The ratings agency also upgraded the company’s probability of default rating to Ba3-PD from B1-PD and senior unsecured notes ratings to B1 from B2. Moody’s upgraded the speculative grade liquidity rating to SGL-1 from SGL-2, with the outlook changing to stable from positive, News.az reports, citing CNN.
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“The upgrade reflects Hudbay having reduced debt meaningfully on the back of higher copper and gold prices and solid operating results. Furthermore, the optimization of Copper Mountain reduces concentration and costs, while the joint venture at Copper World mitigates risks associated with future capital expenditures,” stated Jamie Koutsoukis, Moody’s Ratings analyst.
The Toronto-based mining company operates the Constancia mine in Cusco, Peru, the Snow Lake operations in Manitoba, Canada, and the Copper Mountain mine in British Columbia, Canada. The company’s project pipeline includes the Copper World project in Arizona and the Mason project in Nevada.
Hudbay’s rating benefits from mine locations in Canada and Peru, product diversity beyond copper including gold, silver, zinc and molybdenum, adjusted debt to EBITDA expected to remain well below 2x, and long reserve lives at its operations. Constancia mine has 17 years of reserves, Lalor/Snow Lake operations have 13 years, and Copper Mountain has 19 years.
The rating is constrained by modest scale, with 2025 consolidated copper production of 118,188 tonnes and 267,934 ounces of gold, current concentration of operating cash flows to two producing mines, and exposure to commodity price risk.
Consolidated copper production will remain relatively flat through 2026, followed by an increase in 2027 due to optimization activities at the Copper Mountain mine. Consolidated gold production is projected to decline in 2026 and 2027 compared to 2025, primarily due to the completion of mining at the higher-grade Pampacancha deposit at the Constancia mine in Peru.
The Copper World joint venture reduces capital spending risk by lowering initial funding requirements. The $600 million strategic investment from Mitsubishi introduces third-party capital at the project level, minimizing Hudbay’s equity commitment and reducing reliance on additional corporate debt to finance construction.
Moody’s assigned Hudbay a very good liquidity rating. The company’s liquidity sources include $569 million of cash at December 31, 2025, with a pro-forma cash balance of $922 million including the closing of the Mitsubishi transaction, and about $425 million of availability under its $450 million secured credit facility expiring November 13, 2028.
Moody’s expects negative free cash flow of $250 million in 2026, using a $4.30 per pound copper price and a $3,400 per ounce gold price, with $473 million in notes due April 2026.
The stable outlook reflects expectations that Hudbay will have steady operating performance at its mines and will maintain financial discipline with financial leverage sustained below 2.5x.
