EX-4.15 2 a14-7128_32ex4d15.htm EX-4.15

Exhibit 4.15

This document is important and requires your immediate attention. If you are in any doubt as to how to deal with it, you should consult your investment advisor, stockbroker, bank, trust company or other nominee.

April 24, 2014

NOTICE OF CHANGE

of the information relating to

HudBay Minerals Inc.’s offer to purchase

all of the issued and outstanding common shares of

AUGUSTA RESOURCE CORPORATION

for consideration per Augusta Share of
0.315 of a Hudbay Share

HudBay Minerals Inc. (the “Offeror”) has prepared this notice of change of information (the “Notice of Change”) to update certain disclosure in its offer dated February 10, 2014, as amended by the Notice of Variation and Extension dated March 14, 2014 and the Notice of Variation and Extension dated March 31, 2014 (collectively, the “Offer”), to purchase, on and subject to the terms and conditions of the Offer, as amended, all of the issued and outstanding common shares (the “Augusta Shares”) of Augusta Resource Corporation (“Augusta”), other than any Augusta Shares held directly or indirectly by the Offeror and its affiliates, including any Augusta Shares that may become issued and outstanding after February 10, 2014 but before 5:00 p.m. (Toronto Time) on May 5, 2014, upon the exercise, exchange or conversion of any securities of Augusta exercisable or exchangeable for, convertible into or otherwise conferring a right to acquire, any Augusta Shares, including, any option, warrant or convertible debenture (“Convertible Securities”), together with the associated rights issued under Augusta’s Shareholder Rights Plan.

THE OFFER REMAINS OPEN FOR ACCEPTANCE UNTIL 5:00 P.M. (TORONTO TIME) ON MAY 5, 2014 (THE “EXPIRY TIME”).

This Notice of Change should be read in conjunction with the Offer and original take-over bid circular (the “Original Circular”) dated February 10, 2014, as previously amended (the Offer together with the Original Circular collectively referred to as the “Original Offer and Circular”), and the letter of transmittal (the “Letter of Transmittal”) and notice of guaranteed delivery (the “Notice of Guaranteed Delivery”) that accompanied the Original Offer and Circular. The Original Offer and Circular, as amended previously and by this Notice of Change collectively constitute the “Offer and Circular”. Except as otherwise set forth herein, the terms and conditions previously set forth in the Original Offer and Circular, Letter of Transmittal and Notice of Guaranteed Delivery, each as previously amended, continue to be applicable in all respects. All references to the “Circular” or the “Offer and Circular” in the Original Offer and Circular, the Letter of Transmittal, the Notice of Guaranteed Delivery and this Notice of Change mean the Original Offer and Circular as amended hereby. Unless the context requires otherwise, capitalized terms used herein but not defined herein that are defined in the Original Offer and Circular have the respective meanings given to them in the Original Offer and Circular.

The offering of Hudbay Shares pursuant to the Offer is made by a Canadian issuer that is permitted, under a multi-jurisdictional disclosure system adopted by the United States, to prepare the Offer and Circular in accordance with the disclosure requirements of Canada. The Offer is subject to applicable disclosure requirements in Canada. Augusta Shareholders should be aware that such requirements are different from those of the United States and may differ from those in other jurisdictions. Financial statements included or incorporated by reference in the Offer and Circular have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board and are subject to Canadian auditing standards and auditor independence rules, and thus may not be comparable to financial statements of United States companies or companies incorporated in other jurisdictions. Augusta Shareholders in the United States should be aware that the disposition of Augusta Shares and acquisition of Hudbay Shares by them as described in the Offer and Circular may have tax consequences in the United States,

Canada and other jurisdictions. Such consequences may not be fully described in the Offer and Circular and such holders are urged to consult their tax advisors. The enforcement by Augusta Shareholders of civil liabilities under U.S. federal or state securities laws or applicable laws of other jurisdictions may be affected adversely by the fact that the Offeror is incorporated under and governed by the laws of Canada, that its officers and directors may be residents of jurisdictions other than the United States or such other jurisdictions, that the experts named in the Circular may be residents of jurisdictions other than the United States or such other jurisdictions, that all or a substantial portion of the assets of the Offeror and such persons may be located outside the United States or such other jurisdictions, that some of Augusta’s officers and directors are resident outside the United States or such other jurisdictions and that all or a substantial portion of the assets of Augusta and Augusta’s officers and directors may be located outside the United States or such other jurisdictions.

THE HUDBAY SHARES AND THE OFFER HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION (“SEC”) OR ANY OTHER SECURITIES REGULATORY AUTHORITY, NOR HAS THE SEC OR ANY OTHER SUCH AUTHORITY PASSED UPON THE ACCURACY OR ADEQUACY OF THE OFFER AND CIRCULAR. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

Prospective investors should be aware that, during the period of the Offer, the Offeror or its affiliates, directly or indirectly, may bid for or make purchases of the securities to be distributed or to be exchanged, or certain related securities, as permitted by applicable laws or regulations of Canada or its provinces or territories. Neither the Offeror nor any of its affiliates intends to make any such purchases during the period of the Offer.

Information has been incorporated by reference in the Offer and Circular from documents filed with the securities commissions or similar authorities in Canada. Copies of the documents incorporated by reference in the Offer and Circular are available electronically on SEDAR and EDGAR at www.sedar.com and www.sec.gov, respectively.

The Depositary for the Offer is:		Information Agent for the Offer is:

Equity Financial Trust Company		Kingsdale Shareholder Services

The Dealer Managers for the Offer are:

In Canada		In the United States

GMP Securities L.P.	BMO Nesbitt Burns Inc.	Griffiths McBurney Corp.	BMO Capital Markets Corp.

Augusta Shareholders who have validly deposited and not withdrawn their Augusta Shares need take no further action to accept the Offer.

Registered Augusta Shareholders who wish to accept the Offer must properly complete and execute the Letter of Transmittal (printed on YELLOW paper) that accompanied the Original Offer and Circular, or a manually executed facsimile thereof, and deposit it, at or prior to the Expiry Time, together with certificate(s) or Direct Registration System (DRS) Advices representing their Augusta Shares and all other required documents, with Equity Financial Trust Company (the “Depositary”) at its office in Toronto, Ontario specified in the Letter of Transmittal, in accordance with the instructions set out in the Letter of Transmittal (as set out in Section 3 of the Original Offer, “Manner of Acceptance — Letter of Transmittal”). Alternatively, registered Augusta Shareholders may accept the Offer by following the procedure for guaranteed delivery set out in Section 3 of the Original Offer, “Manner of Acceptance — Procedure for Guaranteed Delivery”, using the Notice of Guaranteed Delivery (printed on GREEN paper) that accompanied the Original Offer and Circular, or a manually executed facsimile thereof. Augusta Shareholders who hold their Augusta Shares with an investment advisor, stockbroker, bank, trust company or other nominee will not have received a Letter of Transmittal or Notice of Guaranteed Delivery, and should follow the instructions set out by such nominee to tender their Augusta Shares.

Persons whose Augusta Shares are registered in the name of an investment advisor, stockbroker, bank, trust company or other nominee should contact such nominee for assistance if they wish to accept the Offer in order to take the necessary steps to be able to deposit such Augusta Shares under the Offer. Nominees likely have established tendering cut-off times that are up to 48 hours prior to the Expiry Time.

Augusta Shareholders must instruct their investment advisor, stockbroker, bank, trust company or other nominee promptly if they wish to tender.

Augusta Shareholders will not be required to pay any fee or commission if they accept the Offer by depositing their Augusta Shares directly with the Depositary or if they make use of the services of a Soliciting Dealer to accept the Offer.

Questions and requests for assistance may be directed to Kingsdale Shareholder Services (the “Information Agent”), who can be contacted at 1-866-229-8874 toll free in North America or at 1-416-867-2272 outside of North America or by e-mail at contactus@kingsdaleshareholder.com; or to the Depositary at the addresses indicated on the last page of this document and additional copies of this document, the Original Offer and Circular, the Letter of Transmittal and the Notice of Guaranteed Delivery, or any documents incorporated by reference or otherwise related to the Offer, may be obtained, without charge, upon request from the Depositary or the Information Agent at their respective offices shown on the last page of this document, and are accessible on the Canadian Securities Administrators’ website at www.sedar.com, on EDGAR at www.sec.gov and on the Offeror’s website at www.hudbayminerals.com. These website addresses are provided for informational purposes only and no information contained on, or accessible from, these websites is incorporated by reference in the Offer and Circular unless otherwise expressly indicated in the Offer and Circular.

The information contained in this document is current only as of the date of this document. The Offeror does not undertake to update any such information except as required by applicable Law. Information in this document and in the Original Offer and Circular related to Augusta has been compiled from public sources — see “INFORMATION CONCERNING AUGUSTA” in the Original Offer and Circular.

No broker, dealer, salesperson or other person has been authorized to give any information or make any representation other than those contained in this Notice of Change or the Original Offer and Circular, and, if given or made, such information or representation must not be relied upon as having been authorized by the Offeror, the Depositary, the Information Agent or the Dealer Managers.

