plan in aCtion...Equity attributable to owners of the Company $ 1,635.6 $ 1,653.8 Cash and cash equivalents $ 631.4 $ 1,337.1 Dividend paid per share $ 0.11 $ 0.20 Commodity exposure

Copper 50%

Gold and silver 22%

Zinc 18%

Molybdenum 5%

Lead 5%

18%

2013 annual report

plan in aCtion

● operations● development● exploration

Flin Flon, ManiToba

FlinFlonisourmainoperatingplatform. The 777 mine produces zinc,copper,goldandsilverandhasan expected mine life to 2020. We also own an ore concentrator that produceszincandcopperconcentratesandazincplantthatprocesseszincconcentrateintospecialhigh-gradezincmetal.

REED MinE, ManiToba

The70%-ownedReedcopperminecommenced initial production in September 2013 and is expected to achieve commercial production in the firsthalfof2014.Themineisexpectedtoaddapproximately15,000 tonnesof annual copper production over afive-yearminelife.Itislocated120 kilometresfromFlinFlon,andoreistruckedtotheFlinFlonconcentratorforprocessing.

HuDbay aT a glanCE

Hudbay is a Canadian integrated mining company with operations, development properties and exploration activities principally focused on the discovery, production and marketing of base and precious metals. Our vision is to become a top-tier operator of long-life, low-cost mines in the Americas. Our mission is to create sustainable value through increased commodity exposure on a per share basis by growing long-life deposits, in high-quality and mining-friendly jurisdictions.

Cu produCtion (kt)

Growth1 in Copper, Precious Metals and Zinc Production preCious metals produCtion2

(koz)

zn produCtion (kt)

WITH THRee neW MIneS COMInG onSTReAM,PRodUCTIonACRoSSALLkeyMeTALSISPoISedFoRSIgnIFICAnTgRowThIn2014And2015.

2013 2015E2014E

2015E2013 2014E

(kt)

(koz)

2013E 2014E 2015E

2013 2015E2014E3

2013 2015E2014E3

2013 2015E2014E3

(kt)

0

55

110

165

220

0.000000

36.666667

73.333333

110.000000

146.666667

183.333333

220.000000

0

55

110

165

220

2015E

2014E

2013

Existing Operations4

Lalor5

Constancia6

Reed7

200

217

103

2013 2015E2014E

2015E2013 2014E

(kt)

(koz)

2013E 2014E 2015E

2013 2015E2014E3

2013 2015E2014E3

2013 2015E2014E3

(kt)

0

55

110

165

220

0.000000

36.666667

73.333333

110.000000

146.666667

183.333333

220.000000

0

55

110

165

220

2015E

2014E

2013


Lalor5

Constancia6

Reed7

200

217

103

2013 2015E2014E

2015E2013 2014E

(kt)

(koz)

2013E 2014E 2015E

2013 2015E2014E3

2013 2015E2014E3

2013 2015E2014E3

(kt)

0

55

110

165

220

0.000000

36.666667

73.333333

110.000000

146.666667

183.333333

220.000000

0

55

110

165

220

2015E

2014E

2013


Lalor5

Constancia6

Reed7

200

217

103

2013 2015E2014E

2015E2013 2014E

(kt)

(koz)

2013E 2014E 2015E

2013 2015E2014E3

2013 2015E2014E3

2013 2015E2014E3

(kt)

0

55

110

165

220

0.000000

36.666667

73.333333

110.000000

146.666667

183.333333

220.000000

0

55

110

165

220

2015E

2014E

2013


Lalor5

Constancia6

Reed7

200

217

103

Hu

db

Ay

At

A G

lAn

Ce

➤

➤

laloR MinE, ManiToba

This100%-ownedzinc,goldandcopperdepositisontracktobecomeournextmajorundergroundmine.Firstorewasproducedin2012throughthe ventilation shaft, and production from the main shaft is expected in the second half of 2014. We are refurbishingthenearbySnowLakeconcentratoranddoublingitscapacity.

ConsTanCia PRojECT, PERu

This100%-ownedprojectisexpectedtobealow-cost,openpitminingoperationaveraging82,000tonnesof annualcopperproductionover a22-yearminelife.Theproject,which was over 56% completed at december31,2013,isontrackforinitial production in late 2014 and commercial productioninthesecondquarter of 2015.

1 Representsproductiongrowthfrom2013actualproductionto2015anticipatedproductionlevels. 2 Includesproductionsubjecttostreamingtransactions.Silverisconvertedtogoldataratioof50:1for2014guidance.Forpreciousmetalsproduction,silverisconvertedtogoldusingtheaveragegoldandsilverrealizedsalespricesduringtheperiod. 3 2014 estimated production levels based on midpointof2014productionguidancereleasedonJanuary8,2014. 4 777’s anticipated production for2015isbasedoncontainedmetalinconcentrateasdisclosedin“TechnicalReport777 Mine,FlinFlon, Manitoba, Canada” dated October 15, 2012. 5 Lalor’s anticipated production for 2015 is based oncontainedmetalinconcentrateasdisclosedin“Pre-FeasibilityStudyTechnicalReport,ontheLalordeposit”datedMarch29,2012. 6 Constancia’s anticipated production for 2015 is based on contained metalinconcentrateasdisclosedin“TheConstanciaProject,nationalInstrument43-101TechnicalReport”filedonnovember6,2012. 7 Reed’s anticipated production for 2015 is based on contained metalinconcentrateasdisclosedin“Pre-FeasibilityStudyTechnicalReportontheReedCopperdeposit”datedApril2,2012andincludes100%ofproduction.

operations summary

For the years ended December 31 2013 2012

production1

Copper (000 tonnes) 29.9 39.6 Zinc (000 tonnes) 86.5 80.9 Gold (000 troy ounces) 79.2 86.6 Silver (000 troy ounces) 772.5 824.0

1 Includes 100% of Reed mine production.

FinanCial summary

($ millions)For the years ended December 31 2013 2012

revenue Copper $ 210.4 $ 343.7 Zinc $ 219.1 $ 222.6 Gold $ 99.5 $ 131.8 Silver $ 14.4 $ 21.0 Other $ 5.8 $ 6.3 Less:Treatmentandrefiningcharges(TC/RC) $ (19.9) $ (22.7)less: pre-production revenue $ (12.5) $ (0.1)revenue $ 549.2 $ 725.4Profit (loss) before tax $ (56.0) $ 48.4

Total assets $ 3,844.0 $ 3,476.5Equity attributable to owners of the Company $ 1,635.6 $ 1,653.8Cash and cash equivalents $ 631.4 $ 1,337.1Dividend paid per share $ 0.11 $ 0.20

Commodity exposure

Hudbay reserves and resources as of March 26, 2014. Measured and indicated resources are exclusive of provenandprobablereserves.CommodityexposurecalculatedusingcommoditypricesofUS$1,250/ozAu,US$25.00/ozAg,US$1.00/lbZn,US$3.00/lbCu,US$13.50/lbMoandUS$0.90/lbPb.

2013 summary

Copper 50%

Gold and silver 22%

Zinc 18%

Molybdenum 5%

Lead 5%

50%

22%

18%

5% 5%

Table of Contents letter to Shareholders p02

Management team p20

Corporate Governance p22

Key Financial and Production Results p24

Consolidated Condensed Financial Statements p24

Corporate and Shareholders’ Information p30

FoR THE PasT THREE yEaRs, HuDbay

has exeCuted a Clear and disCiplined

Plan To DRivE gRowTH anD CREaTE

susTainablE valuE FoR sTakEHolDERs.

wE aRE MEETing ouR MilEsTonEs anD

sECuRing ouR FuTuRE as wE gET REaDy

To DElivER THREE nEw MinEs.

2 hUdbAy | 2013AnnUALRePoRT

letter to shareholders

Theseareexcitingtimesforhudbayasthegrowthplanwesetinmotionthree yearsagoisnearingcompletion.Fromanoperatingplatformthatincludes three new mines, we expect togeneratesolidandconsistentreturns for many years to come.

In2010,hudbayembarkedonaplantogrowtheCompanyandcreatelong-termvalueforourshareholders.Recognizingthattwoofourthreeoperatingmineswereabouttoclose,welaidoutafive-yearprogramthatwouldleverageourcompetenciesinexploration and mine development, delivergrowthinkeypersharemetricsand position the Company to sustain valuethroughtheupsanddownsofmetal price cycles.

We believe that the best opportunities for sustainable value creation in miningareinfindingandbuildingnewminesanddevelopingthemin an environmentally and socially responsible manner. We also believe that we have particular expertise involcanogenicmassivesulphide(VMS) and porphyry deposits, in terms of both exploration and mine development.ourstrategyisfocusedonutilizingthisexpertisetocreatelong-termvalueforourshareholders.

Thekeyelementsofourplanareto:

• AcquireVMSandporphyryexploration and development properties that are located in mining-friendlyjurisdictionsintheAmericasandhaveexplorationupside potential;

• Findandexpandmineraldepositsthroughexplorationandbringtheminto production; and

• optimizethevalueofproducingassetsthroughsafeandefficientoperations.

