rates, commodity price scenarios and sensitivity analysis, as well as key qualitative risk considerations.

• Accountable Investment Governance- Integrating detailed project reviews as part of the annual budgeting process and executing investment decisions subject to a formal internal tollgate process, requiring Executive Committee and Board approval, followed by comprehensive post-project reviews to drive continuous improvement.

Increased Annual Dividend

Following Hudbay's recent financial transformation and consistent with its Capital Allocation Framework, the Company has commenced an increase in shareholder returns in the form of a quarterly dividend. Hudbay's Board of Directors approved the introduction of a new quarterly dividend of C$0.01 per share as the Company has achieved certain financial milestones ahead of schedule and has significantly improved its financial position. The new total annual dividend amount of C$0.04 per share represents an increase of 100% or C$0.02 per share over the previous annual dividend, which was paid semi-annually, representing the first dividend increase in the Company's history.

A quarterly dividend of C$0.01 per share was declared on February 19, 2026. The dividend will be paid out on March 27, 2026 to shareholders of record as of close of business on March 10, 2026.

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

2 Based on the initial capital investment and the $3.75 per pound copper price used in the PFS published on September 8, 2023 with assumptions of approximately $145 million for pre-sanctioning costs, $230 million from the precious metals stream, $350 million from project-level financing and approximately $700 million from Mitsubishi's $420 million initial investment, $180 million investment within 18 months and its pro-rata 30% share of future equity capital contributions.

3 The post-closing adjusted year-end cash and cash equivalents includes approximately $420 million of cash at the Copper World LLC level, including close adjustments received as part of the recent closing of the Copper World joint venture transaction, which is designated for exclusive use by the Copper World joint venture.