Hudbay Minerals Inc T.HBM

From the PFS Sept 8

[Swl1896]

Prudent Financing Plan and Disciplined Capital Allocation

As part of Hudbay’s disciplined financial planning approach to Copper World, the company has introduced a three prerequisites plan (“3-P”), including specific leverage targets that it would need to achieve prior to making an investment decision in the project:

1. Permits – receipt of all state level permits required for Phase I
2. Plan – completion of a definitive feasibility study with an internal rate of return of greater than 15%
3. Prudent Financing Strategy – multi-faceted financing strategy including
   • a committed minority joint venture partner;
   • a renegotiated precious metals stream agreement optimized for the current project;
   • net debt to EBITDA ratio of less than 1.2 times;
   • a minimum cash balance of $600 million; and,
   • limited non-recourse project level debt of up to $500 million.