Progress Against Planwehavecoveredalotofgroundsinceembarkingonourplaninmid-2010.withinthefirstfewmonths,wemadea commitment to advance the Lalor project to full production. The next year, we acquired the Constancia copper project and, shortly thereafter, increaseditsvaluethroughthediscoveryofthenearbyPampacanchadeposit.wealsomadeago-aheaddecisionontheReedmine,electingtobringthishigh-gradecopper

PRoDuCTion aCRoss all kEy METals

is ExPECTED To inCREasE wiTH a

Full year oF operations at reed

and initial output From the

CoMPlETED PRoDuCTion sHaFT aT

laloR as wEll as ConsTanCia.

hUdbAy | 2013AnnUALRePoRT 3

oUR2013CoRPoRATeSoCIAL ReSPonSIbILITyRePoRTISnowonLIneAT www.hUdbAyMIneRALS.CoM/CSRRePoRT

deposit into production. In 2012, ourboardcommittedtodevelopingConstancia,ourlargestprojectandone that will ultimately transform the Company. With these three new mines, and continued operation of the 777 mine, we expect to increase copper production by 570% from 2013 to 2015. Importantly, 777, Lalor andConstanciaarealllarge,low-costoperations that should reduce our overallcoststructureandgeneratevaluethroughtheupsanddownsofprice cycles.

Tofinanceourplan,weraisedalmostUS$1.8billionfromnon-equitysources,therebyenablingourshareholdersto participate fully in the Company’s growth.ThisincludedUS$885millionin two precious metals stream transactions with Silver Wheaton, US$750 millioninlong-termbondfinancingandanequipmentfinancingfacility with Caterpillar Financial tofunduptoUS$130millionofConstancia’smobilefleet.Allthreeprojectsarenowfullyfundedthroughto completion. In early 2014, we announced an equity issue to provide additionalfinancialflexibilitytopursueopportunitiestorestockourgrowth pipeline.

Meeting the Challengesourteamsmadeexcellentprogressin2013,withallprojectsremainingontracktoreachcommercialproductionwithin the next two years. However, progressdidnotcomewithoutchallenges.AtConstancia,weincurreda15%capitalcostincreaselargelyduetoadditionalcivilearthworksspendingrequirements.Inadditiontoaddressingtheissueattheproject,weimplementedspendingcutsanddeferrals of almost $100 million across the Company, which included makingreductionsinexploration,deferringdiscretionarysustainingcapitalexpendituresandloweringthesemi-annualdividendto$0.01pershare. We also deferred approximately $325 millionforthenewLalorconcentrator,choosinginsteadtoinvest $9 million to double the capacity oftheSnowLakeconcentratortoaccommodate Lalor production until the end of 2016.

Positioned for GrowthIn2014,wewillbegintoseethefruits ofourlabour.Productionacrossallkeymetalsisexpectedtoincrease with a full year of operations at Reed and initial output from thecompleted productionshaftat Lalor as well as Constancia. In 2015,growthisexpectedtobeevenmore pronounced.

Asweneartheendofourfive-yearplan,andstarttotacklethenextphaseofhudbay’sgrowth,wearebuoyed by our success to date. I would liketothankourboardofdirectorsfortheirguidanceandsupport,andour shareholders for their continued confidenceinhudbay.Ialsowanttothankouremployeesandcontractors,whohavejoinedtogetherinanincredibledisplayoftalent,ingenuityandcommitmenttomeetourgoalsand pursue our vision. The future of hudbayispromising.

Sincerely,

DaviD GarofaloPReSIdenTAndChIeFexeCUTIVeoFFICeR


Acquiring early-stage projects that meet our strategic criteria

1


4

3

2

1

wE sEEk ouT PRoPERTiEs wiTHin a naRRow gEogRaPHiC anD

gEologiCal RangE wHERE wE Can aDD valuE.

1 MaNiToBa 777, LALOR, REED

2 ColoMBia EXPLORATION

3 PErU CONSTANCIA

4 CHilE EXPLORATION


Acquisition CriteriaAcquisitionsprovideacompellingopportunitytoaccelerategrowth.Toensurethey create sustainable shareholder value, we adhere to strict criteria for evaluatingprospectiveproperties.

wefocusgeographicallyonmining-friendly,investment-gradecountriesintheAmericas,andgeologicallyonVMSandporphyrymineraldepositswherewecanleverageourexperienceinexploringanddevelopingthesetypesofdeposits.

The property must have exploration upside potential. We believe that the marketsforminingassetsfullyvaluedelineatedreservesandresources,butmayundervaluethepotentialofprospectiveproperties–givingusanopportunitytocreatevaluethroughexploration.

weseekoutearly-stageprojectswherewecanaddvaluebyapplyingourtechnicalexpertiseorprovidingfinancing.Inourview,large,transformationalacquisitionscanberiskyandpotentiallyvalue-destructive.

Acquisitionsshouldbeaccretivetohudbayonapersharebasis.becauseofourfocusonnon-producingassetsatvariousstagesofdevelopment,weconsidermeasures such as net asset value per share and the contained value of reserves andresourcespersharewhenevaluatingaccretion.kEN Gillis

SenIoRVICePReSIdenT,CoRPoRATedeVeLoPMenT

wiTH THE ExPECTED

Completion oF the lalor

and ConstanCia mines

in THE nExT 12 MonTHs,

wE’RE FoCusED on

aDDing PRoPERTiEs

that Can utilize the

teChniCal and FinanCial

CaPaCiTy THaT will

bECoME availablE

sTaRTing in 2015.

weTARgeTPRoPeRTIeSInJURISdICTIonSThATAReSUPPoRTIVeoFReSPonSIbLeMInedeVeLoPMenTAndoPeRATIon.


Constancia: A Strategic Fitour2011acquisitionoftheadvanced-stageConstanciacopperprojectinPerumetallofouracquisitioncriteria.Purchasedatapriceofapproximately19.8millionhudbaysharesand$117millionincash,thelarge-scaleporphyrydepositlocatedinanestablishedmining-friendlyjurisdictionwasjusttherightsizeandscalefor hudbay.

notonlyhavewebroughtthefinancialcapacityandmine-buildingexpertiseneededtoaccelerateprojectdevelopment,wehavealsocreatedvaluethroughexploration.ShortlyafteracquiringConstancia,wediscoveredthehigher-gradePampacanchadeposit,adding43milliontonneswithacopperequivalentgradeof 0.77% to the mineral reserve base.

Followingsubstantialcompletionofthedetailedengineeringin2013,hudbay’sboardapprovedarevisedcapitalcostestimatefortheConstanciaprojectofUS$1.7billion.Theprojectisontrackforcommercialproductionbymid-2015.Itincludesanopen-pitmineandan80,000 tonne-per-dayprocessingplant.Allkeypermits are in place, and the necessary infrastructure and power are expected tobeavailabletomeettheschedule.Constanciabenefitsfromaccesstoexistingroads, rail, a deep sea port and a power substation, which will support production andthemovementofcopperconcentratefromthesite.wehavesecured10-yearportaccessandpowersupplyagreements,aswellasa15-yeartaxandfiscalstabilityagreementwiththegovernmentofPeru.

ConstanCia milestones*

Late 2014 First production

Q2 2015 Commercial production

* Alltimelinesareestimates.

AVeRAgeAnnUALCoPPeRPRodUCTIonoF

82,000tonnesoVeRA22-yeARMIneLIFe

Added

47 millionTOnneS OF ReSeRVeS ThRoUghexPLoRATIon


Finding, expanding and developing mineral deposits

2


in THE Mining businEss, exploration and ConstruCtion

aRE THE kEys To MaxiMizing shareholder value.

Lalor exploration from underground expected to begin

in late 2014.1,500

0

500


ExplorationhudbaypeoplehavebeenexploringinnorthernManitobaformorethan87yearsandtheyhavebecomespecialistsinapplyinginnovativegeophysicaltechniquestoidentifyprospectivetargets.weareleveragingthisexpertisetodriveourglobalexplorationstrategy.

ourprimaryfocusatthistimeisonbrownfieldopportunitiesnearourexistingdeposits,inordertoleverageexistinginfrastructure.wehavebudgeted$20.4 millionforexplorationin2014,three-quartersofwhichwillbespentin Manitoba.

UndergroundexplorationdrillingatLalorisourtoppriority.wearedevelopinganexplorationdriftatthe955to1,025-metrelevel,whichwillenabletighter-spaceddrillingtoupgradeknowninferredresourcesandtestthedown-plungeexplorationpotentialofthegoldandcopper-goldzones.wewillalsocontinueundergrounddrillingatthe777minewiththeobjectiveofextendingtheminelife beyond 2020.

The22,516-hectareConstanciapropertyisalsopromising.In2014,weplantocontinueexplorationworkontheporphyryandskarnmineralizationpotentialofthe property near the main deposit. Geophysical activities are underway to help definenewareasofactivity.

wE HavE a sTRong TRaCk

RECoRD oF FinDing nEw

resourCes near our

ExisTing oPERaTions

anD bRinging THEM inTo

PRoDuCTion in a way

that Creates value For

shareholders and our

oTHER sTakEHolDERs.

alaN Hair SenIoRVICePReSIdenTAndChIeFoPeRATIngoFFICeR


Lalor: Our Next Major Underground Minehudbay’sexplorationteamdiscoveredtheLalordepositin2007usinganinnovativeadaptationofelectromagneticgeophysicalsurveystopenetratedeepbelowtheFlinFlongreenstonebelt.Subsequentexplorationidentifiedseparateanddistinctgoldandcopper-goldzonesinadditiontothepreviouslydefinedzinc zone.onthebasisofthesediscoveries,thehudbayteamwasawardedthePdACbilldennisAwardforexploration–andwefast-trackeddevelopmentof the Lalor resource.

