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

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
Directors

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
  concerns 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
  markets 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
  Hudbay…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 contactus@kingsdaleadvisors.com.

Visit www.NewHudbay.com
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 www.sedar.com
or on www.newhudbay.com).

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 www.sedar.com
or on the Electronic Data Gathering, Analysis, and Retrieval at www.sec.gov.
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.
²
Permission to quote Glass Lewis was neither sought nor obtained.
Emphasis added.

Contacts

Investors
Kingsdale Advisors
Toll-Free (within North
America): 1-888-518-1563
Call Collect (outside North America):
1-416-867-2272
E-mail: contactus@kingsdaleadvisors.com

Media
Sloane & Company
Dan Zacchei / Joe Germani:
1-212-486-9500
E-mail: Dzacchei@sloanepr.com
/ JGermani@sloanepr.com