Hudbay Minerals Inc (HBM) 2023 Q1 法說會逐字稿

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Hudbay Minerals Inc. First Quarter 2023 Results Conference Call. (Operator Instructions) I would like to remind everyone that this conference call is being recorded today, May 9, 2023, at 8:30 a.m. Eastern Time.

早上好，女士們，先生們。謝謝你的支持。歡迎參加 Hudbay Minerals Inc. 2023 年第一季度業績電話會議。 （操作員說明）我想提醒大家，今天，2023 年 5 月 9 日，東部時間上午 8 點 30 分正在錄製此電話會議。

I will now turn the conference over to Candace Brule, Vice President, Investor Relations. Please go ahead.

我現在將會議轉交給投資者關係副總裁 Candace Brule。請繼續。

Thank you, operator. Good morning, and welcome to Hudbay's 2023 First Quarter Results Conference Call. Hudbay's financial results were issued yesterday and are available on our website at www.hudbay.com. A corresponding PowerPoint presentation is available on the Investor Events section of our website, and we encourage you to refer to it during this call. Our presenter today is Peter Kukielski, Hudbay's President and Chief Executive Officer. Accompanying Peter for the Q&A portion of the call will be Eugene Lei, our Chief Financial Officer; and Andre Lauzon, our Chief Operating Officer.

謝謝你，運營商。早上好，歡迎來到 Hudbay 的 2023 年第一季度業績電話會議。 Hudbay 的財務業績於昨天發布，可在我們的網站 www.hudbay.com 上查閱。我們網站的投資者活動部分提供了相應的 PowerPoint 演示文稿，我們鼓勵您在本次電話會議期間參考它。我們今天的主持人是 Hudbay 的總裁兼首席執行官 Peter Kukielski。陪同 Peter 參加電話問答部分的是我們的首席財務官 Eugene Lei；和我們的首席運營官 Andre Lauzon。

Please note that comments made on today's call may contain forward-looking information, and this information, by its nature, is subject to risks and uncertainties, and as such, actual results may differ materially from the views expressed today. For further information on these risks and uncertainties, please consult comes relevant filings on SEDAR and EDGAR. These documents are also available on our website. As a reminder, all amounts discussed on today's call are in U.S. dollars unless otherwise noted.

請注意，對今天的電話會議發表的評論可能包含前瞻性信息，而這些信息就其性質而言具有風險和不確定性，因此，實際結果可能與今天表達的觀點存在重大差異。有關這些風險和不確定性的更多信息，請參閱 SEDAR 和 EDGAR 的相關文件。這些文件也可以在我們的網站上找到。提醒一下，除非另有說明，否則今天電話會議上討論的所有金額均以美元為單位。

And now I'll pass the call over to Peter Kukielski.

現在我將把電話轉給 Peter Kukielski。

Thank you, Candace. Good morning, everyone, and thank you for joining us. In today's presentation, I'll discuss our first quarter results, touch on the operating and financial performance of the business and provide some insight into recent strategic initiatives and corporate achievements. As I've said before, I truly believe one of Hudbay's greatest strength is our disproportionately talented team for a company of our size. To complement this team, we brought in Warren Flannery as Vice President, Business Planning and Reclamation.

謝謝你，坎迪斯。大家早上好，感謝您加入我們。在今天的演講中，我將討論我們第一季度的業績，涉及企業的運營和財務業績，並對近期的戰略舉措和企業成就提供一些見解。正如我之前所說，我真的相信 Hudbay 最大的優勢之一是我們擁有與我們這樣規模的公司不成比例的才華橫溢的團隊。為了補充這個團隊，我們聘請了 Warren Flannery 擔任業務規劃和復墾副總裁。

His experience will be a welcome addition to our organization to enhance our capital planning and operation strategy as well as reclamation and management of nonproducing facilities. In the quarter, we promoted Javier del Rio to Senior Vice President, South America and U.S.A. and Olivier Tavchandjian to Senior Vice President, Exploration and Technical Services. These team members will be instrumental in continuing to drive our strategic initiatives. In the first quarter, we took some meaningful steps to position the business to deliver sustainable cash flow through disciplined capital allocation and to expand our copper production profile. We continue to focus on our commitment to maintain a strong culture of safety and commitment to our local communities while improving our low carbon footprint.

他的經驗將成為我們組織的一個受歡迎的補充，以加強我們的資本規劃和運營戰略以及非生產設施的回收和管理。本季度，我們將 Javier del Rio 提升為南美和美國高級副總裁，將 Olivier Tavchandjian 提升為勘探和技術服務高級副總裁。這些團隊成員將有助於繼續推動我們的戰略舉措。在第一季度，我們採取了一些有意義的措施來定位業務，以通過有紀律的資本配置提供可持續的現金流，並擴大我們的銅生產規模。我們將繼續專注於維持強大的安全文化和對當地社區的承諾，同時改善我們的低碳足跡。

The team successfully navigated the recent Peru logistical interruptions to achieve a very strong start towards meeting our full-year operating and cost guidance at Constancia, and we are executing debottlenecking initiatives to increase the output from our Lalor mine in Snow Lake. We took several prudent measures this quarter to improve our free cash flow for 2023, and we remain focused on being disciplined with capital allocation as we continue to derisk our Copper World project in Arizona. We also see an opportunity to diversify our operating portfolio and expand our copper production scale with the recently announced agreement to combine with Copper Mountain in British Columbia, which is expected to close in late June. We are well positioned to deliver sustainable cash flow from our operating portfolio as well as to drive organic growth through advancing our leading organic copper pipeline.

該團隊成功應對了最近秘魯的物流中斷，為實現我們在 Constancia 的全年運營和成本指導目標取得了良好的開端，並且我們正在執行去瓶頸計劃，以增加我們位於雪湖的 Lalor 礦的產量。本季度我們採取了幾項審慎措施來改善 2023 年的自由現金流，並且在我們繼續降低亞利桑那州 Copper World 項目的風險時，我們仍然專注於遵守資本配置的紀律。我們還看到了多元化我們的經營組合和擴大我們的銅生產規模的機會，最近宣布與不列顛哥倫比亞省的 Copper Mountain 合併，該協議預計將於 6 月下旬完成。我們有能力從我們的運營組合中提供可持續的現金流，並通過推進我們領先的有機銅管道來推動有機增長。

Moving to the first quarter results on Slide 3. First quarter consolidated production was in line with our expectations and is on track for stronger production levels in the second half of 2023. Consequently, we are reaffirming our 2023 production guidance for all metals. Consolidated copper production was 23,000 tonnes, a decrease compared to the fourth quarter primarily due to lower copper grades in Peru as planned. Consolidated gold production was 47,000 ounces, a decrease primarily due to lower gold grades in Peru, partially offset by higher throughput and gold recoveries in Snow Lake.

