In a Feb. 20 research note, iA Securities analyst George Topping reported that HudBay Minerals Inc.'s (HBM:TSX; HBM:NYSE) Q4/18 was a beat and 2019 guidance is in line.
The company's Q4/18 cash flow was $0.40 per share versus consensus' $0.31 estimate. EBITDA came in at $122.8 million, higher than the Street's $107 million forecast. The beat was due to continued higher grades at Constancia.
Looking at this year, 2019, cash costs per mined ton should decrease from their 2018 peaks. At Constancia they should drop by 5%, and at Manitoba they should stabilize.
Copper production also is expected to come down, by about 12%, as the copper grades at Constancia revert to the average.
HudBay has a new mine plan for Lalor that encompasses the New Britannia gold mill. It outlines gold production of 140 thousand ounces a year at cash costs of $450 per ounce for the first five years "once the mill is refurbished and the gold zone is accessed in 2022," Topping noted.
As for Rosemont, Topping indicated, HudBay should receive the final water permits soon.
IA Securities has a Buy rating and a CA$12.20 per share target price on HudBay, whose current share price is around CA$9.05.[NLINSERT]
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Disclosures from iA Securities, Hudbay Minerals Inc., Research Update, February 20, 2019
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