HudBay Minerals Inc. (TSX:HBM) saw its shares fall more than 12% on Wednesday afternoon after releasing its latest production guidance, which included a downward revision for 2025 copper and gold output.
Hudbay’s 2025 production guidance now forecasts copper output of 117,000 to 149,000 tonnes, which is approximately 13% lower than the previous range of 132,000 to 172,000 tonnes, while gold production is expected to be between 248,000 and 308,000 ounces, about 6% below the prior estimate of 264,000 to 326,000 ounces.
Jefferies analysts noted that while fourth-quarter production volumes were strong, the updated 2025 guidance was weaker than expected.
Hudbay also pointed to higher-than-expected cost projections, with consolidated cash cost guidance for copper at $0.80 to $1 per pound, compared to their estimate of $0.36 per pound. Meanwhile, capital expenditures are now expected to be $580 million, lower than Jefferies’ estimate of $616 million.
Hudbay’s fourth-quarter copper production of 43,000 tonnes was in line with expectations, but cash costs of $0.45 per pound were higher than the $0.13 per pound Jefferies had estimated. Adjusted EBITDA of $257 million also fell short of the firm's $304 million estimate.
Following the updated guidance, Jefferies lowered its price target on Hudbay shares by 7% to C$14 but maintained a Buy rating, stating, "We view this sell-off as an enhanced opportunity to buy HBM shares ahead of Copper World de-risking and Peru exploration catalysts on the horizon."
Hudbay expects to release a three-year production outlook in March, which will include an updated mineral reserve and resource estimate.