ADDITIONAL NOTICE TO UNITED STATES SHAREHOLDERS

AND OTHER SHAREHOLDERS OUTSIDE CANADA

The Offer is subject to Section 14(d) of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), Regulation 14D promulgated by the SEC thereunder, Section 14(e) of the Exchange Act, and Regulation 14E promulgated by the SEC thereunder.

The Offeror has filed with the SEC a registration statement on Form F—10, which contains a prospectus relating to the Offer, a tender offer statement on a Schedule TO and other documents and information, as such documents have been amended, modified, supplemented or restated. AUGUSTA SHAREHOLDERS AND OTHER INTERESTED PARTIES ARE URGED TO READ THESE DOCUMENTS, ALL DOCUMENTS INCORPORATED BY REFERENCE, ALL OTHER APPLICABLE DOCUMENTS AND ANY AMENDMENTS OR SUPPLEMENTS TO ANY SUCH DOCUMENTS WHEN THEY BECOME AVAILABLE, BECAUSE EACH CONTAINS OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE OFFEROR, AUGUSTA AND THE OFFER. Materials filed with the Canadian securities regulatory authorities are available electronically without charge at www.sedar.com. Materials filed with the SEC are available electronically without charge at the SEC’s website, www.sec.gov. All such materials may also be obtained without charge at the Offeror’s website, www.hudbayminerals.com or by directing a written or oral request to the Information Agent for the Offer, Kingsdale Shareholder Services, at 1-866-229-8874 toll free in North America or at 1-416-867-2272 or by e-mail at contactus@kingsdaleshareholder.com or to the Vice President, Legal and Corporate Secretary of the Offeror at 25 York Street, Suite 800, Toronto, Ontario, telephone 1-416-362-8181.

Neither this document nor the Original Offer and Circular generally addresses the income tax consequences of the Offer to Augusta Shareholders in any jurisdiction outside Canada or the United States. Augusta Shareholders in a jurisdiction outside Canada or the United States should be aware that the disposition of Augusta Shares may have tax consequences which may not be described in this document or the Original Offer and Circular. Accordingly, Augusta Shareholders outside Canada and the United States should consult their own tax advisors with respect to tax considerations applicable to them.

The Original Offer and Circular also contains a cautionary note regarding mineral reserve and resource estimates prepared in accordance with Canadian National Instrument 43-101 — Standards of Disclosure for Mineral Projects — see “CAUTIONARY NOTE REGARDING MINERAL RESERVES AND MINERAL RESOURCES” in the Original Offer and Circular.

NOTICE TO HOLDERS OF CONVERTIBLE SECURITIES

The Offer is made only for Augusta Shares, together with the associated rights issued under the Shareholder Rights Plan, and is not made for any options, warrants or convertible debentures or any other rights to acquire Augusta Shares. Any holder of Convertible Securities who wishes to accept the Offer should, subject to and to the extent permitted by the terms of such Convertible Securities and applicable Law, exercise, exchange or convert such Convertible Securities in order to obtain certificates representing Augusta Shares and deposit such Augusta Shares in accordance with the Offer. See Section 1 of the Original Offer, “The Offer”. Any such exercise, exchange or conversion must be completed sufficiently in advance of the Expiry Time to ensure that the holder of such Convertible Securities will have received certificates representing the Augusta Shares issuable upon such exercise, exchange or conversion in time for deposit prior to the Expiry Time, or in sufficient time to comply with the procedures described in Section 3 of the Original Offer, “Manner of Acceptance — Procedure for Guaranteed Delivery”.

The tax consequences to holders of Convertible Securities of exercising or not exercising such securities are not described in the Offer and Circular. Holders of such Convertible Securities should consult their own tax advisors with respect to the potential tax consequences to them in connection with the decision to exercise or not exercise such securities.

REPORTING CURRENCY AND CURRENCY EXCHANGE RATE INFORMATION

All dollar references in this document and the Original Offer and Circular are in Canadian dollars, except where otherwise indicated. On February 7, 2014, the Bank of Canada noon rate of exchange for the Canadian dollar, expressed in U.S. dollars, was Canadian $1.00 = United States $0.9076.

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS

This Notice of Change contains “forward-looking statements” and “forward-looking information” (collectively, “forward-looking information”) within the meaning of applicable Canadian and United States securities legislation. Forward-looking information includes information that relates to, among other things, statements with respect to the anticipated timing, mechanics and completion and settlement of the Offer (including the hearing by the British Columbia Securities Commission of the Offeror’s application to cease trade Augusta’s Shareholder Rights Plan). Forward-looking information is not, and cannot be, a guarantee of future results or events. Forward-looking information is based on, among other things, opinions, assumptions, estimates and analyses that, while considered reasonable by the Offeror at the date the forward-looking information is provided, inherently are subject to significant risks, uncertainties, contingencies and other factors that may cause actual results and events to be materially different from those expressed or implied by the forward-looking information. The material factors or assumptions that the Offeror identified and applied in drawing conclusions or making forecasts or projections set out in the forward looking information include, but are not limited to, the accuracy of Augusta’s public disclosure and that all conditions to completion of the Offer will be satisfied or waived.

The risks, uncertainties, contingencies and other factors that may cause actual results to differ materially from those expressed or implied by the forward-looking information may include, but are not limited to, the market value of the Hudbay Shares received as consideration under the Offer and the impact of such issuance on the market price of the Hudbay Shares, the exercising of dissent and appraisal rights by Augusta Shareholders should a Compulsory Acquisition or Subsequent Acquisition Transaction be undertaken, the reduced trading liquidity of Augusta Shares not deposited under the Offer, Augusta becoming a minority-owned or majority-owned subsidiary of the Offeror after consummation of the Offer, the possibility that the Offeror may remain a minority shareholder of Augusta after consummation of the Offer without the ability to control the management or direction of Augusta, the inaccuracy of Augusta’s public disclosure upon which the Offer is predicated, the triggering of change of control provisions in Augusta’s agreements leading to adverse consequences, as well as the risks discussed under the heading “Risk Factors” in the Original Offer and Circular and other documents filed with Canadian and U.S. securities regulatory authorities. Should one or more risk, uncertainty, contingency or other factor materialize or should any factor or assumption prove incorrect, actual results could vary materially from those expressed or implied in the forward-looking information. Accordingly, the reader should not place undue reliance on forward-looking information. The Offeror does not assume any obligation to update or revise any forward-looking information after the date of this Notice of Change or to explain any material difference between subsequent actual events and any forward-looking information, except as required by applicable law.

The Original Offer and Circular also contain forward looking information and this cautionary note should be read in conjunction with the Cautionary Note Regarding Forward Looking Statements in the Original Offer and Circular.

NOTICE OF CHANGE

April 24, 2014

TO: THE HOLDERS OF COMMON SHARES OF AUGUSTA RESOURCE CORPORATION

This Notice of Change amends and supplements the Original Offer and Circular, as previously amended, in order to revise and update the unaudited pro forma financial statements and summary financial information in the Original Offer and Circular to reflect the most recently reported financial results of the Offeror and Augusta.

The Offeror will not extend the Offer beyond May 5, 2014 unless, at or by that date, the remaining conditions to the Offer have been satisfied or waived, including the condition that the Shareholder Rights Plan has been waived, invalidated or cease-traded. The Offeror has applied to the British Columbia Securities Commission to cease trade the Shareholder Rights Plan prior to the Expiry Time and a hearing has been scheduled for April 29, 2014.

1. Amendments to the Offer and Circular

The first sentence of the first paragraph under the heading “Summary of the Offeror’s Historical and Pro Forma Financial Information” on page 36 of the Original Offer and Circular is hereby deleted and replaced by the following:

“Augusta Shareholders should refer to Schedule “B” to this Offer and Circular for the Offeror’s unaudited pro forma consolidated financial statements of the Offeror as at and for the year ended December 31, 2013, giving effect to the proposed acquisition of all of the issued and outstanding Augusta Shares in the manner set forth therein.”

The second paragraph under the heading “Summary of the Offeror’s Historical and Pro Forma Financial Information” on page 36 of the Original Offer and Circular is hereby deleted and replaced by the following:

“The tables set out below include a summary of (i) the Offeror’s historical consolidated financial information as at and for the years ended December 31, 2013 and 2012, prepared in accordance with IFRS, and (ii) the unaudited pro forma condensed consolidated financial information for the Offeror as at and for the year ended December 31, 2013. The historical financial information as at and for the years ended December 31, 2013 and 2012 has been derived from the Offeror’s consolidated financial statements, which are incorporated by reference herein. The unaudited pro forma consolidated financial information for the Offeror has been derived from the audited consolidated financial statements of the Offeror and Augusta for the year ended December 31, 2013.”

The second sentence of the third paragraph under the heading “Summary of the Offeror’s Historical and Pro Forma Financial Information” on page 36 of the Original Offer and Circular is hereby deleted and replaced by the following:

“The summary unaudited pro forma consolidated financial information for the Offeror gives effect to the proposed acquisition of Augusta as if it had occurred as at December 31, 2013, for the purposes of the pro forma consolidated balance sheet information and as at January 1, 2013 for the purposes of the pro forma consolidated statement of earnings for the year ended December 31, 2013.”

