Toronto-listed Hudbay has delivered on its plan for higher copper production in Peru and higher gold production in Manitoba, Canada, having completed $250-million in brownfield investments.

The miner increased copper production to 104 174 t and gold production to 219 700 oz in 2022, meeting its 2022 guidance.

However, production of copper and gold was at the lower end of the guidance range primarily owing to lower-than-planned grades in the fourth quarter in Peru caused by short-term mine plan changes that were implemented to mitigate the risks associated with logistical and supply chain disruptions in the country.

“We are proud to have achieved consolidated production guidance as the team successfully managed the regional logistics and supply chain challenges in Peru at the end of the year and we benefitted from ongoing optimisation efforts at our Snow Lake operations,” said president and CEO Peter Kukielski.

Consolidated cash costs per pound of copper produced, net of by-product credits, in 2022 were $0.86 compared with $0.74 in 2021 and consolidated sustaining cash cost per pound of copper produced, net of by-product credits in 2022, remained substantially unchanged from 2021 at $2.07. Both measures remained in line with the 2022 guidance ranges.

Net earnings and earnings a share for 2022 were $70.4-million and $0.27, respectively, compared with a net loss and loss a share of $244.4-million and $0.93, respectively, in 2021. The prior period results were negatively impacted by a $193.5-million revaluation of the Flin Flon environmental reclamation provision, resulting in an impairment charge of the same amount as well as a $66.7-million in mark-to-market loss mostly from $49.8-million of write-offs for a non-cash embedded derivative on the early redemption option associated with the company’s extinguished senior unsecured notes.

Kukielski said that Hudbay’s focus for 2023 was to generate free cash flow through continued increases in copper and gold production and to remain disciplined with capital allocation as it derisked the Copper World project in Arizona, US.

Hudbay is targeting higher copper and gold production this year, with further increases forecast over the following two years.

Copper production will increase by 10% to 114 000 t in 2023, with higher grades from the Pampacacha deposit, in Peru. Consolidated gold production will increase by 30% to 285 500 oz, on the back of higher gold production in Peru and Manitoba.

The firm has allocated $300-million in capital expenditure for 2023. Exploration expenditures will also decline drastically, with a 61% decrease forecast. Activities will be focused on areas with high potential for new discovery and mineral reserve and resource expansion.