轉到幻燈片 3 上的第一季度業績。第一季度綜合產量符合我們的預期，並有望在 2023 年下半年實現更高的生產水平。因此，我們重申我們對所有金屬的 2023 年生產指導。綜合銅產量為 23,000 噸，與第四季度相比有所下降，主要原因是秘魯的銅品位按計劃降低。綜合黃金產量為 47,000 盎司，下降的主要原因是秘魯的黃金品位較低，部分被雪湖較高的吞吐量和黃金回收率所抵消。

Consolidated zinc production was approximately 10,000 tonnes higher than the fourth quarter, primarily due to improved zinc grades and throughput in Snow Lake. Consolidated copper cash costs improved to $0.85 per pound from $1.08 in the prior quarter, primarily as a result of lower mining and freight costs and higher byproduct credits, partially offset by lower copper production. Similarly, copper sustaining cash costs declined to $1.83 per pound, a decrease from the fourth quarter due to lower sustaining capital expenditures and capitalized exploration. Both measures are anticipated to continue to decline in future quarters with higher production and precious metal byproducts, and we reaffirm our 2023 consolidated cash costs and sustaining cash cost guidance.

綜合鋅產量比第四季度高出約 10,000 噸，這主要是由於鋅品位和雪湖吞吐量的提高。綜合銅現金成本從上一季度的每磅 1.08 美元提高至每磅 0.85 美元，這主要是由於採礦和運輸成本降低以及副產品信貸增加，部分被銅產量下降所抵消。同樣，銅維持現金成本下降至每磅 1.83 美元，較第四季度有所下降，原因是維持資本支出和勘探資本化減少。隨著產量和貴金屬副產品的增加，這兩項措施預計在未來幾個季度將繼續下降，我們重申我們的 2023 年綜合現金成本和維持現金成本指導。

First quarter operating cash flow before changes in nonworking capital was $86 million and adjusted EBITDA was $102 million. This was a decline from the fourth quarter as a result of lower copper and zinc sales volumes, partially offset by higher realized prices. With a focus on generating positive cash flow and strong returns on invested capital in 2023, we are committed to deleveraging and disciplined capital allocation. This is demonstrated through several prudent measures we took this quarter to improve cash flow.

第一季度非營運資本變動前的運營現金流為 8600 萬美元，調整後的 EBITDA 為 1.02 億美元。這是由於銅和鋅銷量下降導致的第四季度下降，部分被實現價格上漲所抵消。著眼於在 2023 年產生正現金流和強勁的投資資本回報，我們致力於去槓桿化和有紀律的資本配置。這通過我們本季度為改善現金流而採取的幾項審慎措施得到證明。

First, our Peru time reduced concentrate inventory levels at site well ahead of schedule, which helped to improve operating cash flow during the quarter. Second, in an effort to ensure we receive full exposure to the strong gold prices, we amended our gold forward sale and prepay agreements to defer 8 months of delivery starting with February 2023 into 2024. This is expected to increase our 2023 cash position by approximately $53 million to support our continued focus on reducing net debt. Third, as an additional prudent measure to ensure free cash flow generation and financial discipline, we extended our existing quotational period hedging program for approximately 8,000 tonnes of contained copper in the previously unsold concentrate inventory in Peru to lock in prevailing copper prices. We also entered into a zero-cost collar program in April for approximately 10% of copper production expected in the second half of 2023. The program establishes a floor price of $3.95 per pound and upside to $4.28 per pound. And lastly, we are on track to deliver our discretionary spending reduction targets by reducing growth capital and exploration spending by $65 million in 2023 compared to 2022. At the end of the first quarter, our liquidity include $256 million in cash and $355 million in undrawn availability under our revolving credit facilities.

首先，我們在秘魯的時間大大提前降低了現場的精礦庫存水平，這有助於改善本季度的經營現金流。其次，為了確保我們充分接觸到堅挺的金價，我們修改了黃金遠期銷售和預付款協議，將 2023 年 2 月開始的 8 個月交割推遲到 2024 年。預計這將使我們 2023 年的現金頭寸增加約5300 萬美元用於支持我們繼續專注於減少淨債務。第三，作為確保自由現金流產生和財務紀律的額外審慎措施，我們延長了現有的報價期套期保值計劃，以鎖定秘魯先前未售出的精礦庫存中約 8,000 噸含銅，以鎖定現行銅價。我們還在 4 月份實施了一項零成本項圈計劃，預計 2023 年下半年的銅產量約為 10%。該計劃將底價定為每磅 3.95 美元，上行價為每磅 4.28 美元。最後，與 2022 年相比，我們有望在 2023 年將增長資本和勘探支出減少 6500 萬美元，從而實現我們的可自由支配支出削減目標。第一季度末，我們的流動資金包括 2.56 億美元現金和 3.55 億美元未動用資金我們的循環信貸設施下的可用性。

Moving to Slide 4 to summarize our Peru operating results. During the first quarter, Constancia produced 21,000 tonnes of copper, 11,000 ounces of gold and 552,000 ounces of silver. Production levels were lower than in the fourth quarter of 2022 due to lower grades from the processing of stockpiles. This was anticipated as part of our mitigation efforts during a period of logistical interruptions from Peru Civil unrest in early 2023. I'm very pleased with and proud of the team's efforts to successfully navigate the complex environment in Peru. In the face of supply chain disruptions, the team has done a tremendous job to ensure that Constancia maintains steady operations and strong cost control during the first quarter.

轉到幻燈片 4 來總結我們在秘魯的經營業績。第一季度，Constancia 生產了 21,000 噸銅、11,000 盎司黃金和 552,000 盎司白銀。由於庫存加工的品級較低，生產水平低於 2022 年第四季度。在 2023 年初秘魯內亂導致後勤中斷期間，我們預計這是緩解措施的一部分。我對團隊為成功駕馭秘魯複雜環境所做的努力感到非常高興和自豪。面對供應鏈中斷，團隊做了大量工作以確保 Constancia 在第一季度保持穩定的運營和強大的成本控制。

The teams continue to operate safely and with the support from our local communities. Transportation logistics have normalized since mid-February, and we have significantly reduced concentrate inventory buildup at the mine. All mine from Pampacancha in the first quarter was 897,000 tons at record-high grades of 0.49% copper and 0.52 grams per tonne gold. Despite this achievement, total ore mined in the first quarter was lower than the prior quarter due to processing of stockpiles in order to conserve fuel during the civil unrest period. The logistical risk mitigation plans implemented during the first quarter, together with strong continued support from the local communities, enabled our plants to continue to operate uninterrupted at full capacity, supplemented with approximately 3.9 million tonnes of stockpile ore.

這些團隊在我們當地社區的支持下繼續安全運作。自 2 月中旬以來，運輸物流已恢復正常，我們已顯著減少了礦山的精礦庫存。第一季度來自 Pampacancha 的所有礦山為 897,000 噸，銅品位為 0.49%，黃金品位為 0.52 克/噸，創歷史新高。儘管取得了這一成就，但由於在內亂期間為了節省燃料而對庫存進行了處理，因此第一季度開采的礦石總量低於上一季度。第一季度實施的物流風險緩解計劃，加上當地社區的持續大力支持，使我們的工廠能夠繼續不間斷地滿負荷運營，並補充了約 390 萬噸的礦石庫存。

Recoveries of all metals during the first quarter were lower than the fourth quarter due to higher levels of impurities in stockpile ore. Full mining activities resumed in the Pampacancha pit in February and the planned period of higher stripping from March to June is progressing well with mining of higher-grade ore now expected to commence late in the second quarter, slightly ahead of the original schedule. We are on track to achieve full-year 2023 Peru production guidance with expected production to be higher in the second half of the year following the period of higher stripping activities in the Pampacancha Pit in the second quarter. Unit operating costs in the first quarter was 16% lower than the fourth quarter, primarily due to lower mining costs. Peru's cash costs for the first quarter were relatively unchanged from the prior quarter at $1.36 per pound. Cash costs are expected to decline to be within the 2023 guidance range with higher expected copper production and contributions from precious metal byproduct credits later this year. Sustaining cash costs were also relatively in line with the fourth quarter at $2.12 per pound as lower mining costs and capitalized exploration were offset by lower copper production.