In2009,webeganconstructionofathree-kilometrerampfromourChiselnorthminetotheLalordeposittoenableearlyaccesstothezinczoneandestablishanundergrounddrillingplatform.Thenextyear,wecommittedtoadvancingLalortofullproduction.bymid-2012,wehadcompletedtheventilationshaft,enablingustostartminingandgeneratecashflowamerefiveyearsaftertheinitialLalordiscovery.ThetimingcoincidedwiththeclosureoftheChiselnorthminesoastoprovideacontinuoussourceofzincfeedforourconcentratorandzincplant,aswell as the necessary personnel.

Lalorisexpectedtobecomeournextmajorundergroundmine,withananticipated15yearsofhigh-volume,low-costproduction.Themineportionoftheprojectremainsonbudgetandonschedule.Commissioningofthemainproduction shaft is expected in the second half of 2014, at which time we will discontinueuseoftheventilationshaftforhoistingore.wewillcontinuetoprocessLalororeatthenearbySnowLakeconcentratoruntilanewconcentratoris completed at the mine site.

lalor milestones*

Mid-2014 CompletionofrefurbishedSnowLakeconcentrator

h22014 Commissioningofmainproductionshaft

H2 2014 Commercial production from main production shaft

* Alltimelinesareestimates.

PRoJeCTedLIFeoFMIneoF

15+ years

2nd largestMIneRALdePoSITInThe FLInFLongReenSTonebeLT

AMIneISbUILTonLyIFAMIneRALdePoSITISeConoMICALLyFeASIbLe,And SoCIALAndenVIRonMenTALSTAndARdSCAnbeMeT.


Mine DevelopmentMinebuildingisacomplexprocess.ourexperienceandunderstandingofthe bestwaystoaddressthechallengesassociatedwithdesigning,permitting,financingandbuildingprojectsareenablingustobringthreeminesintoproduction,onschedule,whilemaintainingastrongliquidityposition.

wehavestrivedtomanageourcapitalspendingprudentlyandsecurethefinancingneededtocompleteourprojectswhileminimizingshareholderdilution.overthepasttwoyears,weraisedalmostUS$1.8billionthroughnon-equitysources.In2013,wetookpromptactiontoaddresscostincreasesatConstancia,significantlyde-riskingtheuncertaintyaroundtheremainingworktobedone,makingspendingcutsanddeferralsofalmost$100millionacrosstheCompany,anddeferringconstructionofthenewLalorconcentrator.

wearesuccessfullynavigatingpermittingandregulatoryapprovalsprocesses.In 2013, Hudbay received the Environment Act licence for Reed, which allowed us to commence production at the new mine on schedule. We also received approval for an amendment to our environmental and social impact assessment atConstancia,sothatthisprojectremainsontrack.InMarch2014,wereceivedthe Environment Act licence for the Lalor mine, which will enable full production via the main shaft.

28 minesdeVeLoPedInThe FLIn FLOn GReenSTOne beLT oVeR87yeARS

$1.8billion (us)RAISedThRoUgh non-eqUITySoURCeS


Reed: Fit for PurposeWe received the Environment Act licence for the Reed project in September 2013 andstartedinitialproductionshortlythereafter.Reedisasmall,high-gradecopperdepositthatbenefitsfromitsproximitytoFlinFlon,enablingustotruckoretoourmaincomplexforprocessinginsteadofbuildingon-sitefacilities.

ThegreatestchallengewasReed’slocation–withintheboundaryofaManitobaprovincialpark.weworkedwiththeManitobaauthoritiestominimizethemine’sfootprint,mitigateotherpotentialdisturbancesandensurethattheoperationdoesnotaffectthelocalcaribouhabitat.Thisincludedlimitingtreeclearingtoseven of the 14 hectares our permit allowed. even then, trees were removed selectivelyandthewoodwasgiventotheprovincialparkforuseasfirewood.Accessroadsandpowerandpipelinerouteswerecurvedtopreventdirectsightlinesfrompublicroadstothemine.Themainfanwasinstalledundergroundandsound-reducingenclosureswerebuiltforgenerators,compressorsandtheventilationheater.Atthecloseofmining,thesitewillbeindistinguishablefrom otherareasintheparkthathavebeenclearedforuseaspicnicgroundsand campsites.

Ownership 70%

Projectedlifeofmine 5years

ConstructionCAPex(2012–2014) $72million

15,000tonnesAVeRAgeAnnUALCoPPeRPRodUCTIonoVeRFIVeyeARS


Optimizing the value of producing assets

3


saFETy, EFFiCiEnCy anD PERFoRManCE aRE THE DEFining

CharaCteristiCs oF our oPERaTing CulTuRE.

(kt)

0

300

600

900

1,200

1,500

1,800

2011 20132012

Constancia

Existing Operations

Lalor

Reed

(kt)

0

50

100

150

200

250

300

2013 2015E2014E

20102009

1,5401,488 1,492 1,529

1,626

$38 $37 $37

$43 $43

777 mine produCtion and unit Costs

Ore mined (kt)

Mining cost (C$/tonne)


VISIT www.hUdbAyMIneRALS.CoM/CSRRePoRTToSeeoURMoSTReCenTCoRPoRATeSoCIALReSPonSIbILITyRePoRT.

BraD laNTzVICePReSIdenT,MAnITobAbUSIneSSUnIT

Operational Efficiencyhudbay’sManitobaoperationshaveprovidedreliable,low-costproductionfor manydecades.ourunwaveringcommitmenttosafetyandefficiency,andourongoinginvestmentsinourmines,facilities,equipmentandpeoplehelpusrealizethefullvalueoftheseassets.

overtheyears,workplaceaccidentsandincidentshavebeenonadownwardtrendandweremaincommittedtoourgoalofeliminatingworkplaceinjuries. wearenowintroducinginitiativestotakesafetyperformancetoaneven higherlevel.

We continue to extend the life of operations and spend dollars wisely in areas thatsupportstrategicobjectives.In2012,wedrovearampfromsurfacetoour777mine,whichenabledustoexpandtheproductionratebyabout8%andgainotheroperatingefficiencies.despitetheinflationarypressuresthathaveplaguedourindustry,theoperatingcostpertonneoforeproducedat777hasremainedrelativelyconsistentoverthepastseveralyears.Andweremainfocusedoncontinuedefficienciestoensurewemaintainourlow-costprofile.

In2013,wedecidedtoinvest$9millionattheSnowLakeconcentratortodoubleits capacity and accommodate production from the Lalor mine until 2016. This decisionenablesustoextendthelifeofanexistingconcentratoranddeferconstruction of the new Lalor concentrator, and approximately $325 million of capital expenditures, until we need it.

in ManiToba, ouR HigH-

qualiTy assETs, sTablE

woRkFoRCE, low EnERgy

CosTs anD RobusT

systems and proCesses

MakE THE 777 MinE onE

oF THE lowEsT CasH

Cost produCers in

THE inDusTRy.


AUG ’13 SEP ’13 OCT ’13 NOV ’13 DEC ’13

CiPo FinanCial bEnEFiT TiMElinE

$1,076,385

Flin Flon: CIPO Drives Process ImprovementsAttheFlinFlonoperations,welaunchedthehudbayContinuousImprovementProcessoptimization(CIPo)initiativetogeteveryoneinvolvedineffortstoimprovesafety,efficiencyandvalue.In 2013,thefinancialbenefitfromformallyclosedCIPoprojectstotaledmorethan $1 million.ourCIPotargetthisyearis$5 million.

employeesareencouragedtosubmitideasabouthowimprovementscouldbemadeindifferentareas.high-potentialideasarethenformalizedintoaprojectwithaspecificmandate,team,actionplanandperformancemeasures.A dedicatednewsletterprovidesprojectupdatesandhighlightsachievements.

Ventilationondemand(Vod)wasaCIPoprojectthatsavesatleast$178,000ayearandlowersenergyconsumption.Ateamofemployeesatthe777 minerecognizedanopportunitytoreducecostsbyturningundergroundfans onoroffbasedonneed,ratherthanhavingthemoperatearoundtheclock.Theirsolutioninvolvedatime-basedcontrolsysteminwhichfansautomaticallyshutoffafteracertainperiodoftimeandmustbemanuallyrestartedoncesomeoneisworkingin that area of the mine.

Attheendof2013,therewere53activeprojects,82completedprojectsand92 projectsintheCIPopipeline.

53ConTInUoUSIMPRoVeMenTPRoJeCTSUndeRwAy

0.4LoSTTIMeACCIdenT FReqUenCyACRoSSTheCoMPAnyIn2013

From August 2013, when we started formally tracking closed CIPO projects, to the end of the year, the financial benefits attributable to CIPO projects totaled more than $1 million.


