Project Update & New Developments
Hudbay’s Q2‑2025 release confirms that all of its core assets are operating on or ahead of schedule, with several near‑term catalysts that could tighten the share price‑to‑earnings multiple in the next 12‑months. The company highlighted three “key mining projects”:
Lalor Mine (Ontario) – the flagship copper‑zinc operation is now in its 13th year of production and remains the primary cash‑generator for the company. Production for the quarter was 2.9 Mt of ore milled, delivering 30 kt of copper and 12 kt of zinc, which is ~10 % above the prior‑year run‑rate. The 2025‑2027 capital plan includes a $165 million expansion to increase the concentrator’s throughput by 20 % and to add a dedicated copper‑only circuit. The expansion is slated to come online in Q4 2025, with a 2026‑2027 ramp‑up that should lift cash flow by $200‑$250 M annually.
Rosemont (Arizona, USA) – the 2025 production ramp was completed in Q1 and the mine is now delivering 45 kt of copper and 3 kt of gold per year, roughly 15 % above the original forecast. A recent 2024‑2025 exploration program identified a 3‑km extension of the “Red Creek” high‑grade corridor, which the company is now drilling as a “Phase‑2” extension (estimated +7 % copper content). This drill program, slated to finish by Q2 2026, could add an incremental 3‑5 kt of copper per year once the extension is brought into production.
Copper Creek (Arizona) – Hud‑Mats completed the 2025‑2026 “copper‑first” upgrade, adding 10 % more capacity to the crushing circuit. The company announced a “new development” of a high‑grade drill‑core discovery (the “Red Creek East” target) that could potentially raise the mine’s life‑of‑mine (LOM) estimate from 18 to 22 years. The company has earmarked $20 million for a fast‑track feasibility study, with a decision point scheduled for Q3 2025.
Trading Implications
- Fundamentals: The operational performance of Lalor and the successful ramp‑up at Rosemont reinforce Hudbay’s cash‑flow outlook and give the company a solid runway for dividend growth and share‑repurchase capacity. The added 2025‑2027 expansion capital is fully funded by cash flow and a modest $150 M revolving credit facility, reducing financing risk.
- Catalysts: The imminent 20 % capacity boost at Lalor (Q4 2025) and the forthcoming decision on the Red Creek East expansion (Q3 2025) represent near‑term upside catalysts. If the Red Creek drill results meet or exceed the 7 % incremental copper forecast, the market may re‑price the company’s forward cash‑flow multiple from ~6‑7 × FY‑26 EBITDA to 8‑9 ×, creating upside potential of 15‑20 % in the next 4‑6 weeks.
- Technical outlook: Hudbay shares have been trading in a tight 6‑month range (≈ $45‑$55). Volume has risen 30 % in the past two weeks, hinting at a breakout. A close above $53.50 with 50‑day SMA support at $52.8 could trigger a short‑term swing‑trade targeting $58‑$60 on the upside; a break below $48.5 would suggest a retest of the 200‑day SMA (~$46) and potential downside risk.
Actionable Insight: Maintain a long‑bias on Hudbay (HBM) with a buy‑on‑dip strategy near the $52‑$53 zone, targeting the $58‑$60 upside window. Keep a stop‑loss around $48.5 to manage downside if the Red Creek expansion fails to meet expectations. The strong project pipeline and funded expansions make Hudbay a compelling mid‑term play for investors seeking exposure to copper‑price upside and reliable dividend yield.