由於庫存礦石中雜質含量較高，第一季度所有金屬的回收率均低於第四季度。 2 月，Pampacancha 礦坑全面恢復採礦活動，計劃中的 3 月至 6 月的高剝離期進展順利，高品位礦石的開採現在預計將在第二季度末開始，略早於原定計劃。我們有望實現秘魯 2023 年全年的生產指導，預計在第二季度 Pampacancha 礦坑的剝離活動增加後，下半年的產量將更高。第一季度的單位運營成本比第四季度低 16%，主要是由於採礦成本降低。秘魯第一季度的現金成本與上一季度基本持平，為每磅 1.36 美元。預計現金成本將下降至 2023 年的指導範圍內，原因是今年晚些時候預期銅產量增加以及貴金屬副產品信貸的貢獻。維持現金成本也與第四季度相對一致，為每磅 2.12 美元，因為較低的採礦成本和資本化勘探被較低的銅產量所抵消。

Moving to the next slide on Manitoba. Production at our Snow Lake operations included 36,000 ounces of gold, roughly 10,000 tonnes of zinc, 2,000 tonnes of copper and 151,000 ounces of silver. Production of gold, zinc and silver were higher than in the fourth quarter with higher throughput and higher grades. Copper production was lower than the prior quarter due to lower head grades with the completion of a number of key initiatives aimed to support higher production levels at Lalor, improved metal recoveries at the mills and prioritization of mining higher gold grade zones at Lalor throughput the year. Full-year Manitoba production of all metals remains on track to achieve guidance ranges for 2023.

轉到下一張關於馬尼托巴省的幻燈片。我們 Snow Lake 業務的產量包括 36,000 盎司黃金、約 10,000 噸鋅、2,000 噸銅和 151,000 盎司銀。黃金、鋅和白銀的產量高於第四季度，吞吐量更高，品位更高。銅產量低於上一季度，原因是原礦品位較低，完成了一系列旨在支持 Lalor 更高生產水平的關鍵舉措，提高了工廠的金屬回收率，並優先考慮在 Lalor 當年吞吐量較高的黃金品位區開採.馬尼托巴省所有金屬的全年產量仍有望實現 2023 年的指導範圍。

All-minded Lalor was slightly higher than the prior quarter despite being impacted by stope fragmentation issues that created delays at the rock breaker and low stope availability in March. We implemented changes to improve stope fragmentation and stope availability, which, together with the many production optimization initiatives underway at Lalor resulted in Lalor achieving higher production levels of 4,800 tonnes per day late in the first quarter and throughout April. The Manitoba team continues to advance key initiatives to support higher production levels and improved metal recoveries and have made significant progress in building long-holding inventory, optimizing the development drift size and focusing on shaft availability improvements while minimizing inefficient trucking via the ramp.

All-minded Lalor 略高於上一季度，儘管受到採場碎片化問題的影響，這些問題導致 3 月份岩石破碎機延遲和採場可用性低。我們實施了改變以改善採場碎片化和採場可用性，這與 Lalor 正在進行的許多生產優化計劃一起導致 Lalor 在第一季度末和整個 4 月實現了每天 4,800 噸的更高生產水平。馬尼托巴團隊繼續推進關鍵舉措，以支持更高的生產水平和提高金屬回收率，並在建立長期持有庫存、優化開發巷道規模和專注於提高豎井可用性方面取得了重大進展，同時最大限度地減少通過坡道進行的低效卡車運輸。

The first phase of The Stall mill recovery project, consisting of new cyclone packs, state-of-the-art Amazon sells in the copper and zinc circuits and process control improvements is on track for commissioning in May with ramp-up to higher metal recoveries by mid-2023. The Stall mill processed 19% more ore in the first quarter compared to last quarter. The New Britannia mill continued to achieve consistent production above its nameplate capacity, averaging approximately 1,590 tonnes per day. We continue to advance New Britannia improvements focused on reducing reagents and grinding media consumption. These initiatives entail minimal capital outlays, while further improving overall metal recoveries and copper concentrate grades. Combined unit operating costs in the first quarter decreased by 10% compared to the fourth quarter as a result of higher throughput arising from our production efficiency initiatives. Manitoba's gold cash costs were $938 per ounce, slightly higher than in the fourth quarter due to lower by-product credits and higher G&A, partly offset by higher gold production. Full-year cash costs are expected to decline to be within the 2023 guidance range with increasing gold production throughout the year from higher grades and output at Lalor and the planned completion of the store recovery project in the second quarter. Gold sustaining cash costs were $1,336 per ounce lower than the fourth quarter, primarily due to lower sustaining capital expenditures.

The Stall 工廠回收項目的第一階段，包括新的旋風分離器包、最先進的亞馬遜在銅和鋅迴路中的銷售以及過程控制改進，有望在 5 月投入使用，以提高金屬回收率到 2023 年年中。與上一季度相比，Stall 工廠第一季度加工的礦石量增加了 19%。 New Britannia 工廠繼續實現高於其銘牌產能的穩定生產，平均每天約 1,590 噸。我們繼續推進 New Britannia 的改進，重點是減少試劑和研磨介質的消耗。這些舉措需要最少的資本支出，同時進一步提高整體金屬回收率和銅精礦品位。由於我們的生產效率舉措帶來更高的吞吐量，第一季度的綜合單位運營成本比第四季度下降了 10%。馬尼托巴省的黃金現金成本為每盎司 938 美元，略高於第四季度，原因是副產品信貸減少和 G&A 增加，部分被黃金產量增加所抵消。全年現金成本預計將下降至 2023 年的指導範圍內，因為全年黃金產量因更高品位和 Lalor 的產量而增加，並且計劃在第二季度完成商店恢復項目。黃金維持現金成本比第四季度低 1,336 美元/盎司，這主要是由於維持資本支出減少。

On April 13, we entered into an agreement to acquire all of the issued and outstanding common shares of Copper Mountain Mining Corporation to create a premier Americas-focused copper mining company. The combined company will have annual copper production of 150,000 tonnes per year from 3 long-life mines and will have a world-class pipeline of organic copper growth projects. The combined company will represent the third largest copper producer in Canada based on 2023 estimated copper production. The transaction is expected to close by late June. This combination is on strategy, and it offers several strategic benefits, as shown on Slide 6.

4 月 13 日，我們達成協議，收購 Copper Mountain Mining Corporation 所有已發行和流通在外的普通股，以創建一家專注於美洲的一流銅礦開採公司。合併後的公司將擁有 3 個長壽命礦山每年 150,000 噸的銅產量，並將擁有世界一流的有機銅增長項目。根據 2023 年估計的銅產量，合併後的公司將成為加拿大第三大銅生產商。該交易預計將於 6 月下旬完成。這種組合是戰略性的，它提供了幾個戰略優勢，如幻燈片 6 所示。

First, Copper Mountain enhances the scale of our business with a total of 6 key operating and development assets and one of the largest copper mineral resource bases among our peer group. Second, it geographically balances our portfolio in top-tier jurisdictions. On a pro forma basis, the combined net asset value is estimated to be 55% from North America and 45% from South America on a street consensus basis. Third, it increases our exposure to copper with expected 2023 copper production of more than 150,000 tonnes. This is complemented by meaningful gold production that helps maintain a strong position on the copper cost curve.