Copper (tonnes)

Contained Metal in Concentrate Production1, 2

2013 2014

2014E2013

(kt)

(koz)

2013E 2014E

2013 2014E

2013 2014E

2013 2014E

(kt)

0

30000

60000

90000

120000

0

20000

40000

60000

80000

100000

120000

0

30000

60000

90000

120000

48,000

preCious metals3 (troy oz)

2013 2014

2014E2013

(kt)

(koz)

2013E 2014E

2013 2014E

2013 2014E

2013 2014E

(kt)

0

30000

60000

90000

120000

0

20000

40000

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80000

100000

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0

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90000

120000

zinC (tonnes)

2013 2014

2014E2013

(kt)

(koz)

2013E 2014E

2013 2014E

2013 2014E

2013 2014E

(kt)

0

30000

60000

90000

120000

0

20000

40000

60000

80000

100000

120000

0

30000

60000

90000

120000

29,930

112,000

91,256 96,00086,527

Production Guidancehudbay’scopper,preciousmetalsandzincproductionoverthepasttwoyearsreflectsthepermanentclosureoftwooperatingmines(TroutLakeandChiselnorth)andthegradualramp-upofproductionatournewmines.Lookingahead,2014willbethefirstyearinwhichproductionacrossallkeymetalsisexpectedto increase, with a full year of operations at Reed and initial output from the completed production shaft at Lalor as well as the Constancia project. next year’s growthisexpectedtobeevengreater.

570%PRoJeCTedInCReASeInCoPPeR PRodUCTIonFRoM 2013To2015

1 Includes 100% of Reed mine production. 2 2014estimatedproductionlevelsbasedonmidpointof2014productionguidancereleasedonJanuary8,2014. 3 Preciousmetalsproductionincludesgoldandsilverproductionanddoesnotincludetheimpactofthepreciousmetalsstreams.Forpreciousmetalsproduction,silverisconvertedtogoldusingtheaveragegoldandsilverrealizedsalespricesduringtheperiod.Forpreciousmetalsguidance,silverisconvertedtogoldataratioof50:1.


Community Relationsweunderstandthatactingresponsiblyandmaintaininggoodcommunityrelationsareessentialforhudbay’slong-termsuccess.wecollaboratewithcommunities near our operations to advance social and economic development andachievecommongoals.

InManitoba,hudbayhasjoinedwithseveralorganizationstopromotejobsfornorthernpeople.Thereisaneedforskilledpeopleatouroperationsandwewouldprefertohirelocally.Tohelpmeettheneed,wedonatedfundingandlandtothenorthernManitobaMiningAcademy,andouremployeeshelpeddevelopcurriculumforseveralcourses.Tenhudbayemployees,includingthreerecentlyhiredopaskwayakCreenationbandmembers,graduatedfromtheMiningAcademy’snewIntroduction to Mining course in 2013 and subsequently beganworkingatourmines.wearealsoparticipatinginthenewlycreatedMiningAdvisoryCouncil,whichdrawstogetherFirstnationsleadership,industryrepresentativesandthegovernmentofManitobawiththegoalofensuring Firstnationscommunitiesbenefitfromthedevelopmentofnewmines.

InPeru,hudbaywaspresentedaSustainabledevelopmentAwardfortheprogressmadeintheruralcommunitiesnearConstanciathroughmulti-sectorialcommitteesfordevelopment(CMd).TheCMdswerecreatedunderourlifeofmineagreementswiththecommunitiesandaremadeupofhudbayandcommunity representatives. The top priorities are health, education, infrastructure andagriculturaldevelopment.ThroughtheworkoftheCMds,hundredsofpeople nowhaveaccesstoqualityhealthcareandelectricity,anewsewagesystem was installed in the town of Chilloroya, community and computer centres werebuilt,andschoolfacilitiesandteachertraininghavebeenupgraded.

PAId

$8.5 millionToMUnICIPALITIeSThRoUghTAxeSAndgRAnTS-In-LIeUoF TAxeSIn2013

hIRed

1,304peopleFRoMneIghboURIngCoMMUnITIeSTowoRkAT ConSTAnCIAdURIngPeAk ConSTRUCTIon


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ManagEMEnT TEaM

1 DaviD a. GarofaloPReSIdenTAndChIeFexeCUTIVeoFFICeR

davidgarofalojoinedhudbayasPresidentandChiefexecutiveofficeranddirectorinJuly2010.david’sroleistoestablishandexecutehudbay’svisionandstrategy,workingwithhudbay’sboardofdirectorsandseniormanagement.heleadsdeliveryoflong-termvalueandachievementofcriticalshort-termperformancegoals,andshapeshudbay’sorganizationalculture.heisalsoresponsibleformotivatingandmentoringahigh-performancemanagementteam.davidisChairofhudbay’sexecutiveCommittee,theseniormanagementgroupthroughwhicheverystrategicdecisionattheCompanyisadvanced.beforejoininghudbay,davidservedasSeniorVicePresident,FinanceandChiefFinancialofficerwithAgnico-eagleMinesLimited(1998–2010).earlierinhiscareer,heservedasTreasurerandheldvariousfinanceroleswithInmetMiningCorporation(1990–1998).davidwasnamedCanada’sCFooftheyearbyFinancialexecutivesInternationalCanada(2009)andTopgunCFobybrendanwoodInternational(2009and2010)andwasrecognizedbyIR MagazinewithawardsforbestInvestorRelationsbyaCFo(2009and2010)andbestInvestorRelationsbyaCeo(2011). He was also The Northern Miner’sMiningPersonoftheyearfor2012.AgraduateoftheUniversityofToronto(b.Comm.),davidisaCharteredAccountantandaCertifieddirectoroftheInstituteofCorporatedirectors(ICd.d).healsoservesontheboardofdirectorsofMackenziehealthFoundation(formerlyyorkCentralhospitalFoundation).

2 DaviD s. BrysoNSenIoRVICePReSIdenTAndChIeFFInAnCIALoFFICeR

AsCFo,davidplaysaleadingroleinsecuringfundingforhudbay’sgrowthandinmanaginghudbay’sfinancialreportinganddisclosurepractices.heisone of four members of Hudbay’s executive Committee. He also oversees the Company’sinformationtechnology,marketingandcommunicationsfunctions.davidbringsmorethan20yearsoffinancialexperiencetohudbay,includingprogressivelyseniorleadershiprolesintheminingandenergyinfrastructuresectors.Priortojoininghudbayin2008,hewasVice-PresidentandthenCFowithSkyeResourcesInc.and,previously,wasTreasurerofTerasenInc.davidholdsabachelorofCommerce(Finance)fromtheUniversityofbritish ColumbiaandisaCharteredFinancialAnalyst.

3 alaN T. C. HairSenIoRVICePReSIdenTAndChIeFoPeRATIngoFFICeR

AsCoo,Alanhairistheseniorleaderoftheinternationaloperatingteamsdeliveringhudbay’sproductionandgrowthcommitments.AlanisresponsibleforeveryaspectoftheCompany’soperations,businessdevelopment, technical services, exploration and corporate social responsibility. He is also one of four members of Hudbay’s executive Committee.Alanjoinedhudbayin1996,holdingleadershiprolesinoperationsorbusinessdevelopmentthroughout,andwasappointedSeniorVicePresidentandChiefoperatingofficerinJune2012.heholdsanhonoursbachelorofSciencedegreeinMineralengineeringfromtheUniversityofLeeds,england.

4 BraD W. laNTzVICePReSIdenT,MAnITobAbUSIneSSUnIT

Thesenior-mostleaderoftheregionalmanagementteaminManitoba,bradbringstheexperienceofmorethan30yearsinmining.hewasappointedVicePresidentoftheManitobabusinessUnitinSeptember2011.duringhiscareer,bradhasheldrolesinundergroundoperations,geologyandmanagement.hejoinedhudbayin1987andwasmanagerofthe777minewhenhewaspromotedtoVicePresident,Miningin2007.bradnowprovidesstrategicandoperationalleadershipforallaspectsofhudbay’sactivitiesinManitoba.heisaccountableformanagingcapitalandhumanresourcesandensuringcompliancewithregional,corporateandglobalpoliciesandproceduresandisresponsibleforensuringahigh-performanceculturethatiscapableofrespondingandadaptingtogrowthandchange.bradgraduatedfromtheUniversityofwaterloowithabachelorofScienceinearth Sciences.

5 kEN GillisSenIoRVICePReSIdenT,CoRPoRATedeVeLoPMenT

kenleadsthecorporatedevelopmentteamthatassessesthesuitabilityofassetstosupporthudbay’sgrowthstrategy,aseitherpotentialacquisitionsorprospectswheretheCompanycanaddvaluebytakinganinvestmentposition.kenisalsooneoffourmembersofhudbay’sexecutiveCommittee.hejoinedhudbayinAugust2010,bringinga20-yearhistoryofcorporatedevelopmentandrelatedactivitiesinmining,bothwithminingcompaniesandwithfinancialandinvestmentfirms.Priortoassuminghisroleathudbay,heservedasexecutivedirectorofMacquarieCanada’snorthAmericanMiningInvestmentbankingpractice.kenholdsaMasterofAppliedScienceinMineralexploration,anMbAfromMcgillUniversity,andadegreeingeologicalScience(b.Sc.)fromSaintFrancisxavierUniversity.


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6 CasHEl MEaGHErVICePReSIdenT,SoUThAMeRICAbUSIneSSUnIT

CashelMeagherisleaderoftheSouthAmericabusinessUnit,responsibleforhudbay’sstrategicandoperationalperformanceintheregion.AtConstancia,Cashelensureshudbaymaintainstechnicalandsustainableoperatingstandardsduringconstructionoftheproject,andthatthesepracticescontinuethroughtooperation.Regionally,heisalsoresponsibleforexecutiveoversightofhumanandcapitalresourcesandensuringcorporatestandardsaremetinenvironmentalmanagement,healthandsafetyperformance, and community relations. Cashelhasanextensivebackgroundinpreciousmetalandbasemetalexploration,resourceandreserveestimation,engineeringstudies,andopenpitandundergroundoperations.Priortojoininghudbay,heheldmanagementpositions with Vale Inco in exploration, technical services, business analysis and mineoperations.CashelholdsaJointAdvancedMajoringeologyandChemistryfromSaintFrancisxavierUniversityandisaProfessionalgeoscientistregisteredwiththeAssociationofProfessionalgeoscientistsofontario.