That certain table “Summary of Historical Financial Information of the Offeror” on page 37 of the Original Offer and Circular is hereby deleted and replaced by the following:

Summary of Historical Financial Information of the Offeror
(in millions of $ except per share information)

	Year ended December 31
	2013		2012(2)
Certain Income Statement Data
Revenue	516.8		702.6
Gross Profit	80.0		193.9
Results from operating activities	(6.9	)	101.7
(Loss) profit from continuing operations	(109.3	)	(23.5	)
Loss from discontinued operations, net of taxes	—		—
Loss for the period/year	(109.3	)	(23.5	)
Loss per share (basic and diluted)(1)	(0.59	)	(0.12	)
Ratio of earnings to fixed charges	(0.8	)	(3.6	)

	Year ended December 31
	2013	2012(2)
Certain Balance Sheet Data
Cash and cash equivalents	631.4	1,337.1
Property, plant and equipment	2,665.1	1,732.2
Current assets	925.2	1,527.7
Non-current assets	2,918.8	1,948.8
Total Assets	3,844.0	3,476.5
Current liabilities	342.0	345.7
Long-term debt	779.3	479.5
Equity	1,627.7	1,653.5
Total liabilities and equity	3,844.0	3,476.5
Book value per share	9.5	9.6

(1) Attributable to owners.

(2) The 2012 balances reflect adjustments related to the adoption of amended IAS 19, Employee Benefits, effective January 1, 2013. As a result of the amended standards, equity was decreased by $107.5 million as at December 31, 2012. In addition, net loss was increased by $2.3 million reflecting increased employee benefit expense.

That certain table “Summary of Unaudited Pro Forma Consolidated Financial Information of the Offeror” on page 38 of the Original Offer and Circular is hereby deleted and replaced by the following:

Summary of Unaudited Pro Forma Consolidated Financial Information of the Offeror

(in millions of $ except per share information)

	Year ended Dec-31 2013 100%		Year ended Dec-31 2013 33%		Year ended Dec-31 2013 51%
Certain Income Statement Data
Revenue	516.8		516.8		516.8
Gross Profit	80.0		80.0		80.0
Results from operating activities	(15.1	)	(6.9	)	(15.1	)
(Loss) profit for the period/year	(107.6	)	(103.2	)	(107.6	)
(Loss) profit attributable to owners of the Company	(99.6	)	(95.3	)	(96.4	)
(Loss) profit per share (basic and diluted)(1)	(0.47	)	(0.53	)	(0.51	)
Ratio of earnings to fixed charges	(0.7	)	(0.7	)	(0.7	)

Certain Balance Sheet Data
Cash and cash equivalents	620.7		618.4		620.7
Property, plant and equipment	3,342.6		2,665.1		3,352.1
Current assets	939.7		912.2		939.7
Non-current assets	3,565.2		3,027.2		3,574.7
Total assets	4,504.9		3,939.4		4,514.4
Current liabilities	449.4		342.0		449.4
Long-term debt	786.0		779.3		786.0
Equity	2,022.3		1,723.1		2,028.1
Total liabilities and equity	4,504.9		3,939.4		4,514.4

Book value per share	9.5		9.6		10.7

(1) Attributable to owners.

The paragraph under the heading “Consolidated Capitalization” on page 39 of the Original Offer and Circular is hereby deleted and replaced by the following:

“As at the date hereof, there have been no material changes in the Hudbay Share or loan capitalization of the Offeror since December 31, 2013, other than: (i) the issuance of 20,930,000 Hudbay Shares pursuant to an equity offering (the “Equity Offering”) and (ii) the draw down of approximately $56.5 million pursuant to the equipment financing facility the Offeror has entered into with Cat Financial (the “Equipment Financing Loan”). The following table sets forth the consolidated capitalization of the Company: (i) as at December 31, 2013; (ii) as at December 31, 2013 after giving effect to the Equity Offering and the Equipment Financing Loan and before giving effect to the Offer; (iii) as at December 31, 2013 after giving effect to the Equity Offering, the Equipment Financing Loan and the acquisition in the Offer of all of the issued and outstanding Augusta Shares; (iv) as at December 31, 2013 after giving effect to the Equity Offering, the Equipment Financing Loan and the acquisition in the Offer of 33% of the issued and outstanding Augusta Shares (including Augusta Shares held by the Offeror and its affiliates prior to the commencement of the Offer); and (v) as at December 31, 2013 after giving effect to the Equity Offering, the Equipment Financing Loan and the acquisition in the Offer of 51% of the issued and outstanding Augusta Shares (including Augusta Shares held by the Offeror and its affiliates prior to the commencement of the Offer).”

That certain table “Consolidated Capitalization” on page 39 of the Original Offer and Circular is hereby deleted and replaced by the following:

	Actual December 31, 2013		After giving effect to the Equity Offering and the Equipment Financing Loan before giving effect to the Offer			After giving effect to the Equity Offering, the Equipment Financing Loan and the Offer(6) 100%			After giving effect to the Equity Offering, the Equipment Financing Loan and the Offer(7) 33%			After giving effect to the Equity Offering, the Equipment Financing Loan and the Offer(8) 51%
	(Dollar amount in thousands)
Cash and cash equivalents(1)	$	631,427	$	797,031	(4)	$	786,308	(4)	$	784,031	(4)	$	786,308	(4)
Debt (including current maturities):
Existing Credit Facilities(2)	—		—			—			—			—
Other secured debt(3)	—		60,083			60,083			60,083			60,083
Total secured debt	—		60,083			60,083			60,083			60,083
Total senior unsecured debt	$	779,331	$	779,331		$	779,331		$	779,331		$	779,331
Long-term debt incurred in Offer (including current portion)(5)	—		—			106,146			—			106,146
Total debt	$	779,331	$	839,414		$	945,560		$	839,414		$	945,560
Equity:
Equity	$	1,627,707	$	1,627,707		$	1,627,707		$	1,627,707		$	1,627,707
Equity Offering(4)	—		165,604			165,604			165,604			165,604
Shares issued pursuant to the Offer	—		—			379,800			74,257			160,242
Total equity	$	1,627,707	$	1,793,311		$	2,173,111		$	1,867,568		$	1,953,553
Total capitalization(1)	$	2,407,038	$	2,632,725		$	3,118,671		$	2,706,982		$	2,899,113

(1) Reflects the United States dollar/Canadian dollar closing exchange rate as reported by the Bank of Canada as at December 31, 2013.

(2) As of December 31, 2013, there were no borrowings outstanding under the Credit Facility. As of December 31, 2013, the Offeror had commitments available to be borrowed under its credit facility of US$73 million (based on the maximum availability, equal to the lesser of US$100 million and a borrowing base related to accounts receivable and inventory of the Manitoba business unit); however, borrowing capacity was reduced by $64.1 million of letters of credit outstanding on such date.

(3) Does not include available credit facilities, including the undrawn portion of the equipment financing facility for the Constancia mobile fleet which the Offeror has entered into with Cat Financial. The equipment financing facility will be used to finance the purchase of up to approximately US$130 million of equipment.

(4) Reflects net proceeds from the Equity Offering of $165.6 million.

(5) On December 16, 2013, Augusta announced that it had closed an additional loan facility for US$26.6 million (the “Expanded Loan”) and had drawn down the first tranche of US$3.5 million. In connection with the Expanded Loan, Augusta paid an arrangement fee of US$1,120,000 and issued a total of 3.3 million Warrants to the lender with an exercise price of US$2.12 per share, subject to amendment if certain conditions are not met. The Warrants expire on December 12, 2016.

(6) Refer to the unaudited pro forma consolidated financial statements of the Offeror for the year ended December 31, 2013 attached as Schedule “B” to this Offer and Circular for details regarding the assumptions used to calculate the effect of the Offer.

(7) Refer to the unaudited pro forma consolidated financial statements of the Offeror for the year ended December 31, 2013 attached as Schedule “D” to this Offer and Circular for details regarding the assumptions used to calculate the effect of the Offer.

(8) Refer to the unaudited pro forma consolidated financial statements of the Offeror for the year ended December 31, 2013 attached as Schedule “E” to this Offer and Circular for details regarding the assumptions used to calculate the effect of the Offer.

Schedules “B”, “D” and “E” to the Original Offer and Circular are hereby deleted and replaced with the following:

SCHEDULE B

UNAUDITED PRO FORMA FINANCIAL STATEMENT

HudBay Minerals Inc.

