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Waterton Announces Eight Fully Independent Director Nominees for Election to Hudbay Minerals Board at 2019 Annual Meeting

Share:

Waterton's Highly-Qualified Nominees Possess the Specific Necessary
Skills – including Relevant Operating, Permitting, Financial and
Leadership Expertise – to Resolve the Issues that Plague Hudbay

Fully Independent Slate Includes Mining Industry Veteran Peter
Kukielski, a CEO Candidate with Decades of Global Operational Experience

Hudbay Currently Suffers from a Culture of Entrenchment, Deficiency
of C-suite Leadership and Lack of Board Expertise and Engagement that
has Directly Translated into Underperformance

Expertise of the Proposed Board Slate and the Leadership of Mr.
Kukielski are Required to Resurrect Hudbay and Maximize Shareholder Value

Waterton Global Resource Management, Inc. (collectively with Waterton
Precious Metals Fund II Cayman, LP, Waterton Mining Parallel Fund
Offshore Master, LP and certain other affiliates, "Waterton" or "we" or
"us"), which owns approximately 11.9% of the issued and outstanding
shares (the "Shares") of Hudbay Minerals Inc. ("Hudbay" or the
"Company") (TSX:HBM) (NYSE:HBM), today issued the following letter to
its fellow shareholders announcing its majority slate of eight
highly-qualified and experienced independent director candidates for
election to the Hudbay Board of Directors (the "Board") at the Company's
2019 Annual Meeting of Shareholders (the "Annual Meeting"):

This press release features multimedia. View the full release here:
https://www.businesswire.com/news/home/20190116005443/en/

(Graphic: Business Wire)

(Graphic: Business Wire)

January 16, 2019

Dear Hudbay Shareholders:

Waterton, one of Hudbay Minerals Inc.'s ("Hudbay" or the "Company")
(TSX:HBM) (NYSE:HBM) largest shareholders with approximately 11.9% of
the issued and outstanding shares, today announced eight
highly-qualified and experienced director candidates for election to the
Hudbay Board at the 2019 Annual Meeting. The 2019 Annual Meeting will
provide you with an opportunity to elect a truly independent board that
can offer critically important fresh perspectives on maximizing
shareholder value at Hudbay. Waterton's proposed director slate is fully
independent and does not include any employees or direct representatives
of Waterton.

Under the current Board and management team, Hudbay has repeatedly
failed to realize its potential. We believe this underperformance
derives from the following four factors and it is specifically because
of these factors that eight of the ten current Hudbay directors need to
be replaced:

  • A pervasive culture of entrenchment;
  • A deficiency of real leadership from the Company's Chairman and Chief
    Executive Officer ("CEO");
  • The Board lacking expertise in key areas; and
  • The Board lacking the necessary engagement and focus from certain
    Board members.

In an effort to finally end Hudbay's underperformance, Waterton is
proposing a Board slate of individuals who have the skillset, experience
and imminent willingness to resolve the issues currently plaguing the
Company. The nominees collectively include:

  • A tenacious "Blue Chip" Chairman candidate who will eradicate
    entrenchment and seek value for shareholders and other stakeholders;
  • A CEO candidate with decades of global operational and leadership
    experience;
  • Deep US permitting experience, specifically with Clean Water Act and
    404 permit issues;
  • Decades of experience developing, constructing and operating large
    open pit copper mines;
  • Significant stakeholder relations expertise in Peru;
  • Mining technology expertise; and
  • Proven experience with resolving strategic issues and financing
    projects within the mining sector.

While ultimately the Board will select the CEO of Hudbay, Waterton is
proposing its Board nominee, Peter Kukielski, for the role. Mr.
Kukielski most recently held the CEO role at Nevsun Resources ("Nevsun")
(TSX:NSU) (NYSE:NSU). We believe Mr. Kukielski is the right
person to lead Hudbay because he has exceptional operating experience
and a proven track record of creating and crystallizing market value for
investors. Mr. Kukielski was announced as CEO of Nevsun in May 2017.
During his tenure, Total Shareholder Return for Nevsun investors was 93%1.
During this same period, Hudbay's Total Shareholder Return was -12%.
Over his 30-year career at Nevsun, ArcelorMittal, Teck Resources,
Falconbridge and BHP Billiton, Mr. Kukielski has overseen dozens of
complex operating and development stage mines in approximately 15
jurisdictions.