7 PaTriCk DoNNEllyVICePReSIdenT,LegALAndCoRPoRATeSeCReTARy

AsVicePresident,LegalandCorporateSecretary,Patrickprovidesleadership,oversightanddirectiononalllegalmattersinvolvinghudbayand its operations. He also serves as Hudbay’s Corporate Secretary, with responsibilitiesrelatingtotheboardofdirectorsanditscommittees,includingtheidentificationandimplementationofcorporategovernancebestpractices.Patrickjoinedhudbayin2008andwasappointedtohiscurrentrolein2011.Priortojoininghudbay,hepractisedcorporateandsecuritieslawatosler,hoskin&harcourtLLP.PatrickholdsalawdegreefromtheUniversityofVictoriaandabachelorofArtsfromtheUniversityofwesternontario.

8 PaTriCk MErriNVICePReSIdenT,bUSIneSSdeVeLoPMenTAndTeChnICALSeRVICeS

Patoverseestechnicalandoperationalprocessesrelatedtohudbay’soperationsandgrowthinitiativesincludingthevalidationofacquisitionopportunitieswithinnorthAmerica.Inthiscapacityheisresponsibleformanaginginternalandexternalprojectreview,duediligenceprocesses,projectandoperationalgovernance,reportingandriskmanagement.Allengineeringandgeologicalstandardsandreportingresponsibilitiesalsofallwithinhismandate.PatdevelopedastrongoperatingbackgroundoverthecourseofhiscareerinCanadaandinternationally,takingonavarietyofprogressivelyseniorrolesathudbayandatminingandmetalscompaniesincludingxstratanickel,LucasMilhauptandAdexMining.PatholdsaMasterofbusinessAdministration(MbA)fromtheUniversityofTorontoandabachelorofengineering(Chemical)degreefromMcgillUniversity.hehasbeenamemberofProfessionalengineersofontariosince1997.

9 DaviD ClarryVICePReSIdenT,CoRPoRATeSoCIALReSPonSIbILITy

Foraminingcompany,themeasureofsuccessisperformanceaswellasproduction.AsVicePresident,CorporateSocialResponsibility,david’smandate is to develop, implement and monitor, and account for corporate standards for health, safety, the environment and community relations. Priortojoininghudbayin2011,davidwasprincipalathisownfirm,InnotainInc.,providingsustainabilityandresponsibilityconsultingservicestotheminingandenergyindustries.healsospent18yearsinaseriesofroleswiththeinternationalengineeringandconsultingfirmhatchLtd.,servinglastlyasdirector,ClimateChangeInitiatives.davidholdsbachelorofScienceandMasterofSciencedegreesinengineeringfromqueen’sUniversityandanMbAfromInSeAd,andisalicensedProfessionalengineerintheProvinceofontario.

10 Mary-Lynn OkeVICePReSIdenT,FInAnCe

AsVicePresident,FinanceandChiefFinancialofficer,ManitobabusinessUnit,Mary-LynnisresponsibleforaccountingandfinancialreportingfunctionsforthecorporateofficeandtheManitobabusinessUnit,includingfinancialanalysis,budgeting,planning,taxandpayroll.Priortojoininghudbayin2007,Mary-LynnwasaseniormanagerintheTransactionTaxPracticeofernst&youngLLP,whereshedevelopedmorethan10yearsofCanadianincometaxexperience,includingtaxplanningforpublic companies in the resource sector. SheholdsanhonoursbachelorofArtsinbusinessAdministrationfromtheUniversityofwesternontarioandisaCharteredAccountant.

11 HErNaN sozaVICePReSIdenT,exPLoRATIon

HernanSozajoinedhudbayinlate2011.AsVicePresident,exploration,heisresponsibleforleadingandmanaginghudbay’sgeologistsandgeophysicalfunctions,providingdirectionandleadershiptoensureefficientandeffectivefielddevelopmentandexploration,aswellastheaccurateevaluationofpotentialnewgrowthareas,inlinewithhudbay’sbusinessobjectives.hernanhasmorethan40yearsofminingandmineralexplorationexperiencespanningSouthandCentralAmerica.Priortojoininghudbay,heworkedtoadvanceworld-classdepositsforCodelco,SaintJoe’sMinerals,exxonMinerals,AnacondaMineralsandPlacerdome.hegraduatedasageologistfromtheUniversidaddeChilein1968.hernancurrently serves as the Chilean representative on the Committee for Mineral ReservesInternationalReportingStandards(CRIRSCo).


CoRPoRaTE govERnanCE

G. WEslEy voorHEisChAIRMAn;CoRPoRATegoVeRnAnCeAndnoMInATIng

CoMMITTee(ChAIR)

Mr.VoorheisisChairmanofhudbay.heisalsoManagingdirectorofVC&Co.IncorporatedandapartnerofVoorheis&Co.LLP,whichactasstrategicadvisorstoinstitutionalandothershareholders.PriortotheestablishmentofVoorheis&Co.LLPin1995,hewasapartnerinamajorTorontolawfirm.

DaviD a. GarofaloPReSIdenTAndChIeFexeCUTIVeoFFICeR

davidgarofalojoinedhudbayasPresidentandChiefexecutiveofficeranddirectorinJuly2010.Mr.garofalo’sroleistoestablishandexecutehudbay’svisionandstrategy,workingwithhudbay’sboardofdirectorsandseniormanagement.heleadsdeliveryoflong-termvalueandachievementofcriticalshort-termperformancegoals,andshapeshudbay’sorganizationalculture.heisalsoresponsibleformotivatingandmentoringahigh-performancemanagementteam.Mr. garofaloisChairofhudbay’sexecutiveCommittee,theseniormanagementgroupthroughwhicheverystrategicdecisionattheCompanyis advanced.AgraduateoftheUniversityofToronto(b.Comm.),Mr.garofaloisaCharteredAccountantandaCertifieddirectoroftheInstituteofCorporatedirectors(ICd.d).healsoservesontheboardofdirectorsofMackenziehealthFoundation(formerlyyorkCentralhospitalFoundation).

iGor GoNzalEsTeChnICALCoMMITTee,CoMPenSATIonCoMMITTee

Mr.gonzalesisfromCusco,Peru,andhasmorethan30yearsofexperienceintheminingindustry.hewaswithbarrickgoldCorporationfrom1998to2013,mostrecentlyasexecutiveVicePresidentandChiefoperatingofficer.between1980and1996,Mr.gonzalesservedinvariousroleswithSouthernPeruCopperCorporation.Mr.gonzaleshasabachelorofSciencedegreeinChemicalengineeringfromtheUniversityofSanAntonioAbadinCusco,Peru,andwasaFulbrightScholaratthenewMexicoInstituteofMiningandTechnology,whereheearnedaMasterofSciencedegreeinextractive Metallurgy.

ToM a. GooDMaNenVIRonMenTAL,heALTh,SAFeTyAndSUSTAInAbILITyCoMMITTee(ChAIR),TeChnICALCoMMITTee

Mr.goodmanworkedforhudbayforover34yearsinawidevarietyofoperational,technicalandmanagementpositions,includingasSeniorVicePresidentandChiefoperatingofficer,untilhisretirementinJune2012.Mr. goodmanisagraduateinChemicalandMetallurgicalTechnologyfromthebritishColumbiaInstituteofTechnology.Mr.goodmanisthechairmanoftheMiningAssociationofManitoba.

wE bEliEvE THaT gooD govERnanCE

is CRiTiCal To HuDbay’s suCCEss as

a PubliCly TRaDED CoMPany anD To

sECuRing THE ConFiDEnCE anD TRusT

oF ouR Many sTakEHolDERs. ouR

CoRPoRaTE govERnanCE PRaCTiCEs

PRoMoTE ETHiCal bEHaviouR anD HigH

PERFoRManCE sTanDaRDs THRougHouT

THE oRganizaTion.

Theprimarymandateofhudbay’sboardofdirectorsis to oversee the business of the Company and provide guidance tomanagementsoastoassistinmeetingcorporateobjectivesandmaximizingshareholdervalue.The boarddischargesitsresponsibilitiesdirectlyandthroughfivecommittees–theAuditCommittee,theCompensation Committee, the Corporate Governance and nominatingCommittee,theenvironmental,health,Safetyand Sustainability Committee and the Technical Committee.

wehaveadoptedaCodeofbusinessConductandethicsthatsetsoutbasicprinciplesfordirectors,officersandemployeesontheconductandethicaldecision-makingintegraltotheirwork.InconjunctionwiththeCode,atoll-freewhistleblowerhotlineallowsforanonymousreportingof suspected violations. More information is posted on our website.


alaN r. HiBBENCoRPoRATegoVeRnAnCeAndnoMInATIngCoMMITTee,CoMPenSATIonCoMMITTee

Mr.hibbenhasheldseveralseniorpositionswithRbCCapitalMarkets,includinghiscurrentroleasManagingdirector,which heassumedonhisreturntoRbCinMarch2011.hewasheadofstrategyanddevelopmentatRbCFinancialgroupfromJanuary2005toJune2007andaprincipalwithShakerhillPartnersLtd.fromJuly2007toJanuary2009.FromJanuary2009toFebruary2011hewasapartnerwithblairFranklinCapitalPartnersInc.,afinancialadvisoryfirm.Mr. hibbenreceivedhisbachelorofCommercedegreefromtheUniversityofToronto.heisqualifiedasaCanadianCharteredAccountantandalsoholdstheCFAdesignation.heisaCertifieddirectoroftheInstituteofCorporatedirectors(ICd.d).