Pro Forma Consolidated Financial Statements
(Unaudited)
December 31, 2013
(expressed in thousands of Canadian Dollars)

HudBay Minerals Inc.
Pro Forma Consolidated Financial Statements
(Unaudited) As at December 31, 2013

(expressed in thousands of Canadian Dollars)

	Hudbay $		Augusta $		Adjustments $		Note 4	Pro forma consolidated $
			(note 1)
Assets

Current assets
Cash and cash equivalents	631,427		2,412		(13,135	)	(b),(c),(f)	620,704
Trade and other receivables	168,298		8,156		—			176,454
Inventories	52,201		—		—			52,201
Prepaid expenses and other current assets	28,917		16,957		—			45,874
Other financial assets - current	807		146		—			953
Taxes receivable	37,644		—		—			37,644
Assets held for sale	5,864		—		—			5,864

Total current assets	925,158		27,671		(13,135	)		939,694

Receivables	57,376		—		—			57,376
Inventories	7,888		—		—			7,888
Prepaid expenses	574		—		—			574
Other financial assets - long-term	71,182		1,449		(34,126	)	(g),(h)	38,505
Intangible assets - computer software	13,573		1,485		—			15,058
Property, plant, and equipment	2,665,075		311,855		365,681		(d)	3,342,611
Goodwill	71,373		—		—			71,373
Deferred tax assets	31,787		—		—			31,787

Total assets	3,843,986		342,460		318,420			4,504,866

Liabilities

Current liabilities
Trade and other payables	218,898		4,707		—			223,605
Taxes payable	33		—		—			33
Other liabilities	41,139		3,194		—			44,333
Other financial liabilities - current	16,348		99,464		—			115,812
Deferred revenue	65,616		—		—			65,616

Total current liabilities	342,034		107,365		—			449,399

Other financial liabilities	23,039		3,848		—			26,887
Long-term debt	779,331		6,682		—		(e)	786,013
Deferred revenue	464,135		—		—			464,135
Provisions	146,062		—		—			146,062
Pension obligations	25,931		—		—			25,931
Other employee benefits	142,114		—		—			142,114
Deferred tax liabilities	293,633		3,583		144,810		(d)	442,026

Total liabilities	2,216,279		121,478		144,810			2,482,567

Shareholders’ Equity

Share capital (note 5)	1,021,088		235,031		144,769		(a),(c),(f),(i)	1,400,888
Reserves	49,557		28,734		(28,873	)	(a),(g),(h),(i)	49,418
Retained earnings	564,966		(42,783	)	57,714		(a),(b),(h)	579,897

Total equity attributable to Hudbay shareholders	1,635,611		220,982		173,610			2,030,203

Non-controlling interest	(7,904	)	—		—			(7,904	)

Total equity	1,627,707		220,982		173,610			2,022,299

Total liabilities and shareholders’ equity	3,843,986		342,460		318,420			4,504,866

The accompanying notes are an integral part of these pro forma consolidated financial statements.

HudBay Minerals Inc.
Pro Forma Consolidated Statement of Income
(Unaudited) For the year ended December 31, 2013

(expressed in thousands of Canadian Dollars)

	Hudbay $		Augusta $		Adjustments $		Note 4	Pro forma consolidated $
			(note 1)

Revenue	516,801		—		—			516,801

Cost of sales
Mine operating costs	360,085		—		—			360,085
Depreciation and amortization	76,714				—			76,714

	436,799		—		—			436,799

Gross profit	80,002		—		—			80,002

Selling and administrative expenses	39,956		6,737		—			46,693

Exploration and evaluation	23,286		1,493		—			24,779

Other operating income	(913	)	—		—			(913	)

Other operating expenses	9,197		—		—			9,197

Asset impairment loss	15,356		—		—			15,356

Results from operating activities	(6,880	)	(8,230	)	—			(15,110	)

Finance income	(3,494	)	(811	)	—			(4,305	)

Finance expenses	8,921		249		—			9,170

Other finance losses	43,697		(826	)	(8,414	)	(h),(i)	34,457

Net finance expense	49,124		(1,388	)	(8,414	)		39,322

Loss before tax	(56,004	)	(6,842	)	8,414			(54,432	)

Tax expense	53,272		(151	)	—			53,121

Loss for the year	(109,276	)	(6,691	)	8,414			(107,553	)

Attributable to
Owners of the Company	(101,359	)						(99,636	)
Non-controlling interests	(7,917	)						(7,917	)

Loss for the year	(109,276	)						(107,553	)

Loss per share attributable to owners of the Company
Basic and diluted (note 6)	(0.59	)						(0.47	)

Weighted average number of common shares outstanding
Basic and diluted (in thousands) (note 6)	172,048							212,452

The accompanying notes are an integral part of these pro forma consolidated financial statements.

HudBay Minerals Inc.
Notes to Pro Forma Consolidated Financial Statements
(Unaudited)
December 31, 2013

(expressed in thousands of Canadian Dollars)

1 Basis of presentation

The unaudited pro forma consolidated balance sheet of Hudbay Minerals Inc. (the “Company” or “Hudbay”) as at December 31, 2013 and the unaudited pro forma consolidated statement of income for the year ended December 31, 2013 have been derived by management based on financial statements prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), for illustrative purposes only, after giving effect to the proposed acquisition of Augusta Resource Corporation (“Augusta”) by the Company. Adjustments applied are directly attributable to the transaction, factually supportable, and expected to have a continuing impact. Terms not otherwise defined herein have the meanings given thereto in the Company’s offer and take-over bid circular dated February 10, 2014, as amended.

These unaudited pro forma consolidated financial statements have been compiled as follows:

a) an unaudited pro forma consolidated balance sheet giving effect to the transaction described in note 3, as if the transaction occurred on December 31, 2013 combining:

· the audited consolidated balance sheet of the Company as at December 31, 2013; and

· the audited consolidated statement of financial position of Augusta as at December 31, 2013.

b) an unaudited pro forma consolidated income statement for the year ended December 31, 2013, which assumes the transaction occurred as of January 1, 2013, combining:

· the audited consolidated income statement of the Company for the year ended December 31, 2013; and

· the audited consolidated statement of comprehensive loss of Augusta for the year ended December 31, 2013.

It is management’s opinion that these unaudited pro forma consolidated financial statements include all adjustments necessary for the fair presentation, in all material respects, of the transactions described in notes 3 and 4 in accordance with IFRS, applied on a basis consistent with the Company’s accounting policies. The unaudited pro forma consolidated financial information is not necessarily indicative of the results of operations that might be obtained in the future.

The unaudited pro forma consolidated financial statements should be read in conjunction with the historical consolidated financial statements and notes thereto of the Company and Augusta.

HudBay Minerals Inc.
Notes to Pro Forma Consolidated Financial Statements
(Unaudited)
December 31, 2013

(expressed in thousands of Canadian Dollars)

Augusta’s financial statements are presented in United States dollars. For the purposes of these unaudited pro forma consolidated financial statements, line items have been translated into Canadian dollars at the following rates:

· December 31, 2013 balance sheet at the exchange rate of $1.0636; and

· December 31, 2013 income statement at the average rate for the year of $1.0299.

All foreign exchange rates have been obtained from the Bank of Canada website. Unless where otherwise noted, these unaudited pro forma consolidated financial statements and their accompanying notes are presented in Canadian dollars.

Prior to the transaction described in note 3, the Company owned 23,058,585 shares of Augusta, which were recorded on the audited consolidated year-end balance sheet of the Company as at December 31, 2013 at a fair value of $34,127 (cost of $69,058).

The allocation of the preliminary purchase price to reflect the fair values of the assets acquired and liabilities assumed is based on management’s estimate of such assets and liabilities and, accordingly, the adjustments that have been included in the pro forma consolidated balance sheet may be subject to change. For purposes of these pro forma financial statements, the excess of the purchase price over the estimated fair value of the net assets acquired has been allocated to property, plant and equipment. The final purchase price allocations may differ materially from the allocations included herein.

2 Summary of significant accounting policies

These unaudited pro forma consolidated financial statements have been compiled using the significant accounting policies, as set out in the audited consolidated financial statements of the Company as at December 31, 2013. Management has determined, based on their initial assessment, that certain adjustments are necessary to conform Augusta’s audited consolidated financial statements to the accounting policies used by the Company in the preparation of its audited consolidated financial statements:

a) Stock based compensation - Augusta capitalizes stock based compensation related to personnel that service their development project to development costs. Hudbay expenses similar charges to various income statement accounts. The amount of the cumulative impact is unknown at the current time.

b) Deposits and prepayments on long-lead equipment - Augusta presents this as a separate financial statement line item. Hudbay groups these assets within prepaid expenses. An amount of $12,413 has been reclassified to conform to Hudbay policies.

HudBay Minerals Inc.
Notes to Pro Forma Consolidated Financial Statements
(Unaudited)
December 31, 2013

(expressed in thousands of Canadian Dollars)

3 The transaction

Proposed transaction

Hudbay has offered to purchase all of the issued and outstanding common shares of Augusta, other than any Augusta Shares held directly or indirectly by Hudbay and its affiliates, including any Augusta Shares that may become issued and outstanding after the date hereof but before the expiry time upon the exercise, exchange or conversion of any convertible securities, together with the associated rights issued under the Shareholder Rights Plan.

