Both ISS and Glass Lewis Recommend Hudbay Shareholders Vote for Election of Waterton Nominees on the Blue Card

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    Joins Glass Lewis in Supporting Waterton’s Case for Board Refreshment
    and Recommends Shareholders Vote on Waterton’s Blue Proxy Card FOR
    Election of
    David Smith and Daniel Muniz Quintanilla as Hudbay

    Waterton Urges Fellow Hudbay Shareholders to Vote for All Four of
    Waterton’s Independent, Highly-Qualified Nominees to the Board

    Vote on the BLUE Proxy and Submit Prior
    to 5:00 p.m. (Eastern time) on Thursday May 2, 2019

    TORONTO–(BUSINESS WIRE)–Waterton Precious Metals Fund II Cayman, LP (“Waterton Mining LP”) and
    Waterton Mining Parallel Fund Offshore Master, LP (“Waterton Fund II”),
    each of which are managed by Waterton Global Resource Management, Inc.
    (“WGRM,” and collectively with Waterton Mining LP and Waterton Fund II,
    “Waterton”), owning in the aggregate 12.09% of the issued and
    outstanding common shares (the “Shares”) of Hudbay Minerals Inc.
    (“Hudbay” or the “Company”) (TSX:HBM) (NYSE:HBM) today announced that
    leading proxy advisory firm Institutional Shareholder Services Inc.
    (“ISS”) has joined Glass, Lewis & Co. (“Glass Lewis”) in recommending
    that shareholders vote FOR change at Hudbay on Waterton’s Blue proxy
    card. ISS recommended the election of Waterton’s independent,
    highly-qualified director nominees – David Smith and Daniel Muniz
    Quintanilla – to the Hudbay Board of Directors (the “Board”) at the
    Annual and Special Meeting of Shareholders (the “Meeting”).

    In its report, ISS said the following:1

    • The dissident has highlighted legitimate
      around the company’s operational performance and
      capital allocation strategy, which suggest that some degree of board
      change would be beneficial
    • It appears Hudbay has underperformed the ISS
      Peer Group
      median in terms of ROIC for
      four out of five completed fiscal years
      . While the company has
      recovered after completing its Constancia project, its pre-tax ROIC is
      still below 10 percent and below its WACC.”
    • The company has been trading at a discount to
      peers since early 2016
      , likely reflecting market concerns over
      the return on its substantial capex program and leverage…The substantial
      valuation gap persists
      even after the strong rally in the
      company shares since Oct. 2018.”
    • (I)t seems reasonable to assume that the dissident’s
      emphasis on improving capital allocation played a role in reassuring
      the company would steer in the right course. This point
      is reinforced when looking at past operational and valuation data.”
    • Dissident nominee Daniel Muniz Quintanilla has extensive experience
      overseeing copper mines in South America and the U.S. Having served as
      at the board and executive level for Southern Copper and Grupo Mexico,
      Muniz has gained experience working for large
      cap companies
      in the industry, which may be beneficial for
      Hudbay as it transitions from a mid-tier to a larger producer.”
    • (S)hareholders are also advised to consider the removal of Kenneth
      Stowe – one of the three incumbents targeted by the dissident, and
      arguably one of the directors most accountable for the company’s past
      performance, given his eight-year tenure.”

    Previously, Glass Lewis said:2

    • We are ultimately inclined to suggest the
      Dissident’s core case
       – i.e. that Hudbay has a value
      destructive capital management and project development track record
      and a disconcerting willingness to employ starkly regressive and
      misleading tactics to deter shareholder action — holds
      water here
    • Indeed, recent and conspicuously-timed rebound notwithstanding, we
      believe the bulk of Hudbay’s performance
      over the last several years demonstrates an objectively substandard
      commitment to preserving and improving shareholder value
    • [A] closer look suggests all is not well at
      …a broader review of the Company’s returns suggests
      Hudbay has continually and uniformly lagged its closest industry peers
      across substantially any unaffected measurement period, including
      those falling after completion of Constancia. This trend only appears
      to invert across measurement periods falling after initiation of
      Waterton’s campaign, an unambiguously atypical
      swing which management nevertheless attempts to frame as substantially
      or entirely attributable to Hudbay’s own efforts

    Isser Elishis, Chief Investment Officer of Waterton Global Resource
    Management, commented: “We are extremely pleased that both ISS and Glass
    Lewis have supported our case for change to the Hudbay Board. Waterton
    continues to believe our nominees have the right experience and
    expertise to help Hudbay unlock its significant potential and urges
    shareholders to vote FOR the election of all four of our nominees –
    Peter Kukielski, Richard Nesbitt, Daniel Muniz Quintanilla and David
    Smith. We are confident our nominees are well-positioned to provide
    Hudbay with the best opportunity for long-term value creation.”