W. WarrEN HolMEsCoMPenSATIonCoMMITTee(ChAIR),enVIRonMenTAL,heALTh,SAFeTyAndSUSTAInAbILITyCoMMITTee,TeChnICAL CoMMITTee

Mr. Holmes was Hudbay’s executive Vice Chairman from november 2009 toJuly2010anditsInterimChiefexecutiveofficerfromJanuary2010toJuly2010.hehasover40yearsofminingindustryexperience,mostnotablywithnorandaInc.(1964to1986)wherehewasVicePresidentandgeneralManagerofPamourPorcupineMinesLimited,andwithFalconbridgeLimited(1986to2002),wherehewasSeniorVice-PresidentofCanadianMiningoperations.SincehisretirementfromFalconbridge,Mr. holmeshasservedasacorporatedirector.Mr.holmeshasbeenPresidentoftheCanadianInstituteofMining&Metallurgy,isaProfessionalengineerandholdsanengineeringdegreefromqueen’sUniversityandanMbAfromtheUniversityofwestern ontario.

saraH B. kavaNaGHAUdITCoMMITTee(ChAIR),enVIRonMenTAL,heALTh,SAFeTy AndSUSTAInAbILITyCoMMITTee

Ms.kavanaghhasbeenservingasaCommissionerattheontarioSecuritiesCommissionsince2011.SheisalsoaTrusteeofwPTIndustrialReITandadirectorandChairoftheAuditCommitteeatAmericanStockTransferandCanadianStockTransfer.between1999and2010,Ms. kavanaghservedinanumberofseniorinvestmentbankingrolesatScotiaCapitalInc.Shehasalsoheldseniorfinancialpositionsinthecorporatesector.Ms. kavanaghgraduatedfromharvardbusinessSchoolwithaMaster’sinbusinessAdministrationandreceivedabachelorofArtsdegreeineconomicsfromwilliamsCollegeinwilliamstown,Massachusetts.Ms.kavanaghcompletedthedirectorseducationProgramattheInstituteofCorporatedirectorsin2011.

JoHN l. kNoWlEsAUdITCoMMITTee,CoRPoRATegoVeRnAnCeAndnoMInATIng CoMMITTee

Mr.knowlesisPresidentandCeoofwildcatexplorationLtd.,a miningexplorationcompany,priortowhichhewasexecutive VicePresidentandChiefFinancialofficerofAurResourcesInc.from 2005to2006.hewasChiefFinancialofficerofhbMSfrom1996to2005and,followingitsacquisitionbyhudbay,hewasVicePresidentandChiefFinancialofficerofhudbayuntil2005.Mr.knowleshasover25yearsofexperienceinseniorroleswithCanadianandinternationalresourcecompanies.heisaCharteredAccountantandholdsabachelorofCommercedegreefromqueen’sUniversity.

alaN J. lENCzNErAUdITCoMMITTee,CoRPoRATegoVeRnAnCeAndnoMInATIng CoMMITTee

Mr.Lencznerhasbeenacommerciallitigatorforover40 years.heisFoundingPartnerandnowCounselatLencznerSlaghtRoyceSmithgriffinLLP,alitigation-focusedlawfirm.heisalsoaCommissioneroftheontarioSecuritiesCommission.Mr.Lencznerhasab.A.(hons.)andanM.A.hegraduatedfromtheUniversityofTorontowithanLL.b.(hons.Standing)in1967andwasadmittedtotheontariobarin1969.hewasappointedqueen’sCounselin 1982.

kENNETH G. sToWETeChnICALCoMMITTee(ChAIR),enVIRonMenTAL,heALTh,SAFeTyAndSUSTAInAbILITyCoMMITTee

Mr.StowewasChiefexecutiveofficerofnorthgateMineralsCorporationfrom2001untilhisretirementin2011.hespentthefirst21 yearsofhiscareerwith noranda Inc. in various operational, research and development, and corporateroles.hehasalsoheldseniorpositionsatdiamondFieldsResourcesInc.andwestminResourcesLimited.Mr.StoweisaminingengineerwithabachelorofScienceandMasterofSciencefromqueen’sUniversity.In2006hewastherecipientoftheCanadianMineralProcessoroftheyearaward.

If shareholders approve a special resolution to approve an increase of the numberofhudbay’sdirectorsathudbay’sannualandspecialmeetingofshareholders,theboardintendstoappointMichaelT.waitesasanadditionaldirectorfollowingthemeeting.

MiCHaEl T. WaiTEs

Mr.waitesistheformerPresidentandChiefexecutiveofficerofFinningInternationalInc.heretiredfromFinninginJune2013afterservingasPresidentandChiefexecutiveofficerforfiveyears.Priortothat,Mr.waiteswasexecutiveVicePresidentandChiefFinancialofficerofFinning.hehasalsoheldseniorpositionswithCanadianPacificRailwayandChevronCanadaResources.Mr.waitesholdsabachelorofArts(honours)ineconomicsfromtheUniversityofCalgary,aMasterofbusinessAdministrationfromSaintMary’sCollegeofCalifornia,andaMasterofArts,graduateStudiesineconomicsfromtheUniversityofCalgary.hehasalsocompletedtheexecutiveProgramattheUniversityofMichiganbusinessSchool.


kEy FinanCial anD PRoDuCTion REsulTs

Financial condition ($000s) Dec. 31, 2013 Dec. 31, 2012

Cash and cash equivalents $ 631,427 $ 1,337,088workingcapital 583,124 1,182,047Total assets 3,843,986 3,476,497equity1 1,635,611 1,653,771

Financial performance Three Months Ended year Ended($000s except per share and cash cost amounts) Dec. 31, 2013 Dec. 31, 2012 Dec. 31, 2013 Dec. 31, 2012

Revenue $ 136,082 $ 180,994 $ 516,801 $ 702,550(Loss)profitbeforetax (33,693) 24,509 (56,004) 48,381basicanddiluted(loss)earningspershare1 (0.32) 0.05 (0.59) (0.12)Profit(loss)fortheperiod (61,481) 8,143 (109,276) (23,463)operatingcashflowbeforestreamdepositand changeinnon-cashworkingcapital 762 6,002 9,849 142,957operating cash flow per share2 – 0.03 0.06 0.83Cash cost, after byproduct credits (per pound)2 $ 2.16 $ 1.99 $ 1.91 $ 1.11Production (contained metal in concentrate)3 Copper (tonnes) 7,334 8,162 29,930 39,587 Zinc (tonnes) 19,910 18,370 86,527 80,865 gold (troyoz) 18,098 20,909 79,183 86,553 Silver (troyoz) 169,216 198,407 772,524 823,970Metal sold Payablemetalinconcentrate Copper (tonnes) 7,591 10,683 28,703 43,464 gold (troyoz) 19,940 27,102 79,016 84,835 Silver (troyoz) 203,272 292,409 729,106 768,804 Refinedzinc (tonnes) 25,743 30,387 103,894 103,437

1 AttributabletoownersoftheCompany.2 operatingcashflowpershareandcashcost,afterbyproductcreditsperpoundofcoppersoldarenon-IFRSfinancialperformancemeasureswithnostandardizeddefinitionunderIFRS.Forfurtherinformationandadetailedreconciliation,pleaseseepage53ofhudbay’sMd&Afortheyearendeddecember31,2013.3 Metalreportedinconcentrateispriortorefininglossesordeductionsassociatedwithsmeltercontractterms.

Consolidated Condensed FinanCial statements

ThefollowingfinancialstatementsdonotrepresentacompletesetofconsolidatedfinancialstatementsoftheCompany,buthavebeenpreparedtoreflectaccountingprinciplesgenerallyacceptedunderInternationalFinancialReportingStandards.AdditionalfinancialinformationrelatingtotheCompany,includingtheCompany’sauditedconsolidatedfinancialstatementsandmanagement’sdiscussionandanalysisofresultsofoperationsandfinancialcondition,canbefoundonSedARatwww.sedar.com;ontheUnitedStatesSecuritiesandexchangeCommissionwebsiteatwww.sec.gov; or on Hudbay’s website at www.hudbayminerals.com.