The transaction will be accounted for as a business combination with Hudbay identified as the acquirer. A summary of the allocation of the preliminary purchase price to the acquired assets and liabilities assumed is as follows:

		$
Preliminary purchase price
Hudbay share consideration (note 4(a(ii)))		379,800
Fair value of Augusta options settled in cash (note 4(f))		5,345
Fair value of Augusta warrants exchanged for Hudbay warrants (note 4(i))		642
Fair value of Augusta shares previously held by Hudbay (note 4(g))		68,276

Total consideration		454,063

HudBay Minerals Inc.
Notes to Pro Forma Consolidated Financial Statements
(Unaudited)
December 31, 2013

(expressed in thousands of Canadian Dollars)

The preliminary purchase price has been allocated to the following net assets based on their estimated fair values as of December 31, 2013:

	$	Pro forma presentation $

Assets acquired and liabilities assumed
Cash and cash equivalents (note 4(c),(f))		14,622

Accounts receivable	8,141
Due from related parties	15
Trade and other receivables		8,156

Prepaids and other	4,544
Deposits on long-lead equipment	12,413
Prepaid expenses and other current assets		16,957

Short-term investments	146
Other financial assets - current		146

Restricted funds	410
Other assets	1,039
Other financial assets		1,449

Other assets	1,485
Intangible assets - computer software		1,485

Development costs	193,812
Property, plant, and equipment	91,887
Mineral properties	26,156
Property, plant and equipment		311,855

Current liabilities		(107,365	)
Long-term liabilities		(10,530	)
Deferred tax liabilities		(148,393	)
Unallocated purchase price (note 1)		365,681

Total net assets acquired		454,063

The final purchase price and the fair value of the net assets of Augusta to be acquired will ultimately be determined after the closing of the transaction. Therefore, it is likely that the purchase price, including share consideration, and the fair values of assets acquired and liabilities assumed will vary from those shown above. These differences may be material. For purposes of sensitivity, a 10% increase in Hudbay share price is estimated to increase the purchase price by approximately $45,000.

HudBay Minerals Inc.
Notes to Pro Forma Consolidated Financial Statements
(Unaudited)
December 31, 2013

(expressed in thousands of Canadian Dollars)

4 Pro forma assumptions and adjustments

The unaudited pro forma consolidated financial statements reflect the following assumptions and adjustments to give effect to the acquisition of all of the issued and outstanding common shares of Augusta as described in note 3 as if the transactions had occurred on January 1, 2013 for statement of income items and December 31, 2013 for balance sheet items. Assumptions relating to the share price of Hudbay or Augusta have used the date of February 7, 2014 which represents the last trading day before February 10, 2014.

a) i) An adjustment to eliminate the historical equity accounts of Augusta.

ii) An adjustment to reflect the issuance of 40,404,237 Hudbay shares in exchange for 128,267,418 common shares of Augusta representing a share exchange ratio of 0.315 Hudbay share to 1 Augusta share. The closing price of Augusta shares on February 7, 2014 was $2.51. Future movements in share prices may impact the share numbers disclosed within.

b) An adjustment to reflect the transaction costs related to the transaction, including $7,000 of change of control payments and $13,000 in professional fees.

c) For purposes of pro forma presentation, no adjustment has been made to settle or convert the existing debt on Augusta’s statement of financial position on the assumption that this debt is out-of the money as at February 7, 2014.

On December 16, 2013, Augusta announced that it has closed an additional loan facility for US$26.6 million (the “Expanded Loan”) and has drawn down the first tranche of US$3.5 million. In connection with the Expanded Loan, Augusta paid an arrangement fee of US$1.12 million and issued a total of 3.3 million common share purchase warrants (“Warrants”) to the lender with an exercise price of US$2.12 per share, subject to amendment if certain conditions are not met. The Warrants expire on December 12, 2016.

An adjustment has been reflected for the impact of the exercise of these warrants upon change of control. The impact on the share consideration of the exercise of these warrants is an increase of $6,996 and the issuance of an additional 1,039,500 Hudbay common shares.

d) An adjustment to reflect the fair value of the property, plant, and equipment acquired, in excess of the book value and the resulting deferred tax liability, assuming an income tax rate of 39.6%. The applicable tax rate is based on the tax jurisdiction of the asset where it will be recovered through use.

e) On September 4, 2013, Augusta closed the first tranche for $2,000 of a previously announced financing for a total of $10,000 in convertible unsecured notes. The second tranche of $1,500 closed on September 19, 2013. The third tranche is assumed to have closed on October 25, 2013. The fourth tranche closed on October 25, 2013. Together, the third and fourth tranche totalled $3,250.

This disclosure is provided for informational purposes only.

HudBay Minerals Inc.
Notes to Pro Forma Consolidated Financial Statements
(Unaudited)
December 31, 2013

(expressed in thousands of Canadian Dollars)

f) An adjustment to reflect the cash paid for the fair value of stock options issued by Augusta of $5,345, outstanding as at February 7, 2014 which are estimated to be out of-the-money. The options have been valued using a Black-Scholes model, using the share price of Augusta as at February 7, 2014, and the following assumptions: exercise prices ($2.78 to $4.35), life of options (3.13 to 3.54 years), interest rate (1.13%) and volatility rates (90.8% to 92.2%).

All other options that are estimated to be in-the-money as February 7, 2014, are assumed to be converted into common shares of Augusta, with the corresponding exercise price received as proceeds of $5,214.

g) An adjustment to re-measure the fair value of the Company’s existing investment in Augusta held prior to acquisition of control. This investment is designated as an available-for-sale investment by Hudbay, carried at fair value and all fair value changes are recognized in other comprehensive income (OCI), except for other than temporary decline in values recognized in the statement of comprehensive loss.

h) An adjustment to eliminate the Company’s existing investment in Augusta as at December 31, 2013 and an adjustment to eliminate the related accumulated fair value gains (losses) in reserves. Correspondingly, recognized fair value changes in the statement of income are eliminated of $8,314 for the year ended December 31, 2013.

i) An adjustment to reflect the warrants issued by Hudbay in exchange for the warrants issued by Augusta, outstanding as at February 7, 2014. For purposes of pro forma presentation, the warrants issued by Augusta are assumed to be out-of-the money (except for those noted in 4(c)) and therefore not exercised. Based on the exchange share ratio of Hudbay shares for Augusta shares (note 4(a)) of 0.315 to 1, respectively, 564,386 warrants were issued on February 7, 2014. The warrants have been valued using a Black-Scholes model using the following assumptions: exercise price of $12.22, interest rates of 0.78% to 1.13%, life of warrants of 1.47 to 2.47 years and volatility rates of 40.4% to 40.7%.

An adjustment was also made to eliminate losses arising in the year ended December 31, 2013 from re-measurement of warrants issued by Augusta recognized in its statement of comprehensive income of $100.

j) All unvested restricted shares and restricted share units of Augusta are assumed to vest immediately on February 10, 2014. An adjustment is made for the issuance of the common shares of $2,058.

5 Pro forma share capital

	Number of shares (000s)	$

Hudbay’s common shares outstanding	172,078	1,021,088
Hudbay’s common shares issued under the proposed transaction (note 4(a))	40,404	379,800

Pro forma share capital	212,482	1,400,888

HudBay Minerals Inc.
Notes to Pro Forma Consolidated Financial Statements
(Unaudited)
December 31, 2013

(expressed in thousands of Canadian Dollars)

6 Pro forma loss per share

For the purposes of the unaudited pro forma consolidated financial statements, the loss per share has been calculated using the weighted average number of shares which would have been outstanding as at the year end, after giving effect to the transaction described in notes 3 and 4 as if it had occurred on January 1, 2013.

	$

Actual weighted average number of Hudbay shares outstanding (thousands)	172,048
Assumed number of Hudbay shares issued to Augusta shareholders (note 4(a)) (thousands)	40,404

Pro forma weighted average number of Hudbay shares outstanding (thousands)	212,452

Pro forma loss attributable to owners of the Company	(99,636	)
Pro forma loss per share - basic and diluted	(0.47	)

SCHEDULE D

UNAUDITED PRO FORMA FINANCIAL STATEMENT

HudBay Minerals Inc.

Pro Forma Consolidated Financial Statements
(Unaudited)
December 31, 2013
(expressed in thousands of Canadian Dollars)

HudBay Minerals Inc.
Pro Forma Consolidated Balance Sheet
(Unaudited) As at December 31, 2013

(expressed in thousands of Canadian Dollars)

	Hudbay $		Adjustments $		Note 4	Pro forma consolidated $

Assets

Current assets
Cash and cash equivalents	631,427		(13,000	)	(b)	618,427
Trade and other receivables	168,298		—			168,298
Inventories	52,201		—			52,201
Prepaid expenses and other current assets	28,917		—			28,917
Other financial assets	807		—			807
Taxes receivable	37,644		—			37,644
Assets held for sale	5,864		—			5,864

Total current assets	925,158		(13,000	)		912,158

Receivables	57,376		—			57,376
Inventories	7,888		—			7,888
Prepaid expenses	574		—			574
Investment in Augusta	—		142,532		(a)	142,533
Other financial assets - long-term	71,182		(34,126	)	(d)	37,055
Intangible assets - computer software	13,573		—			13,573
Property, plant and equipment	2,665,075		—			2,665,075
Goodwill	71,373		—			71,373
Deferred tax assets	31,787		—			31,787

Total assets	3,843,986		95,406			3,939,392

Liabilities

Current liabilities
Trade and other payables	218,898		—			218,898
Taxes payable	33		—			33
Other liabilities	41,139		—			41,139
Other financial liabilities - current	16,348		—			16,348
Deferred revenue	65,616		—			65,616

Total current liabilities	342,034		—			342,034

Other financial liabilities	23,039		—			23,039
Long-term debt	779,331		—			779,331
Deferred revenue	464,135		—			464,135
Provisions	146,062		—			146,062
Pension obligations	25,931		—			25,931
Other employee benefits	142,114		—			142,114
Deferred tax liabilities	293,633		—			293,633

Total liabilities	2,216,279		—			2,216,279

Shareholders’ Equity

Share capital	1,021,088		74,256		(a)	1,095,344
Reserves	49,557		(34,931	)	(d)	14,626
Retained earnings	564,966		56,081		(b), (c)	621,047

Total equity attributable to Hudbay shareholders	1,635,611		95,406			1,731,017

Non-controlling interests	(7,904	)	—			(7,904	)

Total equity	1,627,707		95,406			1,723,113

Total liabilities and shareholders’ equity	3,843,986		95,406			1,731,017

The accompanying notes are an integral part of these pro forma consolidated financial statements.