We believe Mr. Kukielski's immense experience defining, communicating
and executing on a holistic business strategy across multiple mining
projects and jurisdictions will be invaluable to Hudbay. As compared to
other "best in class" mining companies, Hudbay's business and capital
allocation strategies are alarmingly thin; one reason for this is that
the C-suite does not have the necessary global, multi-asset, experience
to meaningfully define these strategies. Hudbay has evolved from being
essentially a single-asset/single-province company to a complex
multinational company, yet the current CEO, COO and CFO all have their
roots in the older, simpler Hudbay. During Hudbay's expansion, this
home-grown team has been learning on the job, but the time for learning
on the job is over. Hudbay requires, and shareholders deserve, a CEO who
already has decades of experience managing a multinational portfolio of
mining assets and who can help define and execute on a clear business
strategy that maximizes shareholder value.

Underperformance and Current Board Issues

Hudbay has the potential to become a world-class intermediate copper
producer. However, under the oversight of the current Board, the Company
has been a chronic underperformer. The Company's 1-year, 3-year and
5-year Total Shareholder Return relative to its peer group2
has been an abysmal -37%, -89% and -68%, respectively.3

The Entrenched Five

Hudbay suffers from a culture of entrenchment. Each of Mr. Alan Hibben,
Mr. Warren Holmes, Mr. Alan Lenczner, Mr. Kenneth Stowe and Mr. Alan
Hair (collectively, the "Entrenched Five") has either been on the Board
or in a senior management role at the Company for nearly a decade.

Director      

Tenure as
Director/Senior
Management

     

Total Shareholder
Return Relative to Peers

     

Total Shareholder
Return Relative to
Hudbay's
Self-Selected Peers
4

Alan Hibben       Since March 23, 2009       -122%       -93%
Warren Holmes       Since March 23, 2009       -122%       -93%
Alan Lenczner       Since March 23, 2009       -122%       -93%
Kenneth Stowe       Since June 24, 2010       -86%       -79%

Alan Hair

     

Since June 1, 20125

     

Since CEO6 -106%

     

Since CEO -56%

                 

We would note how drastically the Entrenched Five have underperformed
the peer group they select for themselves, in addition to all relevant
market indices.

The issue at Hudbay is not just the lengthy tenures of the Entrenched
Five. It is that a critical mass of the Board has served together for
nearly a decade and, even more dubiously, their service has coincided
with Mr. Hair and a substantial portion of the current C-suite being in
senior management roles. Given these facts, shareholders should have a
legitimate concern as to whether, after a decade, the linchpin of good
corporate governance – director independence – has been eroded and
whether that erosion is adversely impacting decision-making and,
ultimately, shareholder value. We believe this culture of entrenchment
at Hudbay has negatively impacted shareholder value and it must stop now.

Engagement in Critical Areas

We believe that the Company is lacking an engaged and focused South
American perspective on the Board. It seems that the Board's primary
recent South American expertise comes from Mr. Igor Gonzales, who joined
the Board in July 2013. In May 2017, Mr. Gonzales became the President
and Chief Executive Officer of Sierra Metals ("Sierra") (TSX:SMT) (BVL:
SMT) (NYSE:SMTS). Currently, Sierra is (i) completing
pre-feasibility and feasibility studies on three separate projects; (ii)
undergoing significant expansion at its three operating mines; and,
(iii) working to acquire key permits at its Peruvian operations after
the Peruvian regulator recently rejected its Environmental Impact
Assessment. Hudbay requires representation on its Board that has the
bandwidth to meaningfully analyze the Company's South America
operations. Due to the considerable attention required of Mr. Gonzales
to address the issues facing Sierra, he lacks the adequate bandwidth
that Hudbay shareholders deserve.