    Waterton urges shareholders to vote for the Waterton Nominees on the BLUE
    form of proxy and/or BLUE voting
    instruction form by 5:00 p.m. (Eastern time) on
    Thursday, May 2, 2019
    . Shareholders willing to express their
    support for the Waterton Nominees may contact Kingsdale Advisors, our
    strategic shareholder advisor and proxy solicitation agent, at
    1-888-518-1563 toll-free in North America, or at 416-867-2272 outside of
    North America (collect calls accepted), or by email at [email protected].

    for additional information.

    About Waterton

    Waterton is an investment firm that manages capital for global
    institutional investors, sovereign wealth funds and endowments. The firm
    has ~US$2 billion in assets under management and focuses solely on the
    metals and mining sector. Waterton has a culture of thoroughness and a
    disciplined approach to capital allocation, and utilizes its significant
    industry expertise to produce out-sized risk-adjusted returns.

    Legal Notices and Disclaimers

    The data, information and opinions contained or referenced herein
    (collectively, the “Information”) is for general informational purposes
    only for the holders of Shares (“Shareholders”) in order to provide the
    views of Waterton regarding certain changes we are requesting to the
    composition of the Board, and other matters which Waterton believes to
    be of concern to Shareholders described herein. The Information is not
    tailored to specific investment objectives, the financial situation,
    suitability, or particular need of any specific person(s) who may
    receive the Information, and should not be taken as advice in
    considering the merits of any investment decision. The views expressed
    in the Information represent the views and opinions of Waterton, whose
    opinions may change at any time and which are based on analyses of
    Waterton and its advisors. Unless otherwise indicated, the Information
    has been derived or obtained from public disclosure and filings with
    respect to and/or made by Hudbay and other issuers that we consider to
    be comparable to Hudbay, and from other third party reports (see “Legal
    Notices and Disclaimers – Disclaimer Respecting Publicly Sourced
    Information” in Waterton’s information circular dated April 15, 2019
    (the “Waterton Circular”), a copy of which is available on SEDAR at
    or on

    The Information contains forward-looking statements or forward-looking
    information within the meaning of applicable securities laws
    (collectively, “forward-looking statements”), including, without
    limitation, Waterton’s and Hudbay’s respective priorities, plans and
    strategies for Hudbay and certain members of Hudbay’s operational,
    compensation and other noted peer groups’ anticipated financial and
    operating performance and business prospects. All statements and
    information, other than statements of historical fact, included herein
    are forward-looking statements, including, without limitation,
    statements regarding activities, events or developments that Waterton
    expects or anticipates may occur in the future. Certain forward-looking
    statements contained herein may be considered to be future-oriented
    financial information or a financial outlook for the purposes of
    applicable securities laws. These forward-looking statements can be
    identified by the use of forward-looking words such as “will,” “expect,”
    “intend,” “plan,” “estimate,” “anticipate,” “believe” or “continue” or
    similar words and expressions or the negative thereof. There can be no
    assurance that the plans, intentions or expectations upon which these
    forward-looking statements are based will occur or, even if they do
    occur, will result in the performance, events or results expected.

    We caution readers not to place undue reliance on forward-looking
    statements contained herein, which are not a guarantee of performance,
    events or results and are subject to a number of known and unknown risks
    and uncertainties, including but not limited to those set forth in the
    Waterton Circular under the heading “Legal Notices and Disclaimers –
    Forward-Looking Statements” and those risks and uncertainties detailed
    in the continuous disclosure and other filings of Hudbay and certain
    members of Hudbay’s operational, compensation and other noted peer
    groups with applicable securities regulators, copies of which are
    available on SEDAR at
    or on the Electronic Data Gathering, Analysis, and Retrieval at
    We urge you to carefully consider those risks and uncertainties. The
    forward-looking statements contained herein are expressly qualified in
    their entirety by this cautionary statement. Unless expressly stated
    otherwise, the forward-looking statements included herein are made as of
    the date hereof and Waterton disclaims any obligation to publicly update
    such forward-looking statements, except as required by applicable law.

    1 Permission to quote
    ISS was neither sought nor obtained. Emphasis added.
    Permission to quote Glass Lewis was neither sought nor obtained.
    Emphasis added.


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