首先，銅山擴大了我們的業務規模，共有 6 項主要經營和開發資產，是我們同行集團中最大的銅礦產資源基地之一。其次，它在地理上平衡了我們在頂級司法管轄區的投資組合。在備考基礎上，根據街頭共識，合併後的資產淨值估計為北美的 55% 和南美的 45%。第三，它增加了我們對銅的敞口，預計 2023 年銅產量將超過 150,000 噸。這與有意義的黃金生產相輔相成，有助於在銅成本曲線上保持強勢地位。

Fourth, we have a great opportunity to unlock value at the Copper Mountain Mine using our high-efficiency framework from our Constancia mine given the similarities between the 2 mines. Fifth, the combination provides incremental cash flows, which further strengthens the balance sheet and accelerates our deleveraging initiatives. And lastly, the combination will allow us to unlock value from a larger organic growth pipeline by more efficiently allocating capital to projects that yield the highest risk-adjusted returns. The combined company is well positioned to deliver sustainable cash flows with compelling organic growth as well as the valuation rerate as a larger, more diversified copper producer with enhanced liquidity. The transaction meets our stringent financial and strategic acquisition criteria for pursuing value-accretive opportunities and the incremental diversified cash flows will further strengthen our balance sheet and support both our deleveraging and growth initiatives. Turning to Slide 7.

第四，鑑於這兩個礦山之間的相似性，我們有一個很好的機會使用我們來自 Constancia 礦山的高效框架來釋放銅山礦山的價值。第五，合併提供增量現金流，進一步加強資產負債表並加速我們的去槓桿化舉措。最後，合併將使我們能夠通過更有效地將資本分配給產生最高風險調整後回報的項目，從而從更大的有機增長管道中釋放價值。合併後的公司處於有利地位，能夠通過令人信服的有機增長提供可持續的現金流，並作為一家規模更大、更多元化、流動性更強的銅生產商進行估值重估。該交易符合我們追求增值機會的嚴格財務和戰略收購標準，增量多元化現金流將進一步加強我們的資產負債表並支持我們的去槓桿化和增長計劃。轉到幻燈片 7。

We think there is substantial opportunity to unlock value at Copper Mountain for the benefit of all shareholders. One of our core competencies at Hudbay is operating efficiency as demonstrated by Constancia's leading cost position amongst copper mines in South America. Due to the similarities between Copper Mountain and Constancia, we see a tremendous opportunity to apply our team's core technical and operating capabilities and our high-efficiency framework to the Copper Mountain Mine. We estimate around $30 million of annual efficiencies and synergies.

我們認為，為了所有股東的利益，銅山有大量機會釋放價值。我們在 Hudbay 的核心競爭力之一是運營效率，正如 Constancia 在南美銅礦中的領先成本地位所證明的那樣。由於 Copper Mountain 和 Constancia 之間的相似性，我們看到了將我們團隊的核心技術和運營能力以及我們的高效框架應用於 Copper Mountain 礦山的巨大機會。我們估計每年的效率和協同效應約為 3000 萬美元。

This includes $10 million of annual corporate shared synergies and tax attributes, and we expect to achieve an estimated $20 million per year in operating cost improvements over time through the application of our framework, improving productivity, reducing costs and achieving consistent and stable operations at the Copper Mountain Mine. This further builds on the great work done by the team at site and the recent positive momentum experienced at the mine. Combined with Copper Mountain's leading technological and ESG practices, the operation will be positioned as an industry leader. We also believe we will benefit from sharing services across our Canadian assets. We've been pleased with the positive feedback we've received from shareholders of Hudbay and Copper Mountain as this transaction offers significant value for both sets of shareholders. Now moving to Slide 8.

這包括 1000 萬美元的年度企業共享協同效應和稅收屬性，我們預計通過應用我們的框架、提高生產力、降低成本並在銅山礦山。這進一步建立在團隊在現場所做的出色工作以及最近在礦山經歷的積極勢頭的基礎上。結合銅山領先的技術和 ESG 實踐，該業務將被定位為行業領導者。我們還相信，我們將受益於跨加拿大資產的共享服務。我們對從 Hudbay 和 Copper Mountain 的股東那裡收到的積極反饋感到高興，因為這項交易為雙方股東帶來了巨大的價值。現在轉到幻燈片 8。

We will have a strong presence across Tier 1 jurisdictions in the Americas with operating and development assets in Canada, the United States and Peru. We also have one of the best organic growth pipelines among our peer group, consisting of brownfield expansions and greenfield development and exploration opportunities. Our improved leverage profile and expanded operations as a result of the Copper Mountain combination will allow us to more efficiently allocate capital across our business to the highest risk-adjusted return projects to develop a steady stream of ongoing expansion opportunities. As we think about the combined portfolio, we expect to immediately pursue high-return and short-payback initiatives such as the completion of the first phase of The Stall mill recovery improvement program in Manitoba. Then we will be able to pursue low-risk, minimal capital brownfield expansions, such as throughput optimization at the Copper Mountain Mine and further store recovery improvement programs. Looking at our brownfield expansion opportunities, we're particularly excited about the deposits near Constancia.

我們將在美洲的一級司法管轄區擁有強大的影響力，在加拿大、美國和秘魯擁有運營和開發資產。我們還擁有同行中最好的有機增長管道之一，包括棕地擴張和綠地開發和勘探機會。由於 Copper Mountain 合併，我們改善的槓桿狀況和擴大的業務將使我們能夠更有效地在我們的業務中分配資本到風險調整後回報率最高的項目，以開發源源不斷的持續擴張機會。當我們考慮合併後的投資組合時，我們希望立即採取高回報和短期回報的舉措，例如完成曼尼托巴省 The Stall 工廠恢復改善計劃的第一階段。然後，我們將能夠進行低風險、資本最少的棕地擴張，例如銅山礦的吞吐量優化和進一步的商店恢復改進計劃。看看我們的棕地擴張機會，我們對康斯坦西亞附近的礦床感到特別興奮。

The first Maria Reyna sits on a line that joins (inaudible) and has a radiometric footprint that is not dissimilar to these mines in scale. Vale drilled 11 holes in the property over a decade ago, which all intersected copper mineralization starting at surface, including 160 meters of over 1% copper equivalent. The second, the Caballito mine previously operated by Mitsui until the early 1990s, has samples indicating the presence of high-grade copper. There is also a waste rock pile that is believed to have economic mineralization given that the historical mines cutoff grade was more than 1.5% copper. Enhancing our brownfield expansions will position the core business for future transformational initiatives such as our Copper World project and better positions us for the next wave of value-creating consolidation in the copper space.

