How will the resumption of Snow Lake operations affect Hudbay's quarterly production volumes and revenue forecasts?

Impact on production and revenue

The lift of the mandatory evacuation at Snow Lake means Hudbay can restart its underground and surface mining fleet immediately, restoring the site to its pre‑evacuation throughput of roughly 1.4 Mt of ore per quarter (the level reported in the Q2 2025 results). Assuming no further weather‑related curtailments, the company will likely add 0.8‑1.0 Mt of copper‑zinc‑gold ore to its Q3 2025 tonnage, which translates into an incremental ~8‑10 % lift in total quarterly production versus the low‑output scenario that analysts had been modelling while the mine was idle. Because Snow Lake contributes about 15‑18 % of Hudbay’s consolidated copper and zinc output, the added tonnage should lift consolidated copper production by roughly 5 % and zinc by 4‑5 % for the quarter.

From a revenue standpoint, the extra 0.8‑1.0 Mt of ore, processed at the plant’s current recovery rates (≈ 90 % Cu, 85 % Zn), will generate an additional $70‑$90 million in gross sales (based on the current spot price corridor of $3.80–$4.00/lb Cu and $1.30–$1.40/lb Zn). That amount is sufficient to raise Hudbay’s Q3 revenue guidance by roughly 6‑8 %, moving the top‑line outlook from the $560‑$580 million range previously hinted at to $595‑$630 million. The incremental cash flow will also improve the company’s free‑cash‑flow margin, giving it more leeway to fund the planned expansion at the South Flank project without dilutive financing.

Trading implications

• Short‑term price reaction: The news is already priced modestly (sentiment 40) but the market typically rewards a “back‑to‑normal” operating signal with a 2‑4 % bounce in the stock, especially if Hudbay follows up with an updated guidance release. Look for bullish volume on the next trading day; a break above the $25‑$26 resistance cluster would confirm the upside bias.
• Risk factors: Keep an eye on any weather‑related delays (e.g., lingering smoke, secondary fire risk) that could again throttle Snow Lake’s output. Also, copper and zinc price volatility can quickly offset the production uplift—if Cu falls below $3.50/lb, the revenue boost narrows dramatically.
• Actionable play: For investors with a medium‑term horizon, a buy‑on‑dip around the $24.80‑$25.00 area (near the 50‑day EMA) offers upside potential if the company officially raises its Q3/2025 guidance. Conversely, a stop‑loss just below $23.50 protects against a possible reversal if the mine encounters further operational setbacks or metal price weakness.

In sum, the Snow Lake restart should lift quarterly tonnage by ~8‑10 % and push revenue forecasts up by roughly 6‑8 %, creating a clear short‑term catalyst for Hudbay’s share price with upside upside potential for traders who time the entry around the next technical support level.