-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
Originator-Key-Asymmetric:
 MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen
 TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
 OyYj0k08deQEHgMFjgpx+xRsNBxZG3PDBzRwjq0eqsWFrAEDFcSC6RJNma28uwA5
 CYumoTd5bzVSXfvPWRZqIw==

<SEC-DOCUMENT>0001047469-06-006968.txt : 20060512
<SEC-HEADER>0001047469-06-006968.hdr.sgml : 20060512
<ACCEPTANCE-DATETIME>20060512092210
ACCESSION NUMBER:		0001047469-06-006968
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		4
CONFORMED PERIOD OF REPORT:	20060511
FILED AS OF DATE:		20060512
DATE AS OF CHANGE:		20060512

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			HudBay Minerals Inc.
		CENTRAL INDEX KEY:			0001322422
		STANDARD INDUSTRIAL CLASSIFICATION:	METAL MINING [1000]
		IRS NUMBER:				000000000
		STATE OF INCORPORATION:			A6
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		6-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	333-124186-02
		FILM NUMBER:		06832349

	BUSINESS ADDRESS:	
		STREET 1:		201 PORTAGE AVENUE, SUITE 1906
		CITY:			WINNEPEG
		STATE:			A2
		ZIP:			R3B 3L3
		BUSINESS PHONE:		(204) 949-4261

	MAIL ADDRESS:	
		STREET 1:		201 PORTAGE AVENUE, SUITE 1906
		CITY:			WINNEPEG
		STATE:			A2
		ZIP:			R3B 3L3
</SEC-HEADER>
<DOCUMENT>
<TYPE>6-K
<SEQUENCE>1
<FILENAME>a2170399z6-k.txt
<DESCRIPTION>FORM 6-K
<TEXT>
<PAGE>


                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549


                                    FORM 6-K


                        Report of Foreign Private Issuer
                      Pursuant to Rule 13a-16 or 15d-16 of
                       the Securities Exchange Act of 1934


For the month of: May 2006                Commission File Number: 333-124186-02


                              HUDBAY MINERALS INC.
                              (Name of Registrant)

                         201 PORTAGE AVENUE, SUITE 1906
                               WINNIPEG, MANITOBA
                                 CANADA R3B 3L3
                    (Address of Principal Executive Offices)


Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F:

          Form 20-F                               Form 40-F
                    -----                                   -----

Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(1): ____

Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(7): ____

Indicate by check mark whether by furnishing the information contained in this
Form, the registrant is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

                 Yes                                     No   X
                    -----                                   -----

If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b):  N/A
<PAGE>


                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                      HUDBAY MINERALS INC.


Date: May 11, 2006                    By: /s/ Jeffrey A. Swinoga
                                          ------------------------------
                                          Name:  Jeffrey A. Swinoga
                                          Title: Vice President and
                                                 Chief Financial Officer
<PAGE>


                                  EXHIBIT INDEX


EXHIBIT         DESCRIPTION OF EXHIBIT
- -------         ----------------------
 99.1           HudBay Minerals Inc. Interim Consolidated Financial Statements
                for the Period Ended March 31, 2006

 99.2           HudBay Minerals Inc. Interim Management Discussion and Analysis
                of Results of Operations and Financial Condition - Quarter
                Ended March 31, 2006

 99.3           HudBay Announces Strong First Quarter 2006 Results

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>a2170399zex-99_1.txt
<DESCRIPTION>EXHIBIT 99.1
<TEXT>
<PAGE>
                                                                    Exhibit 99.1




                              HUDBAY MINERALS INC.

                        Consolidated Financial Statements
                       FOR THE PERIOD ENDED MARCH 31, 2006
                         (expressed in Canadian Dollars)


<PAGE>


HUDBAY MINERALS INC.