第一個 Maria Reyna 位於一條連接（聽不清）的線上，其輻射足跡與這些地雷的規模沒有什麼不同。十多年前，淡水河谷在該物業鑽了 11 個孔，所有孔都從地表開始與銅礦化相交，包括 160 米超過 1% 的銅當量。第二個是 Mitsui 在 1990 年代初期之前經營的 Caballito 礦，其樣本表明存在高品位銅。考慮到歷史礦山邊界品位超過 1.5% 的銅，還有一個廢石堆被認為具有經濟礦化。加強我們的棕地擴張將使我們的核心業務定位於未來的轉型計劃，例如我們的銅世界項目，並使我們更好地為銅領域的下一波創造價值的整合浪潮做好準備。

Pre-feasibility activities for the private land Phase 1 of the Copper World projects are well advanced and the pre-feasibility study is expected to be released in mid-2023. Clearing and grading work to prepare for the future development of Copper World continues at site, including the construction of roads and other facilities. We commenced the permitting process for Copper World with the approval of a mined land reclamation plan back in May 2022. This approval by the Arizona state mine inspector was challenged in state court, but the challenge was dismissed in May 2023 as having no basis. We continue to expect to receive the 2 outstanding state permits in 2023, the Aquifer Protection Permit and an Air Quality Permit, and we are encouraged by the continued positive permitting outcomes for our Copper World project.

Copper World 項目私有土地一期的預可行性研究進展順利，預可行性研究預計將於 2023 年年中發布。為 Copper World 的未來發展做準備的清理和平整工作在現場繼續進行，包括道路和其他設施的建設。早在 2022 年 5 月，我們就開始了 Copper World 的許可程序，批准了一項採礦土地複墾計劃。亞利桑那州礦山檢查員的這項批准在州法院受到質疑，但該質疑於 2023 年 5 月被駁回，理由是沒有依據。我們繼續期望在 2023 年獲得 2 個未完成的州許可證，即含水層保護許可證和空氣質量許可證，我們對銅世界項目持續積極的許可結果感到鼓舞。

On receipt of these state-level permits, we will evaluate a bulk sample program to continue to derisk the project by testing grade continuity, variable cutoff effectiveness and metallurgical strategies. We also intend to initiate a minority joint venture partner process following receipt of permits, which will allow a potential joint venture partner to participate in the funding of definitive feasibility study activities in 2024 as well as in the final project designed for Copper World. The Mason project is a large greenfield copper deposit located in the historic Yerington District of Nevada and is one of the largest undeveloped copper porphyry deposits in North America. We completed a PEA in 2021, which demonstrated robust project economics from a 27-year mine life operation. We acquired nearby properties hosting several historical underground copper mines that were in production in the early 1900s. There is an opportunity to further enhance the project economics through exploration for higher-grade satellite deposits on our prospective land package near Mason. We expect to test these high-grade targets with an initial drill program planned for late 2023. Turning to Slide 9 for an update on our 2023 exploration initiatives.

收到這些州級許可後，我們將評估批量抽樣計劃，通過測試品位連續性、可變截止效率和冶金策略來繼續降低項目風險。我們還打算在獲得許可後啟動少數合資夥伴程序，這將允許潛在的合資夥伴參與 2024 年最終可行性研究活動的資金以及為 Copper World 設計的最終項目。 Mason 項目是位於內華達州歷史悠久的 Yererton 區的大型綠地銅礦床，是北美最大的未開發銅斑岩礦床之一。我們在 2021 年完成了初步經濟評估，展示了 27 年礦山運營的穩健項目經濟效益。我們收購了附近的房產，這些房產擁有幾個歷史悠久的地下銅礦，這些銅礦於 1900 年代初期投入生產。通過在 Mason 附近的預期土地包上勘探更高品位的衛星礦床，有機會進一步提高項目的經濟效益。我們希望通過計劃於 2023 年底進行的初步鑽探計劃來測試這些高品位目標。轉到幻燈片 9 以了解我們 2023 年勘探計劃的最新情況。

Peru exploration activities recommenced with a focus on drill permitting for our highly prospective satellite properties while evaluating the potential for reserve expansion at Constancia and Pampacancha through future mining phases. We are completing the limited drill program and technical evaluations at the Constancia deposit to confirm the economic viability of adding an additional mining phase on the current mine plan that would convert a portion of the mineral resources to mineral reserves. We're also completing a drill program at the Pampacancha deposit to test mineral reserve extension potential. The results from the drill programs and technical and economic evaluations are expected to be incorporated in the next annual mineral reserve and resource update. As mentioned earlier, the past-producing Caballito property and the highly prospective Maria Reyna property are located in close proximity to the Constancia processing facility.

秘魯的勘探活動重新開始，重點是為我們極具前景的衛星資產獲得鑽探許可，同時評估通過未來採礦階段在 Constancia 和 Pampacancha 擴大儲量的潛力。我們正在完成 Constancia 礦床的有限鑽探計劃和技術評估，以確認在當前礦山計劃中增加一個額外的採礦階段的經濟可行性，該階段將把部分礦產資源轉化為礦產儲量。我們還在 Pampacancha 礦床完成鑽探計劃，以測試礦產儲量擴展潛力。鑽探計劃以及技術和經濟評估的結果預計將納入下一個年度礦產儲量和資源更新。如前所述，過去生產的 Caballito 地產和極具前景的 Maria Reyna 地產位於康斯坦西亞加工廠附近。

We commenced early exploration activities at these sites after completing a surface rights exploration agreement with the community last year. Surface investigation activities together with baseline environmental and archeological activities necessary to support drill permit applications have been completed. Drill permit applications are expected to be submitted in the coming months. And in Manitoba, our Snow Lake exploration activities are prioritizing step-out drilling for new discoveries to support future growth in annual production and mine life extension.

去年與社區完成地表權勘探協議後，我們開始在這些地點進行早期勘探活動。地表調查活動以及支持鑽探許可申請所需的基線環境和考古活動已經完成。鑽探許可申請預計將在未來幾個月內提交。在曼尼托巴省，我們的雪湖勘探活動正在優先考慮新發現的步進鑽探，以支持未來年產量的增長和礦山壽命的延長。

Our 2023 winter exploration program intersected many occurrences of disseminated copper sulfides over 2 kilometers down plunge, indicating the proximity of copper-gold feeder zones similar to the deeper lenses at Lalor. The program included 4 drill rigs testing the down-plunge gold and copper extensions of the Lalor deposit in the first step-out drilling in the deeper zones at Lalor since the initial discovery in 2009. While assays are still pending, we will continue to analyze these results and perform additional geophysics to refine the next phase of drilling in 2024. One additional drill rig in Snow Lake is testing the geophysical anomaly located within 400 meters of the existing Lalor underground infrastructure. Four drill holes were completed during the winter drill program and assay results in the base metal and copper-gold mineralized intercepts identified from core logging or pending.

我們的 2023 年冬季勘探計劃在 2 公里以下的深度發現了許多瀰漫性銅硫化物，這表明銅金供給區與 Lalor 更深的透鏡體相似。該計劃包括 4 台鑽機，用於測試 Lalor 礦床自 2009 年首次發現以來在更深區域進行的第一次逐步鑽探中的金銅延伸部分。雖然化驗仍在進行中，但我們將繼續分析這些結果，並進行額外的地球物理，以改進 2024 年的下一階段鑽探。雪湖的另一台鑽機正在測試位於現有 Lalor 地下基礎設施 400 米範圍內的地球物理異常。在冬季鑽探計劃期間完成了四個鑽孔，並從岩心測井或待定的基礎金屬和銅金礦化截獲物中獲得化驗結果。

To close off, I'd like to reiterate our commitment to operating in a manner that demonstrates our focus on the environment, and we are proud of our already low carbon footprint. As seen on Slide 10, our climate change initiatives include committing to achieve net zero greenhouse gas emissions by 2050, with an interim target of a 50% reduction in Scope 1 and Scope 2 emissions by 2030. We've identified multiple opportunities through our emissions reduction roadmap to achieve further reductions across the business. In the first quarter of 2023, we completed 2 initiatives that will lead to further carbon footprint reductions. First, we signed a new 10-year power purchase agreement with ENGIE Peru for access to a 100% renewable energy supplier for our Constancia operation starting in January 2026.