Targeting Expertise in the Mining Sector

In the same way that Hudbay has changed and grown, we believe that the
Company's Board must evolve in order to meaningfully hold management to
account. As currently constituted, the Board does not have the requisite
skillset in the sector to hold management accountable, as evidenced by
the Company's failures on multiple fronts and also by the inappropriate
methodologies applied by the Board to assess management. To that end, we
believe the Board should be refreshed to include mining sector expertise
that is responsive to the very specific and material issues that
challenge the Company so that progress can be made and, just as
importantly, management can be meaningfully assessed. Each Board seat
should be allocated to either a leadership role or to a subject matter
expert (i.e., US permitting, open pit mine construction, South American
stakeholder relations). While we respect Ms. Carin Knickel's and Mr.
Colin Osborne's experience in the oil and gas and steel sectors,
respectively, we believe that, at this critical juncture, these Board
seats should be allocated to subject matter experts with deeper
experience in the base metals sector who would more effectively provide
strategic corporate guidance while holding management to account.

Given the foregoing entrenchment, lack of engagement, and inadequate
expertise, we believe that eight of the ten current directors of Hudbay
should be either entirely disqualified from sitting on the Company's
Board or their seats should be upgraded with new independent directors
who offer far more engagement, relevant expertise, and a proven track
record of creating value for shareholders.

It's Time for Fresh Perspectives and New Ideas

Waterton's director nominees have been selected in a very targeted
manner, keeping in mind the specific and complementary expertise that is
required on the Board to meaningfully inform corporate strategy, hold
management to account, and maximize shareholder value. Waterton's
director nominees are as follows:

Director       Proposed Role
Peter Kukielski       CEO & Director
Richard Nesbitt       Independent Chairman
Mike Anglin       Independent Director
David Deisley       Independent Director
Emily Moore       Independent Director
Daniel Muniz Quintanilla       Independent Director
Ernesto Balarezo       Independent Director
David Smith       Independent Director
     

Strong, Proven and Experienced Leadership in the C-suite

Hudbay now has the rare opportunity to recruit a CEO with a proven and
successful track record. Mr. Kukielski not only has the operational
experience to lead Hudbay, but, just as importantly, he has decades of
experience in developing holistic business strategies for companies with
multinational mining portfolios. Mr. Kukielski's credentials include:

  • Multinational Mining Expertise: Mr. Kukielski has more than 30
    years of extensive global experience within the base and precious
    metals sector as both a top executive and director, having overseen
    operations across the globe for companies such as Nevsun,
    ArcelorMittal, Teck Resources, Falconbridge and BHP Billiton.
  • A Proven Value Creator: During his tenure as Nevsun's CEO
    starting in May 2017, Mr. Kukielski increased the diversified mid-tier
    mining company's Total Shareholder Return by 93%, essentially doubling
    shareholder value.
  • Significant Executive Leadership Experience: Mr. Kukielski has
    held multiple CEO and C-suite roles at public and private companies in
    multiple jurisdictions:
    • 2017 – December 2018: President and Chief Executive Officer
      of Nevsun, where he oversaw assets located in Eritrea, Serbia and
      Macedonia.
    • 2015 – 2017: Non-Executive Director at South32 (ASX: S32)
      (JSE: S32) (LSE: S32) with mining assets in Australia, South
      Africa, Mozambique, Brazil, Colombia and the US.
    • 2014 – 2017: Chief Executive Officer of Anemka Resources, a
      private company backed by Warburg Pincus formed to invest in
      global mining assets.
    • 2008 – 2013: Chief Executive, Mining for ArcelorMittal,
      responsible for 27 operating mines and development projects
      distributed across 12 countries.
    • 2006 – 2008: Chief Operating Officer of Teck Resources,
      responsible for the company's base metal, gold and coal mines,
      major development projects and a refinery.
    • 2001 – 2006: Falconbridge (originally Noranda) serving in a
      variety of senior roles, including Chief Operating Officer and
      overseeing 19 operations and 8 development projects in Canada,
      USA, Peru, Chile, Dominican Republic, Jamaica and Norway.
    • 1997 – 2001: BHP Billiton, serving as Engineering and
      Commissioning Manager on the Antamina Project, a world-class
      greenfield development in Peru.