ConSoLIdATedCondenSedFInAnCIALSTATeMenTS

ConsoliDaTED balanCE sHEETs

Dec. 31, 2013 Dec. 31, 2012 jan. 1, 2012 (in thousands of Canadian dollars) Restated Restated

assetsCurrent assets Cash and cash equivalents $ 631,427 $ 1,337,088 $ 899,077 Trade and other receivables 168,298 52,876 40,309 Inventories 52,201 58,409 77,150 Prepaidexpensesandothercurrentassets 28,917 23,970 13,964 otherfinancialassets 807 2,442 3,112 Taxes receivable 37,644 52,952 4,352 Assetsheldforsale 5,864 – – 925,158 1,527,737 1,037,964Receivables 57,376 43,149 5,212Inventories 7,888 5,852 5,721Prepaidexpenses 574 1,232 1,227otherfinancialassets 71,182 73,135 102,193Intangibleassets–computersoftware 13,573 12,893 11,872Property,plantandequipment 2,665,075 1,732,173 1,207,168Goodwill 71,373 66,763 68,246deferredtaxassets 31,787 13,563 12,828 $ 3,843,986 $ 3,476,497 $ 2,452,431

liabilitiesCurrent liabilities Trade and other payables $ 218,898 $ 206,490 $ 163,187 Taxes payable 33 5,098 17,413 Other liabilities 41,139 44,828 40,014 otherfinancialliabilities 16,348 18,363 1,159 deferredrevenue 65,616 70,911 – 342,034 345,690 221,773otherfinancialliabilities 23,039 23,128 –Long-termdebt 779,331 479,540 –deferredrevenue 464,135 391,367 –Provisions 146,062 159,030 147,304Pensionobligations 25,931 68,960 32,790otheremployeebenefits 142,114 140,531 121,106deferredtaxliabilities 293,633 214,791 175,080 2,216,279 1,823,037 698,053

equityShare capital 1,021,088 1,020,458 1,020,126Reserves 49,557 (51,936) (8,384)Retainedearnings 564,966 685,249 740,441equity attributable to owners of the Company 1,635,611 1,653,771 1,752,183non-controllinginterests (7,904) (311) 2,195 1,627,707 1,653,460 1,754,378 $ 3,843,986 $ 3,476,497 $ 2,452,431



ConsoliDaTED sTaTEMEnTs oF CasH Flows

year Ended December 31(in thousands of Canadian dollars) 2013 2012

Cashgeneratedfrom(usedin)operatingactivities:Loss for the year $ (109,276) $ (23,463)Tax expense 53,272 71,844Itemsnotaffectingcash: depreciationandamortization 77,509 76,604 Share-basedpaymentexpense 4,851 5,769 netfinanceincome 5,427 8,641 Changeinfairvalueofderivatives 9,061 (2,604) Changeindeferredrevenuerelatedtostream (69,088) (29,322) Changeintaxesreceivable/payable,net (16,602) 44,277 Itemsreclassifiedfromothercomprehensiveincome – (2,050) Impairmentandmark-to-marketlosses 16,403 45,649 Impairment on exploration and evaluation assets 15,356 – Foreignexchangeandother 18,435 10,275Taxes recovered (paid) 4,501 (62,663)operatingcashflowsbeforestreamdepositand changeinnon-cashworkingcapital 9,849 142,957Preciousmetalsstreamdeposit 131,475 491,600Changeinnon-cashworkingcapital 2,795 (90,705) 144,119 543,852Cashgeneratedfrom(usedin)investingactivities: Interest received 10,920 5,728 Acquisitionofproperty,plantandequipment (901,985) (508,467) Acquisitionofintangibleassets (3,011) (2,004) Acquisitionofinvestments (7,155) (3,802) depositofrestrictedcash (20,897) – Peruviansalestaxpaidoncapitalexpenditures (130,885) (37,108) (1,053,013) (545,653)Cashgeneratedfrom(usedin)financingactivities: Long-termdebtborrowingnetoftransactioncosts 261,427 471,796 Interest paid (58,499) – Proceedsfromexerciseofstockoptions 449 227 Financingcosts (1,005) (8,676) dividendspaid (18,924) (34,392) 183,448 428,955effectofmovementinexchangeratesoncash and cash equivalents 19,785 10,857net (decrease) increase in cash and cash equivalents (705,661) 438,011Cashandcashequivalents,beginningofyear 1,337,088 899,077Cash and cash equivalents, end of year $ 631,427 $ 1,337,088



Consolidated inCome statements

year Ended December 31(in thousands of Canadian dollars, except share and per share amounts) 2013 2012

Revenue $ 516,801 $ 702,550Cost of sales Mineoperatingcosts 360,085 432,866 depreciationandamortization 76,714 75,801 436,799 508,667grossprofit 80,002 193,883Sellingandadministrativeexpenses 39,956 39,573exploration and evaluation 23,286 43,572otheroperatingincome (913) (2,316)otheroperatingexpenses 9,197 11,332Assetimpairmentloss 15,356 –Resultsfromoperatingactivities (6,880) 101,722Finance income (3,494) (6,217)Finance expenses 8,921 14,858 otherfinancelosses 43,697 44,700netfinanceexpense 49,124 53,341(Loss)profitbeforetax (56,004) 48,381Tax expense 53,272 71,844Loss for the year $ (109,276) $ (23,463)

Attributableto: Owners of the Company $ (101,359) $ (20,800) non-controllinginterests (7,917) (2,663)Loss for the year $ (109,276) $ (23,463)

(Loss)earningspershareattributabletoownersoftheCompany:basicanddiluted: $ (0.59) $ (0.12)

weightedaveragenumberofcommonsharesoutstanding: basic 172,048,434 171,960,783 diluted 172,048,434 171,960,783



Consolidated statements oF Comprehensive inCoME (loss)

year Ended December 31 2013 2012(in thousands of Canadian dollars) Restated

Loss for the year $ (109,276) $ (23,463)Other comprehensive income (loss):Itemsthatmaybereclassifiedsubsequentlytoprofitorloss Recognizeddirectlyinequity: netexchangegain(loss)ontranslationofforeignoperations 87,669 (10,886) effectiveportionofchangeinfairvalueofcashflowhedges – (442) Changeinfairvalueofavailable-for-salefinancialinvestments (30,254) (29,852) Taxeffect – 145 57,415 (41,035)Itemsthatwillnotbereclassifiedsubsequentlytoprofitorloss Recognizeddirectlyinequity: Remeasurement – actuarial income (loss) 36,158 (52,689) Taxeffect (7,792) 10,954 28,366 (41,735)Transferred to income statements: Changeinfairvalueofcashflowhedges – (2,050) onimpairmentofavailable-for-salefinancialassets 16,291 40,181 Sale of investments (67) 8 Taxeffect – 529 16,224 38,668Other comprehensive income (loss), net of tax, for the year 102,005 (44,102)Total comprehensive loss for the year $ (7,271) $ (67,565)

Attributableto: Owners of the Company $ 322 $ (64,798) non-controllinginterests (7,593) (2,767)Total comprehensive loss for the year $ (7,271) $ (67,565)


qualified PersonsThetechnicalandscientificinformationinthisannualreportrelatedtotheConstanciaprojecthasbeenapprovedbyCashelMeagher,P.geo.,hudbay’sVicePresident,South AmericabusinessUnit.ThetechnicalandscientificinformationrelatedtoallothersitesandprojectscontainedinthisannualreporthasbeenapprovedbyRobertCarter,P.eng.,hudbay’sdirector,TechnicalServices.Messrs.MeagherandCarterarequalifiedpersonspursuanttonationalInstrument43-101–StandardsofdisclosureforMineralProjects.

Forward-looking informationThisannualreportcontains“forward-lookingstatements”and“forward-lookinginformation”(collectively,“forward-lookinginformation”)withinthemeaningofapplicableCanadianandUnitedStatessecuritieslegislation.Allinformationcontainedinthisannualreport,otherthanstatementsofcurrentandhistoricalfact,isforward-lookinginformation.often,butnotalways,forward-lookinginformationcanbeidentifiedbytheuseofwordssuchas“plans”,“expects”,“budget”,“guidance”,“scheduled”,“estimates”,“forecasts”,“strategy”,“target”,“intends”,“objective”,“goal”,“understands”,“anticipates”and“believes”(andvariationsoftheseorsimilarwords)andstatementsthatcertainactions,eventsorresults“may”,“could”,“would”,“should”,“might”“occur”or“beachieved”or“willbetaken”(andvariationsoftheseorsimilarexpressions).Alloftheforward-lookinginformationinthisannualreportisqualifiedbythiscautionarynote.

Forward-lookinginformationincludes,butisnotlimitedto,statementswithrespecttohudbay’sobjectives,strategies,intentions,expectationsandguidanceandfuturefinancialandoperatingperformanceandprospects,hudbay’sexpectationastotheuseofproceedsfromtherecentlycompletedequityoffering,productionathudbay’s777,LalorandReedminesandinitialproductionfromtheConstanciaproject,continuedprocessingathudbay’sFlinFlonconcentrator,SnowLakeconcentratorandFlin Flonzincplant,hudbay’sabilitytocompletethedevelopmentofitsLalor,ConstanciaandReedprojectsandtheanticipatedscopeandcostofanydevelopmentplansfortheseprojects,anticipatedtimingofhudbay’sprojectsandeventsthatmayaffecthudbay’sprojects,includingtheanticipatedissueofrequiredlicences,ourexpectationthathudbaywillreceivetheremainingdepositamountsunderouramendedpreciousmetalsstreamtransactionwithSilverwheatonCorp.andadditionalfundingunderhudbay’sequipmentfinancingtransactionwithCaterpillarFinancialServicesCorporation,expectationswithrespecttoadditionalcreditfacilities,theanticipatedeffectofexternalfactorsonrevenue,suchascommodityprices,anticipatedexplorationanddevelopmentexpendituresandactivitiesandthepossiblesuccessofsuchactivities,estimationofmineralreservesandresources,minelifeprojections,timingandamountofestimatedfutureproduction,reclamationcosts,economicoutlook,governmentregulationofminingoperations,andbusinessandacquisitionstrategies.