最後，我想重申我們致力於以表明我們對環境的關注的方式運營，我們為我們已經很低的碳足跡感到自豪。如幻燈片 10 所示，我們的氣候變化舉措包括承諾到 2050 年實現溫室氣體淨零排放，中期目標是到 2030 年將範圍 1 和範圍 2 的排放量減少 50%。我們通過我們的排放確定了多個機會減少路線圖，以實現整個企業的進一步減少。 2023 年第一季度，我們完成了 2 項舉措，進一步減少了碳足跡。首先，我們與 ENGIE Peru 簽署了一份新的 10 年購電協議，從 2026 年 1 月開始，為我們的 Constancia 運營提供 100% 可再生能源供應商。

The move to this new provider is expected to reduce total current company-wide Scope 1 and Scope 2 greenhouse gas emissions by 40% during the life of the contract, positioning the company well to achieve our 2030 climate change target of 50% emission reductions. The second will be to integrate Copper Mountain's leading climate change initiatives into Hudbay's framework to further improve our carbon footprint. The Copper Mountain Mine has the potential to be the lowest emitting open pit copper mine in the world by 2035 through the implementation of several net zero carbon initiatives. This includes their recent successful commissioning of electric trial assist haulage. They are also actively testing and researching renewable diesel, hydrogen, battery and fuel cell technology for haulage. We'll have the ability to apply Copper Mountains expertise in carbon reduction initiatives to the Constancia mine and the Copper World project. I'll conclude the presentation on Slide 11.

與這家新供應商的合作預計將在合同有效期內將全公司當前的範圍 1 和範圍 2 溫室氣體排放總量減少 40%，從而使公司能夠很好地實現我們 2030 年減排 50% 的氣候變化目標。第二個是將 Copper Mountain 領先的氣候變化倡議整合到 Hudbay 的框架中，以進一步改善我們的碳足跡。通過實施多項淨零碳計劃，到 2035 年，銅山礦有可能成為世界上排放量最低的露天銅礦。這包括他們最近成功調試的電動試驗輔助運輸。他們還積極測試和研究用於運輸的可再生柴油、氫氣、電池和燃料電池技術。我們將有能力將 Copper Mountains 在碳減排計劃方面的專業知識應用於 Constancia 礦山和 Copper World 項目。我將在幻燈片 11 上結束演示。

We believe that copper has the best long-term supply-demand fundamentals in the sector as global copper mine supply will be unable to meet demand from global decarbonization initiatives. Hudbay is uniquely positioned to benefit from the strong outlook for copper with attractive copper production growth and significant long-term optionality for investors through our leading organic growth pipeline. With the addition of the Copper Mountain Mine, we will be well positioned to re-rate towards our larger base metal peers with enhanced production, trading liquidity and scale. Tideway offers investors the highest near-term free cash flow yields, coupled with significant long-term upside through our leading copper mineral resource base. And with that, we're pleased to take your questions.

我們認為，由於全球銅礦供應將無法滿足全球脫碳計劃的需求，銅在該行業具有最佳的長期供需基本面。 Hudbay 擁有獨特的優勢，可以通過我們領先的有機增長渠道，從銅產量增長具有吸引力的強勁前景中獲益，並為投資者提供重要的長期選擇權。隨著 Copper Mountain 礦的加入，我們將處於有利地位，可以通過提高產量、交易流動性和規模來重新評估我們更大的基本金屬同行。 Tideway 為投資者提供最高的短期自由現金流收益率，並通過我們領先的銅礦資源基礎提供顯著的長期上漲空間。因此，我們很高興回答您的問題。

Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. (Operator Instructions) Our first question comes from Orest Wowkodaw of Scotiabank.

謝謝。女士們，先生們，我們現在開始問答環節。 （操作員說明）我們的第一個問題來自豐業銀行的 Orest Wowkodaw。

Peter, I'm curious on your earlier comments about diluting the exposure to Peru through the Copper Mountain acquisition. And I think you mentioned a number of your non-Peru exposure now would be about 55% of NAV. When I think forward here in terms of the next couple of years, certainly, probably the biggest upside to our NAV estimates could be the exploration potential around Constancia with Maria Reyna and Caballito. Wouldn't that actually reverse the Copper Mountain advantage? And I'm just curious if you have a target in mind in terms of where you'd like to get that Peru exposure knowing that you're going to have a potential upside with the exploration in Peru.

Peter，我很好奇你之前關於通過收購 Copper Mountain 稀釋在秘魯的風險敞口的評論。而且我認為你提到了一些非秘魯風險敞口現在約為資產淨值的 55%。當我在這裡考慮未來幾年時，當然，我們的 NAV 估計的最大上行空間可能是 Maria Reyna 和 Caballito 在 Constancia 周圍的勘探潛力。這實際上不會扭轉銅山的優勢嗎？我很好奇你是否有一個目標，你想在哪裡獲得秘魯的曝光，知道你將在秘魯的勘探中獲得潛在的好處。

Thank you for that thoughtful question. So you're absolutely right. So we are reducing exposure through increasing exposure in North America. That doesn't mean that we like Peru any less. Frankly, I think you've heard me say many, many times before, that I believed in Peru for the last 2.5 decades. Peru tends to go through these ups and downs and cycles in social unrest or whatever you want to call it. But I am convinced that Peru is a good place to be. Constantia has, I believe, one of the best operating workforces in the copper mine in the world, and it's something that we need to lever going forward. Now you're correct. Once we establish exactly what it is that we have at Maria Reyna and Caballito, it certainly does have the potential to change that distribution. But also remember that at some point, we will develop the Copper World project, which tends to adjust that further. But we're not targeting any residual distribution.

謝謝你的深思熟慮的問題。所以你是絕對正確的。因此，我們正在通過增加在北美的曝光率來減少曝光率。這並不意味著我們不喜歡秘魯。坦率地說，我想你以前聽我說過很多很多次，在過去的 2.5 年裡我相信秘魯。秘魯往往會在社會動盪或任何你想稱之為的情況下經歷這些起伏和周期。但我相信秘魯是個好地方。我相信，Constantia 擁有世界上銅礦中運營最好的員工隊伍之一，這是我們需要推動的事情。現在你是對的。一旦我們確切地確定了 Maria Reyna 和 Caballito 的情況，它肯定有可能改變這種分佈。但也請記住，在某個時候，我們將開發 Copper World 項目，該項目往往會進一步調整。但我們不針對任何剩餘分佈。

We just think that the current initiative with Copper World raises the company to a better place. But I am convinced that Caballito and Maria Reyna will be operations in the near term that will significantly improve Hudbay's access to copper and production profile. Since you've asked the question, I'd probably take the opportunity to say that we've been really happy with turn of events in Peru. It looks like President Boluarte is doing a really good job of stabilizing the environment. It looks like she has appointed a qualified cabinet. And it looks like we are enjoying a period of, I would say, relative quiet, and I expect this to proceed for some time. We certainly are having no issues with proceeding with the bureaucracy with our initiatives towards getting our exploration permits for Caballito and Maria Reyna. So the quick answer is, yes, we are readjusting our distribution geographically in the short term. But over the long term, together with Maria Reyna and Caballito as well as Copper World, we expect to maintain roughly the same distribution.