A Board with the Skills and Expertise Necessary to Resurrect Hudbay

  • Richard Nesbitt (Proposed Chairman)
    • Why Mr. Nesbitt?
      • Hudbay requires oversight by a strong, steadfast and tenacious
        leader who has decades of corporate experience and a clear
        vision in order to change the Company's culture of complacent
        underperformance.
    • Current and Prior Roles
      • Mr. Nesbitt has led some of Canada's largest and most
        important institutions and has executed some of the country's
        most seminal corporate transactions.
      • President and Chief Executive Officer of the TSX Group (the
        predecessor to the TMX Group).
      • Chairman and Chief Executive Officer of CIBC World Markets and
        the Chief Operating Officer of CIBC Bank.
      • President and Chief Executive Officer of HSBC Securities
        Canada.
      • President and Chief Executive Officer of the Global Risk
        Institute.
      • Adjunct Professor at the Rotman School of Management,
        University of Toronto.
      • Visiting Professor at the London School of Economics.
      • Visionary Award from Women in Capital Markets for his work
        throughout his career to sponsor gender diverse management
        teams.
  • Mike Anglin
    • Why Mr. Anglin?
      • Given its operations at Constancia and a pending construction
        decision at Rosemont, the Board requires someone who has
        comprehensive open pit copper mining expertise and extensive
        experience with developing and constructing large-scale open
        pit copper mines in the Americas.
    • Current and Prior Roles
      • Mr. Anglin has over 30 years of experience in the base and
        precious metals industry, with a focus on South American and
        US operations and, importantly, mine construction.
      • Chief Operating Officer of the Base Metals Group of BHP
        Billiton based in Santiago:
        • Responsible for operations, business development and HSEC
          (health, safety, environmental and compliance), technical
          support, governance and business improvement within BHP
          Billiton's Base Metals Business Group;
        • Responsible for the majority of BHP Billiton's large-scale
          open pit copper mines in South America; and
        • Extensive experience in South American government and
          community relations.
      • Chair of the Board at SSR Mining (TSX:SSRM), including
        current and prior roles on the Corporate Governance &
        Nominating Committee, the Safety and Sustainability Committee
        and the Compensation Committee.
  • David Deisley
    • Why Mr. Deisley?
      • Hudbay's Board lacks meaningful experience in US
        permitting/regulatory matters and South American
        stakeholder/community engagement, two areas of expertise that
        are indispensable for unlocking value at Rosemont and
        Constancia.
    • Current and Prior Roles
      • Mr. Deisley is a highly-regarded corporate mining lawyer and
        permitting professional with over 30 years of specialized
        experience on corporate matters within the mining sector, US
        permitting matters and South American permitting and
        stakeholder relations.
      • Recently retired as General Counsel of NOVAGOLD (NYSE
        American: NG) (TSX:NG), where he led the permitting of the
        company's flagship project in Western Alaska (Donlin Gold),
        which secured a joint federal Record of Decision from the
        Corps of Engineers and the Bureau of Land Management and,
        perhaps of most relevance for Hudbay's Rosemont project, a Clean
        Water Act
        404 permit.
      • Executive Vice President, Corporate Affairs and General
        Counsel at Goldcorp (NYSE:GG) (TSX:G) with responsibility
        for Goldcorp's community engagement with indigenous
        communities in Canada and Latin America.
      • General Counsel at Barrick Gold (NYSE:GOLD) (TSX:ABX) at the
        regional and country levels responsible for permitting and
        community and stakeholder relations in Nevada, Chile and Peru.
  • Emily Moore
    • Why Ms. Moore?
      • It is clear to us, and in fact in 2018 Mr. Hibben communicated
        to us, that Hudbay is in need of additional mining technology
        experience at the Board level.
    • Current and Prior Roles
      • A Rhodes Scholar and PhD in Physical Chemistry from Oxford
        University, Ms. Moore is an experienced professional in mining
        technology and innovation.
      • Director of Technology Development/Managing Director for Water
        and Innovation at Hatch, where she led the development and