HudBay Minerals Inc.

Pro Forma Consolidated Financial Statements
(Unaudited)
December 31, 2013

(expressed in thousands of Canadian Dollars)

	Hudbay $		Adjustments $		Note 4	Pro forma consolidated $

Revenue	516,801		—			516,801

Cost of sales
Mining operating costs	360,085		—			360,085
Depreciation and amortization	76,714		—			76,714

	436,799		—			436,799

Gross profit	80,002		—			80,002

Selling and administrative expenses	39,956		—			39,956

Exploration and evaluation	23,286		—			23,286

Other operating income	(913	)	—			(913	)

Other operating expenses	9,197		—			9,197

Asset impairment loss	15,356		—			15,356

Results from operating activities	(6,880	)	—			(6,880	)

Finance income	(3,494	)	—			(3,494	)

Finance expenses	8,921		—			8,921

Other finance losses	43,697		(8,314	)	(d)	35,383

Net finance expense	49,124		(8,314	)		40,810

Share of investment in Augusta			(2,230	)	(e)	(2,230	)

Loss before tax	(56,004	)	6,084			(49,920	)

Tax expense	53,272		—			53,272

Loss for the year	(109,276	)	6,084			(103,192	)

Attributable to
Owners of the Company	(101,359	)	6,084			(95,275	)
Non-controlling interests	(7,917	)	—			(7,917	)

Loss for the year	(109,276	)	6,084			(103,192	)

Loss per share attributable to owners of the company
Basic and diluted (note 6)	(0.59	)				(0.53	)

Weighted average shares outstanding (thousands)
Basic and diluted (in thousands) (note 6)	172,048					179,948

The accompanying notes are an integral part of these pro forma consolidated financial statements.

HudBay Minerals Inc.
Notes to Pro Forma Consolidated Financial Statements
(Unaudited)
December 31, 2013

(expressed in thousands of Canadian Dollars)

1 Basis of presentation

The unaudited pro forma consolidated balance sheet of Hudbay Minerals Inc. (the “Company” or “Hudbay”) as at December 31, 2013 and the unaudited pro forma consolidated income statement for the year ended December 31, 2013 have been derived by management based on financial statements prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), for illustrative purposes only, after giving effect to the acquisition of a 33% interest in the share capital of Augusta Resource Corporation (“Augusta”) including common shares the Company owned prior to the Take-over Bid Circular, by the Company (note 3). Adjustments applied are directly attributable to the transaction, factually supportable, and expected to have a continuing impact. Terms not otherwise defined herein have the meanings given thereto in the Company’s offer and take0-over bid circular February 10, 2014, as amended.

These unaudited pro forma consolidated financial statements have been compiled as follows:

a) an unaudited pro forma consolidated balance sheet giving effect to the transaction described in note 3, as if the transaction occurred on December 31, 2013 based on:

· the audited consolidated balance sheet of the Company as at December 31, 2013; and

· information derived from the audited consolidated statement of financial position of Augusta as at December 31, 2013.

b) an unaudited pro forma consolidated income statement for the year ended December 31, 2013, which assumes the transaction occurred as of January 1, 2013, based on:

· the audited consolidated income statement of the Company for the year ended December 31, 2013; and

· information derived from the audited consolidated statement of comprehensive loss of Augusta for the year ended December 31, 2013.

The unaudited pro forma consolidated financial statements should be read in conjunction with the historical consolidated financial statements and notes thereto of the Company and Augusta.

· December 31, 2013 balance sheet at the exchange rate of $1.0636; and

HudBay Minerals Inc.
Notes to Pro Forma Consolidated Financial Statements
(Unaudited)
December 31, 2013

(expressed in thousands of Canadian Dollars)

· December 31, 2013 income statement at the average rate for the year of $1.0299.

Prior to the transaction described in note 3, the Company owned 23,058,585 shares of Augusta which were recorded on the audited consolidated year-end balance sheet of the Company at December 31, 2013 at a fair value of $34,127 (cost of $69,058).

The Company assumes it will have significant influence over Augusta subsequent to the transaction. The allocation of the preliminary purchase price to reflect the fair values of the identifiable net assets is based on management’s estimate of such assets and liabilities and, accordingly, the adjustments that have been included in the pro forma consolidated balance sheet may be subject to change. The final purchase price allocations may differ materially from the allocations included herein.

2 Summary of significant accounting policies

These unaudited pro forma consolidated financial statements have been compiled using the significant accounting policies, as set out in the audited consolidated financial statements of the Company as at December 31, 2013. Management has determined, based on their initial assessment, that certain adjustments maybe necessary to conform Augusta’s audited consolidated financial statements to the accounting policies used by the Company in the preparation of its audited consolidated financial statements:

a) Stock based compensation — Augusta capitalizes stock based compensation related to personnel that service their development project to development costs. Hudbay expenses similar charges to various income statement accounts. The amount of the cumulative impact is unknown at the current time.

3 The transaction

Proposed transaction

These pro forma financial statements have been prepared on the basis consistent with the terms of the Take-over Bid Circular, but under the assumption that Hudbay acquires 33% of the issued and outstanding common shares of Augusta, including any Augusta Shares held directly or indirectly by Hudbay and its affiliates prior to the Take-over Bid Circular.

HudBay Minerals Inc.
Notes to Pro Forma Consolidated Financial Statements
(Unaudited)
December 31, 2013

(expressed in thousands of Canadian Dollars)

The transaction will be accounted for as an investment in associate under the equity method. A summary of the allocation of the preliminary purchase price to the acquired assets and liabilities assumed is as follows:

		$

Preliminary purchase price
Hudbay share consideration (note 4(a))		74,256
Fair value of Augusta shares previously held by Hudbay (note 4(c))		68,276

Total consideration		142,532

The final purchase price and the Company’s share of Augusta’s fair value of the identifiable net assets acquired will ultimately be determined at the closing of the transaction. For these pro forma financial statements, the Company assumes that the fair value of net assets acquired is equal to the total consideration paid. It is likely that the purchase price, including share consideration, and the fair values of net assets acquired will vary from those shown above. These differences may be material. For purposes of sensitivity, a 10% increase in Hudbay share price is estimated to increase the purchase price by approximately $14,000.

4 Pro forma assumptions and adjustments

The unaudited pro forma consolidated financial statements reflect the following assumptions and adjustments to give effect to the acquisition of 33% of the issued and outstanding common shares of Augusta as described in note 3 as if the transactions had occurred on January 1, 2013 for statement of income items and December 31, 2013 for balance sheet items. Assumptions relating to the share price of Hudbay or Augusta have used the date of February 7, 2014 which represents the last trading day before February 10, 2014.

a) An adjustment to reflect the issuance of 7,899,596 Hudbay shares in exchange for 25,078,082 common shares of Augusta representing a share exchange ratio of 0.315 Hudbay share to 1 Augusta share and an adjustment to recognize the related investment in Augusta. The closing price of Augusta shares on February 7, 2014 was $2.51. Future movements in share prices may impact the share numbers disclosed within.

b) An adjustment to reflect the transaction costs of $13,000 in professional fees.

c) An adjustment to re-measure the fair value of the Company’s existing investment in Augusta held prior to investment becoming an associate. This adjustment is recognized under the “Reserves” account in the pro forma consolidated balance sheet. The investment is designated as an available-for-sale investment by Hudbay, carried at fair value and all fair value changes are recognized in other comprehensive income (OCI), except for declines in values which are significant or prolonged which are recognized in the Company’s consolidated income statement.

d) An adjustment to eliminate the Company’s existing investment in Augusta as at December 31, 2013, previously held as an available for sale investment and an adjustment to eliminate the related accumulated fair value gains (losses) in reserves. Correspondingly, recognized fair value changes in the statement of income are eliminated of $8,314 for the year ended December 31, 2013.

HudBay Minerals Inc.
Notes to Pro Forma Consolidated Financial Statements
(Unaudited)
December 31, 2013

(expressed in thousands of Canadian Dollars)

e) An adjustment to recognize Hudbay’s proportionate share of Augusta’s loss for the period.

