Riskmetrics, Glass Lewis and HudBay Minerals All Agree: SRM Nominee Slate Has No Strategy

Mr. Jones and the SRM Nominees have indicated that they will not conduct a share buyback until they have completed a review of HudBay's strategy. This provides little comfort to HudBay's Board, given its concerns that the SRM Nominees will be unable to act independently of SRM when SRM pressures its hand-picked nominees to distribute HudBay's cash through a major share buyback following such a review. Such a strategy would leave HudBay undercapitalized and unable to pursue its organic growth opportunities.

It is apparent that SRM and their nominees made no effort to develop a strategy for HudBay in the two months following the announcement of the SRM Nominees. HudBay believes this is because SRM does not intend to grow HudBay, but rather intends to engage in a major share buyback that would weaken HudBay financially and jeopardize HudBay's organic growth opportunities. Facing criticism of their lack of strategy from HudBay shareholders and independent observers, SRM and Mr. Jones have hastily concocted a strategy that is not well considered and hides SRM's true intent, which HudBay believes is to distribute the company's cash through a share buyback.

The Riskmetrics and Glass Lewis reports

In its report, Riskmetrics noted that Mr. Voorheis is a paid consultant to SRM, and has been proposed to be HudBay's chairman if the SRM Nominees are installed. SRM's proxy circular does not state how much Mr. Voorheis is being paid by SRM. According to Riskmetrics:

- "... we are not comfortable with Voorheis being appointed Chairman. A consultant who is paid by the dissident should not be automatically installed in such an influential leadership role. We would expect a board of directors, after due consideration, to independently appoint a chairman in the best interests of the company and its shareholders." (i)

SRM's decision to appoint their paid consultant as HudBay's chairman is entirely consistent with a strategy of obtaining control of HudBay. HudBay is concerned that Riskmetrics has placed undue faith in the ability of the SRM Nominees and Mr. Jones to withstand the pressure that SRM, a well-known activist investor, will apply to them to pursue strategies that benefit SRM but could be damaging to the interests of HudBay and its other shareholders.

HudBay urges its shareholders to carefully consider the issues raised in both the Riskmetrics report as well as Glass Lewis' report.

In recommending that HudBay shareholders vote AGAINST SRM's resolution, Glass Lewis states that:

- "We are concerned that the replacement of the entire board is a drastic step that could disrupt the board and/or management's operations, depriving the Company of much-needed leadership amid a major financial downturn." (i)

- "Further, we are concerned that the Dissident has failed to outline a substantial strategic plan for improvement at the Company, other than appointing Dissident nominee (Peter) Jones as CEO. Instead, the Dissident reports that such a plan could only be finalized after the Dissident nominees were elected to the board and provided with access to requisite information regarding the Company. As such, we do not believe the Dissident has provided any reason to believe that its own strategy would yield better results for the company's performance than management's current strategy."