        deployment of new technology projects in the areas of mining,
        metallurgy, power and water, among others.
      • Principal Engineer and Manager of the Composite Materials
        Engineering Group at Xerox Research, where she spent over 10
        years and co-invented 21 patents.
      • Professor of Engineering Leadership and Director, Troost
        Institute, University of Toronto.
      • Professor at the Institute for Studies in Transdisciplinary
        Engineering Education and Practice, University of Toronto.
      • Named one of the "100 Global Inspirational Women in Mining".
  • Daniel Muniz Quintanilla
    • Why Mr. Muniz?
      • Hudbay's Board requires strategic thinking to guide its
        long-term South American business strategy, and given Mr.
        Muniz's remarkable career and track-record with Grupo Mexico
        (BMV:GMEXICOB) across South America, he is uniquely
        positioned to provide this guidance.
    • Current and Prior Roles
      • Managing Director and Executive Vice President of Americas
        Mining, the holding company of the Mining Division of Grupo
        Mexico, which has operations in Peru, Mexico, US and Spain. As
        Managing Director, Mr. Muniz led several successful M&A, joint
        venture and other similar transactions leading to the
        acquisition and integration of several world-class assets into
        Grupo Mexico.
      • Executive President & Chief Executive Officer of Industrial
        Minera Mexico, the Underground Mining Division of Grupo Mexico.
      • Chief Financial Officer of Grupo Mexico, during which time he
        successfully raised more than $6 billion for the company
        through a variety of securities, including bonds, structured
        bonds and project finance.
  • Ernesto Balarezo
    • Why Mr. Balarezo?
      • Hudbay's Board requires engaged Peruvian representation, and a
        Board member with extensive open pit mining experience
        in Peru, along with a deep social and political network to
        help resolve the stakeholder issues at Constancia and
        specifically at Pampacancha.
    • Current and Prior Roles
      • Mr. Balarezo is a Peruvian national and resident with an
        invaluable local network, and decades of mine operating and
        stakeholder experience in Peru.
      • Hochschild Mining (LME: HOC), Vice President of Operations
        (reporting directly to the CEO) and was responsible for the
        oversight of five active mining operations with more than
        10,000 employees in Peru, Mexico and Argentina.
      • Chief Executive Officer of Gold Fields, Peru, responsible for
        the Cerro Corona mining unit.
      • Special Compliance Unit of Peru Government, responsible for
        monitoring the advancement of certain special projects under
        the direct report and supervision of the Peruvian Prime
        Minister.
      • Independent Director of the largest Peruvian construction
        company, Graña y Montero (NYSE:GRAM) (BVL: GRAMONC1).
  • David Smith
    • Why Mr. Smith?
      • Given Hudbay's entrenched culture and the fact that it may be
        at key strategic inflection points at certain assets, the
        Board requires additional governance support and someone that
        has very extensive boardroom experience managing significant
        strategic issues, specifically within the mining sector.
    • Current and Prior Roles
      • Executive Vice President and Chief Financial Officer of
        Finning International (TSX:FTT), a major equipment supplier
        to the mining industry with significant operations in Canada
        and South America.
      • 16 years in various senior executive roles at Placer Dome with
        extensive experience in North and South America where Mr.
        Smith was involved in the acquisition, development, financing
        and operations of base and precious metal mines.
      • Corporate Director at Pretium Resources (NYSE:PVG) (TSX:
        PVG), where he is Chair of the Audit Committee and a member of
        the Compensation Committee.
      • Corporate Director at Nevsun, where he was the Chair of the
        Audit Committee, a member of the Corporate Governance
        Committee and the Chair of the Special Committee overseeing
        the C$1.8 billion change of control transaction with Zijin
        Mining.
      • Corporate Director at Dominion Diamond (NYSE:DDC) (TSX:DDC),
        where Mr. Smith was the Chair of the Audit Committee, a member
        of the Compensation Committee and a member of the Special
        Committee that led the strategic review and US$1.2-billion
        sale to Washington Companies.