5 Pro forma share capital

	Number of shares (000s)	$

Hudbay’s common shares outstanding	172,078	1,021,088
Hudbay’s common shares issued under the proposed transaction (note 4(a))	7,900	74,256

Pro forma share capital	179,978	1,095,344

6 Pro forma loss per share

	$

Actual weighted average number of Hudbay shares outstanding (thousands)	172,048
Assumed number of Hudbay shares issued to Augusta shareholders (note 4(a)) (thousands)	7,900

Pro forma weighted average number of Hudbay shares outstanding - basic (thousands)	179,948

Pro forma loss attributable to owners of the Company	(95,275	)
Pro forma loss per share — basic and diluted	(0.4453	)

SCHEDULE E

UNAUDITED PRO FORMA FINANCIAL STATEMENT

HudBay Minerals Inc.

Pro Forma Consolidated Financial Statements
(Unaudited)
December 31, 2013
(expressed in thousands of Canadian Dollars)

HudBay Minerals Inc.
Pro Forma Consolidated Balance Sheet
(Unaudited) As at December 31, 2013

(expressed in thousands of Canadian Dollars)

	Hudbay $		Augusta $		Adjustments $		Note 4	Pro forma consolidated $
			(note 1)
Assets

Current assets
Cash and cash equivalents	631,427		2,412		(13,135	)	(b),(c),(f)	620,704
Trade and other receivables	168,298		8,156		—			176,454
Inventories	52,201		—		—			52,201
Prepaid expenses and other current assets	28,917		16,957		—			45,874
Other financial assets - current	807		146		—			953
Taxes receivable	37,644		—		—			37,644
Assets held for sale	5,864		—		—			5,864

Total current assets	925,158		27,671		(13,135	)		939,694

Receivables	57,376		—		—			57,376
Inventories	7,888		—		—			7,888
Prepaid expenses	574		—		—			574
Other financial assets - long-term	71,182		1,449		(34,126	)	(g),(h)	38,505
Intangible assets - computer software	13,573		1,485		—			15,058
Property, plant and equipment	2,665,075		311,855		375,205		(d)	3,352,135
Goodwill	71,373		—					71,373
Deferred tax assets	31,787		—					31,787

Total assets	3,843,986		342,460		327,944			4,514,390

Liabilities

Current liabilities
Trade and other payables	218,898		4,707		—			223,605
Taxes payable	33		—		—			33
Other liabilities	41,139		3,194		—			44,333
Other financial liabilities - current	16,348		99,464		—			115,812
Deferred revenue	65,616		—		—			65,616

Total current liabilities	342,034		107,365		—			449,399
					—
Other financial liabilities	23,039		3,848		—			26,887
Long-term debt	779,331		6,682		—		(e)	786,013
Deferred revenue	464,135		—		—			464,135
Provisions	146,062		—		—			146,062
Pension obligations	25,931		—		—			25,931
Other employee benefits	142,114		—		—			142,114
Deferred tax liabilities	293,633		3,583		148,582		(d)	445,798

Total liabilities	2,216,279		121,478		148,582			2,486,339

Shareholders’ Equity

Share capital (note 5)	1,021,088		235,031		(74,789	)	(a),(c),(f),(j)	1,181,330
Reserves	49,557		28,734		(28,873	)	(a),(i),(g),(h),(j)	49,418
Retained earnings (deficit)	564,966		(42,783	)	57,714		(a),(b),(h)	579,897

Total equity attributable to Hudbay shareholders	1,635,611		220,982		(45,948	)		1,810,645

Non-controlling interests	(7,904	)	—		225,310		(a)	217,406

Total equity	1,627,707		220,982		179,362			2,028,051

Total liabilities and shareholders’ equity	3,843,986		342,460		327,944			4,514,390

The accompanying notes are an integral part of these pro forma consolidated financial statements.

HudBay Minerals Inc.
Pro Forma Consolidated Statement of Income
(Unaudited) For the year ended December 31, 2013

(expressed in thousands of Canadian Dollars)

	Hudbay $		Augusta $		Adjustments $		Note 4		Pro forma consolidated $
			(note 1)
Revenue	516,801		—		—				516,801

Cost of sales
Mining operating costs	360,085		—		—				360,085
Depreciation and amortization	76,714		—		—				76,714

	436,799		—		—				436,799

Gross profit	80,002		—		—				80,002

Selling and administrative expenses	39,956		6,737		—				46,693

Exploration and evaluation	23,286		1,493		—				24,779

Other operating income	(913	)	—		—				(913	)

Other operating expenses	9,197		—		—				9,197

Asset impairment loss	15,356		—		—				15,356

Results from operating activities	(6,880	)	(8,230	)	—				(15,110	)

Finance income	(3,494	)	(811	)	—				(4,305	)

Finance expenses	8,921		249		—				9,170

Other finance losses	43,697		(826	)	(8,414	)	(h)	(i)	34,457

Net finance expense	49,124		(1,388	)	(8,414	)			39,322

Loss before tax	(56,004	)	(6,842	)	8,414				(54,432	)

Tax expense (recovery)	53,272		(151	)	—				53,121

Loss for the period	(109,276	)	(6,691	)	8,414				(107,553	)

Attributable to
Owners of the Company	(101,359	)	(6,691	)	11,692				(96,358	)
Non-controlling interests	(7,917	)	—		(3,278	)	(a)		(11,195	)

Loss for the period	(109,276	)	(6,691	)	8,414				(107,553	)

Loss per share attributable to owners of the company
Basic and diluted (note 6)	(0.59	)							(0.51	)

Weighted average number of common shares outstanding
Basic and diluted (in thousands) (note 6)	172,048								189,095

The accompanying notes are an integral part of these pro forma consolidated financial statements.

HudBay Minerals Inc.
Notes to Pro Forma Consolidated Financial Statements
(Unaudited) December 31, 2013

(expressed in thousands of Canadian Dollars)

1 Basis of presentation

The unaudited pro forma consolidated balance sheet of Hudbay Minerals Inc. (the “Company” or “Hudbay”) as at December 31, 2013 and the unaudited pro forma consolidated statements of income for the year ended December 31, 2013 have been derived by management based on financial statements prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), for illustrative purposes only, after giving effect to the acquisition of 51% of the share capital of Augusta Resource Corporation (“Augusta”) including common shares the Company owned prior to the Take-over Bid Circular, by the Company (note 3). Adjustments applied are directly attributable to the transaction, factually supportable, and expected to have a continuing impact. Terms not otherwise defined herein have the meanings given thereto in the Company’s offer and take-over bid circular dated February 10, 2014, as amended.

These unaudited pro forma consolidated financial statements have been compiled as follows:

a) an unaudited pro forma consolidated balance sheet giving effect to the transaction described in note 3, as if the transaction occurred on December 31, 2013 combining:

· the audited consolidated balance sheet of the Company as at December 31, 2013; and

· the audited consolidated statements of financial position of Augusta as at December 31, 2013.

b) an unaudited pro forma consolidated income statement for the year ended December 31, 2013, which assumes the transaction occurred as of January 1, 2013, combining:

· the audited consolidated income statement of the Company for the year ended December 31, 2013; and

· the audited consolidated statements of comprehensive loss of Augusta for the year ended December 31, 2013.

The unaudited pro forma consolidated financial statements should be read in conjunction with the historical consolidated financial statements and notes thereto of the Company and Augusta.

· December 31, 2013 balance sheet at the exchange rate of $1.0636; and

· December 31, 2013 income statement at the average rate for the year of $1.0299.

HudBay Minerals Inc.
Notes to Pro Forma Consolidated Financial Statements
(Unaudited) December 31, 2013

(expressed in thousands of Canadian Dollars)

Prior to the transaction described in Note 3, the Company owned 23,058,585 shares of Augusta which were recorded on the audited consolidated year-end balance sheet of the Company at December 31, 2013 at a fair value of $34,127 (cost of $69,058).

2 Summary of significant accounting policies

3 The transaction

Proposed transaction

These pro forma financial statements have been prepared on the basis consistent with the terms of the Take-over Bid Circular, but under the assumption that Hudbay acquires 51% of the issued and outstanding common shares of Augusta, including any Augusta Shares held directly or indirectly by Hudbay and its affiliates prior to the Take-over Bid Circular, and any Augusta Shares that may become issued and outstanding after the date hereof but before the expiry time upon the exercise, exchange or conversion of any convertible securities, together with the associated rights issued under the Shareholder Rights Plan.