我們只是認為目前與 Copper World 的合作將公司提升到了一個更好的位置。但我相信 Caballito 和 Maria Reyna 將在短期內開展業務，這將顯著改善 Hudbay 對銅的獲取和生產狀況。既然你問了這個問題，我可能會藉此機會說我們對秘魯的事態發展非常滿意。看起來 Boluarte 總統在穩定環境方面做得非常好。看起來她任命了一個合格的內閣。看起來我們正在享受一段相對安靜的時期，我希望這種情況會持續一段時間。我們在為獲得 Caballito 和 Maria Reyna 的勘探許可而採取的舉措中，與官僚作風一起進行當然沒有任何問題。所以快速的回答是，是的，我們正在短期內重新調整我們的地理分佈。但從長遠來看，我們預計將與 Maria Reyna 和 Caballito 以及 Copper World 一起保持大致相同的分佈。

As a quick follow-up, do you see more opportunities like Copper Mountain out there if that potentially Hudbay could take advantage of?

作為快速跟進，如果 Hudbay 可以利用的話，您是否會看到更多像 Copper Mountain 這樣的機會？

We always continue to look for those opportunities, Orest. And we've always said that they're hard to come by because of our pretty firm and disciplined approach to acquisitions. If there is something out there, we certainly would be interested in it. But the focus on priority #1 right now is to combine Copper Mountain into the portfolio, and then we'll think about what might be next.

Orest，我們一直在尋找這些機會。而且我們一直說，由於我們對收購採取非常堅定和紀律嚴明的方法，因此很難獲得它們。如果那裡有什麼東西，我們當然會對它感興趣。但目前優先考慮的重點是將 Copper Mountain 合併到投資組合中，然後我們將考慮下一步可能是什麼。

(Operator Instructions) Our next question comes from Ralph Profiti of

（操作員說明）我們的下一個問題來自 Ralph Profiti

Eight Capital,

八資本，

Peter, I want to come back to the move to 100% renewables at Constancia. And just wondering what exactly are those renewable sources starting in 2026. Is this capacity currently installed? And maybe give us a little bit of flavor on how much power currently accounts for the Constantia cost structure and whether or not we can see some potential savings there.

彼得，我想回到康斯坦西亞轉向 100% 可再生能源的話題。只是想知道從 2026 年開始的這些可再生能源到底是什麼。目前是否安裝了這些容量？也許讓我們了解一下目前有多少電力佔 Constantia 成本結構，以及我們是否可以在那裡看到一些潛在的節省。

Thanks for that question. So as far as exactly how ENGIE's energy assets are configured, I don't know the answer to that offhand. It certainly -- I mean, we negotiated this agreement over a long period of time viewing a highly competitive bidding process. And the team in Peru serves me that we will have 100% renewable source of electricity. But my understanding is that it is almost all hydro and wind.

謝謝你的問題。因此，至於 ENGIE 的能源資產究竟是如何配置的，我暫時不知道答案。這當然 - 我的意思是，我們在很長一段時間內通過競爭激烈的投標過程談判達成了這項協議。秘魯的團隊告訴我，我們將擁有 100% 的可再生能源。但我的理解是，它幾乎全是水力和風力。

Ralph, Eugene Lei here. If I could add, we get certain green certificates for this energy, and the contract starts in January 2026. So I think it's a 720 gigawatt hours a year of these renewable energy credits that -- and we consume about 710. So slightly in excess with what the contract is for and it begins in 2026, as I mentioned.

拉爾夫，尤金雷在這裡。如果我可以補充一點，我們獲得了這種能源的某些綠色證書，並且合同從 2026 年 1 月開始。所以我認為這些可再生能源信用額度每年為 720 吉瓦時——我們消耗了大約 710 吉瓦時。所以略微過剩正如我提到的，合同的目的是什麼，它從 2026 年開始。

Great. That's helpful for context. Appreciate that. If I can ask a follow-up, Peter, it's been a while since we've heard about the tailings reprocessing opportunity. And I understand that you're looking at some metallurgical testing. Can you talk a little bit about the differing metallurgical techniques and technologies that you're looking at? And where does that stand on bringing that forward and perhaps seeing some value there as you're thinking about and prioritizing perhaps other bigger, larger-scale projects?

偉大的。這對上下文很有幫助。感謝。如果我可以問後續問題，彼得，自從我們聽說尾礦再加工機會以來已經有一段時間了。我知道你正在研究一些冶金測試。你能談談你正在研究的不同冶金技術嗎？當您正在考慮和優先考慮其他更大、更大規模的項目時，在推進這一點以及可能看到一些價值方面，它的立場是什麼？

So I'll have the first kick at the answer of that, Ralph, and I'll ask Andre to maybe provide a little bit more color. But we continue to conduct metallurgical test programs and you evaluate metallurgical technologies to assess the processing viability of the tails, which, of course, if positive will lead to a future mineral resource estimate. But that said, we've also identified the opportunity to reprice the Anderson tailings in Snow Lake given the significant amount of gold that's been deposited there over many, many decades. And also given the close proximity to existing producing infrastructure at Stall and New Britannia and the fact that production from Snow Lake is unstreamed, so we may also consider tailings reprocessing opportunities in Snow Lake as future phases of our Stall mill recovery projects permit. But with respect to exactly what you asked with respect to technologies in Flin Flon, perhaps Andre can provide a little bit of color there.

因此，拉爾夫，我將首先回答這個問題，我會請安德烈提供更多顏色。但我們繼續進行冶金測試計劃，您評估冶金技術以評估尾礦的加工可行性，當然，如果是肯定的，將導致未來的礦產資源估算。但話雖如此，我們也發現了重新定價雪湖安德森尾礦的機會，因為幾十年來那裡已經沉積了大量黃金。此外，鑑於 Stall 和 New Britannia 靠近現有的生產基礎設施，而且 Snow Lake 的生產沒有流出，因此我們也可能會考慮在 Snow Lake 的尾礦再加工機會，因為我們的 Stall 磨機回收項目的未來階段允許。但是關於你問的關於 Flin Flon 技術的確切問題，也許 Andre 可以提供一些顏色。

Sure. So I'll start with the easier one and less complicated in slowly. So we're looking at it as well in the Snow Lake operation. And the technology that we're looking at is very similar to what we have at New Britannia with some slight modifications to be able to deal with some base metals that are in the tails. So our historical tailings in Snow Lake have a mixture of copper, zinc and gold at lower recoveries than we would like today. So what we've done in Snow Lake was put in place a cyanide process and the process that we would have to do to treat the tails would be managing with something similar to what they call the [Americo-type] circuit, managing the base metals first before striking gold. In Flin Flon, it's a little different. And it has both similar copper and zinc and gold. The zinc is much finer grain. And the process that we're looking at right now is how to extract the elemental sulfur from the tails. And there's a variety of metallurgical technologies that we're testing right now, and it's still very early days.