Maintaining Appropriate Continuity on the Board

While we believe the majority of the incumbent Board is entrenched,
lacks necessary expertise, and is unable to hold management to account,
we also view a certain level of continuity at the Board level as
important. Therefore, we currently would be supportive of the
re-election of incumbent Hudbay directors Carol Banducci and Sarah
Kavanagh to the Board at the upcoming Annual Meeting.

In particular, we recognize Ms. Banducci's strong experience in the
mining industry and we acknowledge that she has not had the same history
at Hudbay as some of the other directors and that she is widely
recognized for her professional competence in Canada. Further, in our
limited interactions with Ms. Kavanagh, we found her to be professional
and reasonable and we believe her vast financial and regulatory
experience would continue to add value to the Hudbay boardroom.

###

We encourage Hudbay shareholders not to be misled by the Company's
rhetoric about Waterton, our intentions or potential conflicts of
interest. It should now be clear that Waterton has no desire to be in
the Hudbay boardroom, but we do have a desire to see competent, entirely
independent, directors in the boardroom overseeing the Company. As
owners of approximately 11.9% of the Company's outstanding shares, our
interests are fully aligned with those of all shareholders.

We would also note that, on information and belief, we are aware that
the Company or its representatives have recently contacted certain of
our suggested director nominees to join the Board. To this, we would
say, if the Company is already interested in our candidates, why should
it matter that we are suggesting the candidates? In a meritocratic
manner we believe the best qualified
candidates with the most relevant
skillsets should be elected to the Hudbay Board.

For Waterton, this campaign is about the facts. The facts are that
Hudbay is underperforming because of its culture of entrenchment; lack
of real leadership in the C-suite; lack of necessary engagement in the
boardroom; and a lack of key industry skills and expertise.

Focusing on the facts, we would ask shareholders to do a factual "like
for like" comparison of the current Hudbay Board and Waterton's proposed
slate to determine which slate has the more relevant professional
expertise and experience to substantively hold the Company's management
to account and put Hudbay back on the path to prosperity. The
answer is clear and categorical: it's the Waterton slate
.

Our proposed directors together with the continuing directors will have
the ability to finally free Hudbay from its culture of entrenchment and
guide the Company in a manner that unlocks and maximizes value for all
shareholders. It's time for change.

Sincerely,

Isser Elishis
Chief Investment Officer

About Waterton

Waterton is
a leading private equity firm dedicated to developing high quality
resource assets in stable jurisdictions. Waterton's founding team has a
successful track record of originating, structuring, managing and
exiting investments through acquisitions, joint ventures and
partnerships, across a range of sectors and asset classes. Waterton's
core strength is its cross-functional, fully-integrated, in-house team
of professionals who possess significant mining, financial and legal
expertise. Waterton's team employs a proactive approach to asset
management, leveraging significant sector knowledge and extensive
industry relationships to support the firm's investment activities.

Additional Information:

The information contained in this press release does not and is not
meant to constitute a solicitation of a proxy within the meaning of
applicable securities laws. As there is currently no record or meeting
date for the Annual Meeting, Waterton is not at this time asking Hudbay
shareholders to execute a proxy in favour of any matter, including the
election of Waterton's proposed nominees. In connection with the
upcoming Annual Meeting, Waterton may file a dissident information
circular in due course in compliance with applicable securities laws.

Notwithstanding the foregoing, Waterton is voluntarily providing the
disclosure required under section 9.2(4) of National Instrument 51-102 – Continuous
Disclosure Obligations
and section 150(1.2) of the Canada
Business Corporations Act
in accordance with Canadian securities and
corporate laws applicable to public broadcast solicitations. In
connection therewith, certain information regarding, among other things,
Waterton's nominees has been provided below.

The table below sets out, in respect of each of Waterton's proposed
nominees, his or her name, province or state and country of residence,
his or her principal occupation, business or employment within the five
preceding years, and the number of shares beneficially owned, or
controlled or directed, directly or indirectly, by such nominee.

Name
Province/State,
Country of
Residence

   

Present and Past 5 Years' Principal
Occupation,
Business or Employment

   

Number of Common
Shares Beneficially
Owned
or Controlled

(Directly or Indirectly)

Peter Kukielski
British Columbia, Canada

   

Mining Executive. Most recently, President and Chief Executive
Officer, Nevsun.
Prior thereto, Chief Executive Officer,
Anemka Resources and, prior thereto,
Entrepreneur in
Residence, Warburg Pincus.

    25,000
Richard Nesbitt
Ontario, Canada
   

Mr. Nesbitt is retired. Formerly, Chief Executive Officer and
President,
The Global Risk Institute in Financial Services
and, prior thereto,
Chief Operating Officer of Canadian
Imperial Bank of Commerce.

    Nil
Arthur Edward Michael Anglin(1)(2)
California, US
   

Mr. Anglin is retired. Mr. Anglin is the Chair of the Board of SSR
Mining.

    Nil
David Deisley
Utah, US
   

Mr. Deisley is retired. Formerly, Executive Vice President &
General Counsel, NOVAGOLD.

    Nil

Emily Moore
Ontario, Canada

 

   

Director of the Troost Institute for Leadership Education in
Engineering
and associate professor in the Institute for
Studies in
Transdisciplinary Engineering Education and
Practice, University of Toronto.
Prior thereto, Ms. Moore
worked at Hatch as Director of Technology Development,
and
later as Managing Director for water and for innovation.