Forward-lookinginformationisnot,andcannotbe,aguaranteeoffutureresultsorevents.Forward-lookinginformationisbasedon,amongotherthings,opinions,assumptions,estimatesandanalysesthat,whileconsideredreasonablebyusatthedatetheforward-lookinginformationisprovided,inherentlyaresubjecttosignificantrisks,uncertainties,contingenciesandotherfactorsthatmaycauseactualresultsandeventstobemateriallydifferentfromthoseexpressedorimpliedbytheforward-lookinginformation.ThematerialfactorsorassumptionsthathudbayidentifiedandwereappliedbytheCompanyindrawingconclusionsormakingforecastsorprojectionssetoutintheforward-lookinginformationinclude,butarenotlimitedto:

• thesuccessofmining,processing,explorationanddevelopmentactivities;• theaccuracyofgeological,miningandmetallurgicalestimates;• thecostsofproduction;• thesupplyanddemandformetalshudbayproduces;• nosignificantandcontinuingadversechangesinfinancialmarkets,includingcommoditypricesandforeignexchangerates;• thesupplyandavailabilityofconcentrateforhudbay’sprocessingfacilities;• thesupplyandavailabilityofreagentsforhudbay’sconcentrators;• theavailabilityofthird-partyprocessingfacilitiesforhudbay’sconcentrate;• thesupplyandavailabilityofallformsofenergyandfuelsatreasonableprices;• theavailabilityoftransportationservicesatreasonableprices;• nosignificantunanticipatedoperationalortechnicaldifficulties;• theexecutionofhudbay’sbusinessandgrowthstrategies,includingthesuccessofhudbay’sstrategicinvestmentsandinitiatives;• theavailabilityoffinancingforhudbay’sexplorationanddevelopmentprojectsandactivities;• theabilitytocompleteprojecttargetsontimeandonbudgetandothereventsthatmayaffecthudbay’sabilitytodevelopitsprojects;• thetimingandreceiptofvariousregulatoryandgovernmentalapprovals;• theavailabilityofpersonnelforhudbay’sexploration,developmentandoperationalprojectsandongoingemployeerelations;• hudbay’sabilitytosecurerequiredlandrightstocompleteitsConstanciaproject;• maintaininggoodrelationswiththecommunitiesinwhichhudbayoperates,includingthecommunitiessurroundingtheConstanciaprojectandFirstnations

communitiessurroundingtheLalorandReedprojects;• nosignificantunanticipatedchallengeswithstakeholdersathudbay’svariousprojects;• nosignificantunanticipatedeventsorchangesrelatingtoregulatory,environmental,healthandsafetymatters;• nocontestsovertitletohudbay’sproperties,includingasaresultofrightsorclaimedrightsofAboriginalpeoples;• thetimingandpossibleoutcomeofpendinglitigationandnosignificantunanticipatedlitigation;• certaintaxmatters,including,butnotlimitedto,currenttaxlawsandregulationsandtherefundofcertainvalueaddedtaxesfromtheCanadianandPeruvian

governments;and• nosignificantandcontinuingadversechangesingeneraleconomicconditionsorconditionsinthefinancialmarkets.

Therisks,uncertainties,contingenciesandotherfactorsthatmaycauseactualresultstodiffermateriallyfromthoseexpressedorimpliedbytheforward-lookinginformationmayinclude,butarenotlimitedto,thefailuretoobtaintherequiredapprovalsorclearancesfromgovernmentauthoritiesonatimelybasis,risksgenerallyassociatedwiththeminingindustry,suchaseconomicfactors(includingfuturecommodityprices,currencyfluctuations,energypricesandgeneralcostescalation),uncertaintiesrelatedtothedevelopmentandoperationofhudbay’sprojects(includingtheimpactonprojectcostandscheduleofconstructiondelaysandunforeseenrisksandotherfactorsbeyondhudbay’scontrol),depletionofhudbay’sreserves,risksrelatedtopoliticalorsocialunrestorchangeandthoseinrespectofAboriginalandcommunityrelations,rightsandtitleclaims,operationalrisksandhazards,includingunanticipatedenvironmental,industrialandgeologicaleventsanddevelopmentsandtheinabilitytoinsureagainstallrisks,failureofplant,equipment,processes,transportationandotherinfrastructuretooperateasanticipated,compliancewithgovernmentandenvironmentalregulations,includingpermittingrequirementsandanti-briberylegislation,dependenceonkeypersonnelandemployeerelations,volatilefinancialmarketsthatmayaffecthudbay’sabilitytoobtainfinancingonacceptableterms,uncertaintiesrelatedtothegeology,continuity,gradeandestimatesofmineralreservesandresourcesandthepotentialforvariationsingradeandrecoveryrates,uncertaincostsofreclamationactivities,hudbay’sabilitytocomplywithhudbay’spensionandotherpost-retirementobligations,hudbay’sabilitytoabidebythecovenantsinhudbay’sdebtinstrumentsorothermaterialcontracts,taxrefunds,hedgingtransactions,aswellastherisksdiscussedundertheheading“RiskFactors”inhudbay’sManagement’sdiscussionandAnalysisforthefourthquarterof2013.

Shouldoneormorerisk,uncertainty,contingencyorotherfactormaterializeorshouldanyfactororassumptionproveincorrect,actualresultscouldvarymateriallyfromthoseexpressedorimpliedintheforward-lookinginformation.Accordingly,youshouldnotplaceunduerelianceonforward-lookinginformation.hudbaydoesnotassumeanyobligationtoupdateorreviseanyforward-lookinginformationafterthedateofthisannualreportortoexplainanymaterialdifferencebetweensubsequentactualeventsandanyforward-lookinginformation,exceptasrequiredbyapplicablelaw.

note to united states investorsThisannualreporthasbeenpreparedinaccordancewiththerequirementsofthesecuritieslawsineffectinCanada,whichdiffermateriallyfromtherequirementsofUnitedStatessecuritieslawsapplicabletoUSissuers.

InformationconcerningourmineralpropertieshasbeenpreparedinaccordancewiththerequirementsofCanadiansecuritieslaws,whichdifferinmaterialrespectsfromtherequirementsoftheSecuritiesandexchangeCommission(the“SeC”)setforthinIndustryguide7.UndertheSeC’sIndustryguide7,mineralizationmaynotbeclassifiedasa“reserve”unlessthedeterminationhasbeenmadethatthemineralizationcouldbeeconomicallyandlegallyproducedorextractedatthetimeofthereservedetermination,andtheSeCdoesnotrecognizethereportingofmineraldepositswhichdonotmeettheSeCIndustryguide7definitionof“Reserve”.InaccordancewithnationalInstrument43-101–StandardsofdisclosureforMineralProjects(“nI43-101”)oftheCanadianSecuritiesAdministrators,theterms“mineralreserve”,“provenmineralreserve”,“probablemineralreserve”,“mineralresource”,“measuredmineralresource”,“indicatedmineralresource”and“inferredmineralresource”aredefinedintheCanadianInstituteofMining,MetallurgyandPetroleum(the“CIM”)definitionStandardsforMineralResourcesandMineralReservesadoptedbytheCIMCouncilondecember11,2005.whiletheterms“mineralresource”,“measuredmineralresource”,“indicatedmineralresource”and“inferredmineralresource”arerecognizedandrequiredbynI43-101,theSeCdoesnotrecognizethem.youarecautionedthat,exceptforthatportionofmineralresourcesclassifiedasmineralreserves,mineralresourcesdonothavedemonstratedeconomicvalue.Inferredmineralresourceshaveahighdegreeofuncertaintyastotheirexistenceandastowhethertheycanbeeconomicallyorlegallymined.Itcannotbeassumedthatalloranypartofaninferredmineralresourcewilleverbeupgradedtoahighercategory.Therefore,youarecautionednottoassumethatalloranypartofaninferredmineralresourceexists,thatitcanbeeconomicallyorlegallymined,orthatitwilleverbeupgradedtoahighercategory.Likewise,youarecautionednottoassumethatalloranypartofmeasuredorindicatedmineralresourceswilleverbeupgradedintomineralreserves.youshouldconsidercloselythedisclosureontheminingindustrytechnicaltermsinScheduleA“glossaryofMiningTerms”ofourAnnualInformationFormforthefiscalyearendeddecember31,2013,availableonSedARatwww.sedar.comandincorporatedbyreferenceasexhibit99.1inourForm40-FfiledonedgARonMarch31,2014(Fileno.001-34244).


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Hudbay25yorkStreetSuite 800Toronto, OntarioM5J2V5Telephone:416362-8181Facsimile:416362-7844

ListingTorontoStockexchangenewyorkStockexchangebVL(LimaStockexchange)TradingSymbol:hbM

Investor RelationsCandacebrûlédirector,[email protected]

Media InquiriesScottbrubacherdirector,CorporateCommunications416814-4373scott.brubacher@hudbayminerals.com

Transfer Agentequity Financial Trust Company 200UniversityAvenueSuite 400Toronto, Ontario M5H 4H1Telephone:416361-0930TollFree:1866393-4891Facsimile:416361-0470

AuditorsdeloitteLLP181bayStreetSuite 1400 Toronto, Ontario M5J2V1

Annual and Special Meeting of ShareholdersMay 8, 2014, 10 a.m. eTToronto, Ontario

Documents

plan in aCtion...Equity attributable to owners of the Company $ 1,635.6 $ 1,653.8 Cash and cash equivalents $ 631.4 $ 1,337.1 Dividend paid per share $ 0.11 $ 0.20 Commodity exposure