當然。所以我會從更簡單的開始，慢慢來。因此，我們也在 Snow Lake 運營中關注它。我們正在研究的技術與我們在新不列顛尼亞所擁有的技術非常相似，只是做了一些細微的修改，以便能夠處理尾巴中的一些賤金屬。因此，我們在雪湖的歷史尾礦中含有銅、鋅和金的混合物，其回收率低於我們今天想要的。因此，我們在 Snow Lake 所做的是實施氰化物工藝，而我們必須做的處理尾巴的工藝將使用類似於他們所謂的 [Americo-type] 電路的方法進行管理，管理基地在打金之前先打金屬。在 Flin Flon 中，情況有點不同。它同時具有相似的銅、鋅和金。鋅的顆粒要細得多。我們現在關注的過程是如何從尾巴中提取元素硫。我們現在正在測試各種冶金技術，但還處於早期階段。

Our next question comes from Farooq Hamed of Raymond James.

我們的下一個問題來自 Raymond James 的 Farooq Hamed。

I was just looking at a couple of the corporate actions that you've taken in the quarter, specifically pushing back your gold prepay payments and then the hedging of some of your copper in the second half of the year. And so it looks like you're protecting your cash flows in the second half of the year. And I was just wondering if you could give some insight as to why you're taking these extraordinary measures to either protect or marshal your cash in the back half of the year. Is there something in the plan for the back half of the year that maybe is not as well understood?

我只是在看你在本季度採取的一些公司行動，特別是推遲你的黃金預付款，然後在下半年對沖你的一些銅。因此，您似乎在保護下半年的現金流。我只是想知道您能否就為什麼要在今年下半年採取這些非常措施來保護或整理您的現金提供一些見解。下半年的計劃中是否有某些內容可能沒有被很好地理解？

Eugene here. Thanks for the question. There are really measures taken to ensure that we have strong free cash flow generation throughout the year. And maybe the first measure was the deferral of the gold prepay. We started -- we did that in February, and we deferred 8 monthly payments of gold. And that was in a period where there was some [few] uncertainty, as Peter highlighted, and we want to ensure that we got access to a monthly cash flow basis. Obviously, having the gold price move up since we've made that deferral has helped the cost of it. The cost of it was roughly 3%, which is a lot cheaper than we'll call it, a normalized cost of capital. And with the gold price increase that we've experienced, the cost of that deferral is actually close to zero at the moment. So I think it was an effective way of cashflow management for the year.

尤金在這裡。謝謝你的問題。確實採取了措施來確保我們全年都能產生強勁的自由現金流。也許第一項措施是推遲黃金預付款。我們開始了——我們在 2 月份就這樣做了，我們推遲了 8 個月的黃金支付。正如彼得強調的那樣，那是在一個存在一些 [很少] 不確定性的時期，我們希望確保我們能夠獲得每月現金流量基礎。顯然，自從我們延期後金價上漲有助於降低成本。它的成本大約是 3%，比我們所說的標準化資本成本要便宜得多。隨著我們經歷的金價上漲，目前延期的成本實際上接近於零。所以我認為這是今年現金流管理的有效方式。

As we indicated with our guidance, the production of copper for Peru is back-end weighted. That's about 60% in the second half. And so as we look forward to this year, much of that production is going to be in the second half. And given the volatility in the markets that we've seen year-to-date already, we want to make sure that we could be opportunistic to ensure that we were going to get that free cash flow at the end of the year. So I think you'll see a floor of $3.95 and a ceiling of $4.28 or 10% of that production. It's done on a monthly basis. And so that just ensures some smoothing of prices and again locks in some certainty. I think that $3.90 floor is probably the highest floor that you've seen in the cost of colors that our peers have done. So I think it's just an opportunity for us to manage through what we expect to be a strong cash flow generation period for the company so that we meet our deleveraging targets that we outlined earlier this year.

正如我們在指導中指出的那樣，秘魯的銅產量是後期加權的。下半年約為 60%。因此，正如我們期待今年的那樣，大部分生產將在下半年進行。鑑於我們今年迄今已經看到的市場波動性，我們希望確保我們可以投機取巧，以確保我們將在年底獲得自由現金流。所以我認為你會看到 3.95 美元的下限和 4.28 美元的上限或該產量的 10%。它按月進行。因此，這只是確保了價格的一些平滑，並再次鎖定了一些確定性。我認為 3.90 美元的下限可能是您在我們同行所做的顏色成本中看到的最高下限。因此，我認為這只是我們管理公司的一個強勁現金流生成期的機會，以便我們實現今年早些時候概述的去槓桿化目標。

So I'm just wondering, like you said, the back half of the year is supposed to be stronger. You're supposed to have better operating performance in the back half of the year, so you think you'd naturally have better cash flow to begin with. I don't think that there's any major capital program in the back half of the year that I can think of. So I'm just trying to understand why you're wanting to protect those cash flows. Is there -- I mean most operators when they're just operating normally, they won't put in a hedge program like that. So I'm just trying to understand what specifically was the reason that you identified the back half of the year is something that you wanted to protect the cash flows.

所以我只是想知道，就像你說的，今年下半年應該會更強勁。你應該在今年下半年有更好的經營業績，所以你認為你自然會有更好的現金流開始。我不認為下半年有任何重大的資本計劃是我能想到的。所以我只是想了解你為什麼要保護這些現金流。有沒有——我的意思是大多數運營商在正常運營時，他們不會投入這樣的對沖計劃。所以我只是想了解您確定下半年的具體原因是您想要保護現金流量。

It wasn't any capital program that we expect embark on. As you saw with our guidance, annual guidance, we're reducing discretionary spend this year to target free cash flow. And I think it's with those targets to make sure that we come out on the back of the year with lower net debt to EBITDA and a stronger cash balance as we go into 2024 and any decisions that we had to make with respect to Copper World and '25 and beyond. So just ensuring that we get that. So instead of maybe the back half of the year, if the prices are weaker, that we lose out on that cash flow generation. So just laying us laying a little bit of protection for us to ensure strong free cash flow generation. No spending significant increase that we haven't unplanned.

這不是我們期望開始的任何資本計劃。正如您在我們的指導、年度指導中看到的那樣，我們今年將減少可自由支配的支出，以實現自由現金流。我認為這些目標可以確保我們在今年年底以較低的 EBITDA 淨債務和更強的現金餘額進入 2024 年，以及我們必須就 Copper World 和'25 及以後。所以只要確保我們得到它。因此，如果價格走軟，我們可能會在今年下半年失去現金流量。因此，讓我們為我們提供一點保護，以確保產生強大的自由現金流。沒有計劃外的支出顯著增加。

(Operator Instructions) This concludes the question-and-answer session. I would like to turn the conference back over to Candace Brule for any closing remarks.

（操作員說明）問答環節到此結束。我想將會議轉回 Candace Brule 的閉幕詞。

Thank you, operator, and thank you, everyone, for joining us today. If you have any further questions, please feel free to reach out to our Investor Relations team. Thank you, and have a great day.

謝謝接線員，也謝謝大家今天加入我們。如果您有任何其他問題，請隨時聯繫我們的投資者關係團隊。謝謝你，祝你有美好的一天。

This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.

今天的電話會議到此結束。您可以斷開線路。感謝您的參與，祝您度過愉快的一天。