    Nil

Daniel Muniz Quintanilla
Mexico City, Mexico

 

   

Businessman. Formerly, Managing Director & Executive Vice
President,
Americas Mining, Managing Director (CEO) &
Executive President,
Industrial Minera Mexico. Prior thereto,
Chief Financial Officer, Grupo Mexico.

    Nil

Ernesto Balarezo
Lima, Peru

 

   

Corporate Director. Prior thereto, Executive Vice President for
the Americas,
Gold Fields, and CEO of Gold Fields La Cima.

    Nil

David Smith
British Columbia, Canada

 

   

Corporate Director. Prior thereto, Chief Financial Officer and
Executive
Vice President of Finning International.

    Nil
(1)  

Mr. Anglin was a director of EmberClear Corp. until September 8,
2014. EmberClear was the subject of cease trade orders issued by
each
of the Alberta Securities Commission, British Columbia Securities
Commission and Ontario Securities Commission on
October 30,
2014, November 5, 2014 and November 17, 2014, respectively. The
cease trade orders were issued due to
EmberClear's failure to
file annual audited financial statements for the year ended June
30, 2014 and the related management's
discussion and
analysis. The cease trade orders against EmberClear were revoked
in January 2015.

(2)

Mr. Anglin serves as Chairman of Laguna Gold, a private Australian
company that was put into receivership on December 18, 2018.

 

The information contained herein and any solicitation made by Waterton
in advance of the upcoming Annual Meeting is, or will be, as applicable,
made by Waterton and not by or on behalf of the management of Hudbay.
All costs incurred for any solicitation will be borne by Waterton,
provided that, subject to applicable law, Waterton may seek
reimbursement from Hudbay of Waterton's out-of-pocket expenses,
including proxy solicitation expenses and legal fees, incurred in
connection with a successful reconstitution of the Board.

Waterton is not soliciting proxies in connection with the upcoming
Annual Meeting at this time. Waterton may engage the services of one or
more agents and authorize other persons to assist in soliciting proxies
on behalf of Waterton. Waterton has retained Kingsdale Advisors as its
proxy advisor. Kingsdale Advisor's responsibilities will principally
include soliciting shareholders should Waterton commence a formal
solicitation of proxies, providing strategic advice and advising
Waterton with respect to the meeting and proxy protocol. Any proxies
solicited by or on behalf of Waterton, including by Kingsdale Advisors
or any other agent, may be solicited pursuant to a dissident information
circular or by way of public broadcast, including through press
releases, speeches or publications and by any other manner permitted
under Canadian corporate and securities laws. Any such proxies may be
revoked by instrument in writing executed by a Hudbay shareholder or by
his or her attorney authorized in writing or, if the shareholder is a
body corporate, by an officer or attorney thereof duly authorized or by
any other manner permitted by law.

None of Waterton nor, to its knowledge, any of the proposed director
nominees or any of its or their respective associates or affiliates has
any material interest, direct or indirect, (i) in any transaction since
the beginning of Hudbay's most recently completed financial year or in
any proposed transaction that has materially affected or would
materially affect Hudbay or any of its subsidiaries; or (ii) by way of
beneficial ownership of securities or otherwise, in any matter to be
acted on by Hudbay at its upcoming Annual Meeting, other than the
election of directors to the Board.

Hudbay's principal office address is 25 York Street, Suite 800, Toronto,
ON M5J 2V5.

SOURCE

Waterton Global Resource Management, Inc.

1   Total Shareholder Return calculated from May 12, 2017 to December
31, 2018.
2

We believe an appropriate peer group for Hudbay should only
include companies that (i) have a market capitalization
of
greater than US$500 million, (ii) have material exposure to the
Americas, (iii) have copper comprising greater than
50% of
reserves, and (iv) are publicly listed on a major stock exchange,
and not the peer group described in Hudbay's public disclosure.

3 Total Shareholder Return calculated as of close October 4, 2018, the
day before Waterton's first public comments regarding Hudbay.
4 Hudbay's self-selected peers, as described in its public disclosure.
5 Date Alan Hair became the Chief Operating Officer of Hudbay.
6 Alan Hair became the Chief Executive Officer of Hudbay on January 1,
2016.
 

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