HudBay Minerals Inc.
Notes to Pro Forma Consolidated Financial Statements
(Unaudited) December 31, 2013

(expressed in thousands of Canadian Dollars)

		$

Preliminary purchase price
Hudbay share consideration (note 4(a(ii)))		160,242
Fair value of Augusta options settled in cash (note 4(f))		5,345
Fair value of Augusta warrants exchanged for Hudbay warrants (note 4(i))		642
Fair value of Augusta shares previously held by Hudbay (note 4(g))		68,276

Total consideration		234,505

The preliminary purchase price has been allocated to the following net assets based on their estimated fair values as of December 31, 2013:

	$	Pro forma presentation $

Assets acquired and liabilities assumed
Cash and cash equivalents (note 4 (c),(f))		14,622

Accounts receivable	8,141
Due from related parties	15
Trade and other receivables		8,156

Prepaids and other	4,544
Deposits on long-lead equipment	12,413
Prepaid expenses and other current assets		16,957

Short-term investments	146
Other financial assets-current		146

Restricted funds	410
Other assets	1,039
Other financial assets		1,449

Other assets	1,485
Intangible assets-computer software		1,485
Development costs	193,812
Property, plant, and equipment	91,887
Mineral properties	26,156
Property, plant and equipment		311,855

Current liabilities		(107,365	)
Long-term liabilities		(10,530	)
Deferred tax liabilities		(152,165	)
Unallocated purchase price (note 1)		375,205
Total net assets		459,815
Less: Non-controlling interest		(225,310	)

Total net assets acquired		234,505

HudBay Minerals Inc.
Notes to Pro Forma Consolidated Financial Statements
(Unaudited) December 31, 2013

(expressed in thousands of Canadian Dollars)

4 Pro forma assumptions and adjustments

The unaudited pro forma consolidated financial statements reflect the following assumptions and adjustments to give effect to the acquisition of 51% of the issued and outstanding common shares of Augusta as described in note 3 as if the transactions had occurred on January 1, 2013 for statement of income items and December 31, 2013 for balance sheet items. Assumptions relating to the share price of Hudbay or Augusta have used the date of February 7, 2014 which represents the last trading day before February 10, 2014.

a) i) An adjustment to eliminate the historical equity accounts of Augusta.

ii) An adjustment to reflect the issuance of 17,047,068 Hudbay shares in exchange for 54,117,677 common shares of Augusta representing a share exchange ratio of 0.315 Hudbay share to 1 Augusta share. The closing price of Augusta shares on February 7, 2014 was $2.51. Future movements in share prices may impact the share numbers disclosed within.

iii) An adjustment to reflect the 49% non-controlling interest component of the pro forma adjustments.

b) An adjustment to reflect the transaction costs related to the transaction, including $7,000 of change of control payments and $13,000 in professional fees.

An adjustment has been reflected in the pro forma consolidated financial statements related to this event as these additional warrants are in-the-money. The impact on the share consideration of the exercise of these warrants is an increase of cash of $6,996 and the issuance of an additional 1,039,500 Hudbay common shares.

HudBay Minerals Inc.
Notes to Pro Forma Consolidated Financial Statements
(Unaudited) December 31, 2013

(expressed in thousands of Canadian Dollars)

This disclosure is provided for informational purposes only.

g) An adjustment to re-measure the fair value of the Company’s existing investment in Augusta held prior to acquisition of control. This adjustment is recognized under the “Reserves” account in the pro forma consolidated balance sheet. The investment is designated as an available-for-sale investment by Hudbay, carried at fair value and all fair value changes are recognized in other comprehensive income (OCI), except for other than temporary decline in values recognized in the statement of comprehensive loss.

i) An adjustment to reflect the warrants issued by Hudbay in exchange for the warrants issued by Augusta, outstanding as at February 7, 2014. For purposes of pro forma presentation, the warrants issued by Augusta are assumed to be out-of-the money (except for those noted in c) above) and therefore not exercised. Based on the exchange share ratio of Hudbay shares for Augusta shares (note 4(a)) of 0.315 to 1, respectively, 564,386 warrants were issued on February 7, 2014. The warrants have been valued using a Black-Scholes model using the following assumptions: exercise price of $12.22, interest rates of 0.78% to 1.13%, life of warrants of 1.47 to 2.47 years and volatility rates of 40.4% to 40.7%.

j) All unvested restricted shares and restricted share units of Augusta are assumed to vest immediately on February 10, 2014. An adjustment is made for the issuance of the common shares of $2,058.

HudBay Minerals Inc.
Notes to Pro Forma Consolidated Financial Statements
(Unaudited) December 31, 2013

(expressed in thousands of Canadian Dollars)

5 Pro forma share capital

	December 31, 2013
	Number of shares (000s)	$

Hudbay’s common shares outstanding	172,078	1,021,088
Hudbay’s common shares issued under the proposed transaction (note 4(a))	17,047	160,242

Pro forma share capital	189,125	1,181,330

HudBay Minerals Inc.
Notes to Pro Forma Consolidated Financial Statements
(Unaudited) December 31, 2013

(expressed in thousands of Canadian Dollars)

6 Pro forma loss per share

	December 31, 2013 $

Actual weighted average number of Hudbay shares outstanding (thousands)	172,048
Assumed number of Hudbay shares issued to Augusta shareholders (note 4(a)) (thousands)	17,047

Pro forma weighted average number of Hudbay shares outstanding - Basic and diluted (thousands)	189,095

Pro forma loss attributable to owners of the Company	(96,358	)
Pro forma loss per share - basic and diluted	(0.51	)

2. Time for Acceptance

The Offer is open for acceptance until 5:00 p.m. (Toronto Time) on May 5, 2014. Shareholders who have validly deposited and not withdrawn their Augusta Shares need take no further action to accept the Offer. If, at the time immediately prior to 5:00 p.m. (Toronto Time) on May 5, 2014, all of the conditions of the Offer are satisfied or waived by the Offeror, then the Initial Offering Period will end at such time and all Augusta Shares deposited under the Offer and not withdrawn will be taken up by the Offeror. If the Offeror elects to provide for a Subsequent Offering Period, it will do so by extending the Expiry Time beyond the end of the Initial Offering Period.

3. Manner of Acceptance

Augusta Shares may be deposited to the Offer in accordance with the provisions of Section 3 of the Original Offer, “Manner of Acceptance”.

4. Take-Up of and Payment for Deposited Augusta Shares

If all the conditions of the Offer have been satisfied or waived by the Offeror, the Offeror will take up Augusta Shares validly deposited under the Offer and not properly withdrawn no later than 9:00 a.m. on the first business day following the end of the Initial Offering Period. The Offeror will pay for Augusta Shares taken up as soon as practicable thereafter and in any event within three business days thereafter. By so taking up and paying for Augusta Shares validly deposited under the Offer and not properly withdrawn, the Offeror will comply with the requirement under Canadian law to take up such Augusta Shares within ten days following the end of the Initial Offering Period and paying for such shares within three business days thereafter. See Section 6 of the Original Offer, “Take Up of and Payment for Deposited Augusta Shares”.

5. Withdrawal of Deposited Augusta Shares

Augusta Shares deposited under the Offer may be withdrawn by or on behalf of the depositing Augusta Shareholder at any time before the Augusta Shares have been taken up by the Offeror under the Offer (including during any Subsequent Offering Period) and in the other circumstances described in Section 8 of the Original Offer, “Withdrawal of Deposited Augusta Shares”. Except as so indicated or as otherwise required or permitted by applicable Laws, deposits of Augusta Shares are irrevocable.

6. Consequential Amendments to the Original Offer and Circular and Other Documents

The Original Offer and Circular, Letter of Transmittal and Notice of Guaranteed Delivery shall be read together with this Notice of Change and are hereby amended to the extent necessary to reflect the amendments contemplated by, and the information contained in, this Notice of Change.

Except as otherwise set forth in or amended by this Notice of Change, the terms and conditions of the Offer and the information in the Original Offer and Circular, the Letter of Transmittal and the Notice of Guaranteed Delivery continue to be applicable in all respects.

7. Statutory Rights

Securities legislation in the provinces and territories of Canada provides security holders of Augusta with, in addition to any other rights they may have at law, one or more rights of rescission, price revision or to damages, if there is a misrepresentation in a circular or a notice that is required to be delivered to those security holders. However, such rights must be exercised within prescribed time limits. Security holders should refer to the applicable provisions of the securities legislation of their province or territory for particulars of those rights or consult with a lawyer.

8. Directors’ Approval

The contents of this Notice of Change have been approved, and the sending thereof to the Augusta Shareholders has been authorized by the Hudbay Board of Directors.

APPROVAL AND CERTIFICATE OF HUDBAY MINERALS INC.

The foregoing, together with the Original Offer and Circular, contains no untrue statement of a material fact and does not omit to state a material fact that is required to be stated or that is necessary to make a statement not misleading in light of the circumstances in which it was made.

Dated: April 24, 2014.

(Signed) DAVID GAROFALO		(Signed) DAVID S. BRYSON

President and Chief Executive Officer		Senior Vice President and Chief Financial Officer

On behalf of the Board of Directors


(Signed) G. WESLEY VOORHEIS		(Signed) SARAH B. KAVANAGH
Director		Director

The Depositary for the Offer is:

By Registered Mail, Mail, Hand or Courier

Toronto

200 University Avenue
Suite 300
Toronto, Ontario

M5H 4H1

Attention: Corporate Actions

Inquiries

North American Toll Free: 1-866-393-4891

Telephone: 416-361-0930 ext. 205

Facsimile: 416-361-0470

E-Mail: corporateactions@equityfinancialtrust.com

THE INFORMATION AGENT FOR THE OFFER IS:

The Exchange Tower

130 King Street West, Suite 2950, P.O. Box 361

Toronto, Ontario M5X 1E2

North American Toll Free Phone:

1-866-229-8874

E-mail: contactus@kingsdaleshareholder.com

Facsimile: 416-867-2271

Toll Free Facsimile: 1-866-545-5580

Outside North America, Banks and Brokers Call Collect: 416-867-2272