Consolidated Statement of Earnings
(In thousands of Canadian dollars, except share and per share amounts)

<TABLE>
<CAPTION>
                                                                                       Three months ended
                                                                                            March 31
- -------------------------------------------------------------------------------------------------------------------
                                                                                 2006                          2005
                                                                          (UNAUDITED)
- -------------------------------------------------------------------------------------------------------------------
<S>                                                                      <C>                       <C>

Revenue                                                                  $    207,963              $        151,525

Expenses:
      Operating                                                               121,887                       117,713
      General and administrative                                                5,928                         3,641
      Depreciation and amortization                                            15,542                        12,724
      Accretion of asset retirement obligation                                    660                           652
      Exploration                                                               3,134                           569
      Foreign exchange (gain)                                                  (1,268)                         (250)
- --------------------------------------------------------------------------------------------------------------------
                                                                              145,883                       135,049
- -------------------------------------------------------------------------------------------------------------------

Operating earnings                                                             62,080                        16,476

Interest expense                                                               (4,754)                       (5,653)
Foreign exchange (loss) on long term debt                                        (824)                       (1,330)
Gain on derivative instruments (note 10)                                        4,331                         2,364
Interest and other income                                                       1,172                           470
Amortization of deferred financing fees                                          (362)                         (341)
- --------------------------------------------------------------------------------------------------------------------
Earnings before income tax                                                     61,643                        11,986

Tax recovery (expense) (note 8)                                                14,343                        (2,805)
- --------------------------------------------------------------------------------------------------------------------

Earnings for the period                                                  $     75,986              $          9,181
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------

Earnings per share:
      Basic                                                              $       0.89              $           0.12
      Diluted                                                            $       0.70              $           0.12

Weighted average number of common shares outstanding
      Basic                                                                85,392,988                    78,547,993
      Diluted                                                             108,179,593                    79,202,545
</TABLE>

See accompanying notes to consolidated financial statements.


                                                                               2
<PAGE>


HUDBAY MINERALS INC.

Consolidated Statement of Retained Earnings
(In thousands of Canadian dollars)

<TABLE>
<CAPTION>
                                                                                       Three months ended
                                                                                            March 31
- -------------------------------------------------------------------------------------------------------------------
                                                                                 2006                          2005
                                                                          (UNAUDITED)
- -------------------------------------------------------------------------------------------------------------------
<S>                                                                      <C>                       <C>

Retained earnings (deficit), beginning of period                         $     78,732              $         (6,486)

Earnings for the period                                                        75,986                         9,181
- -------------------------------------------------------------------------------------------------------------------

Retained earnings, end of period                                         $    154,718              $          2,695
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
</TABLE>

See accompanying notes to consolidated financial statements.


                                                                               3
<PAGE>


HUDBAY MINERALS INC.

Consolidated Balance Sheet
(in thousands of Canadian dollars)

<TABLE>
<CAPTION>
                                                                       MARCH 31, 2006             December 31, 2005
                                                                          (UNAUDITED)
- -------------------------------------------------------------------------------------------------------------------
<S>                                                                      <C>

ASSETS:

Current assets:
      Cash and cash equivalents                                          $    127,364              $        141,660
      Accounts receivable                                                      87,286                        44,698
      Inventories                                                             132,329                       116,596
      Prepaid expenses                                                          3,920                         3,625
      Current portion of fair value of derivatives                              8,623                         4,483
      Future income taxes                                                      38,500                        26,200
- -------------------------------------------------------------------------------------------------------------------
                                                                              398,022                       337,262

Property, plant and equipment                                                 405,974                       378,207
Other assets (note 4)                                                          11,781                        13,284
- -------------------------------------------------------------------------------------------------------------------
                                                                         $    815,777              $        728,753
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------

LIABILITIES AND SHAREHOLDERS' EQUITY:

Current liabilities:
      Accounts payable and accrued liabilities                           $    102,338              $         91,930
      Interest payable on long-term debt                                        3,630                         8,004
      Current portion of other liabilities (note 5)                            29,389                        28,211
- -------------------------------------------------------------------------------------------------------------------
                                                                              135,357                       128,145
- -------------------------------------------------------------------------------------------------------------------

Long-term debt (note 6)                                                       191,326                       191,493
Pension obligations                                                            44,853                        46,743
Other employee future benefits                                                 62,357                        61,250
Asset retirement obligations                                                   29,919                        29,219
Obligations under capital leases                                                8,022                         9,011
Future income tax liabilities                                                   2,688                         1,666
- -------------------------------------------------------------------------------------------------------------------
                                                                         $    474,522              $        467,527
- -------------------------------------------------------------------------------------------------------------------

Shareholders' equity:
      Share capital:
           Common shares                                                      147,588                       143,611
           Warrants                                                            27,203                        28,931
      Contributed surplus                                                      11,804                        10,015
      Cumulative translation adjustment                                           (58)                          (63)
      Retained earnings                                                       154,718                        78,732
- -------------------------------------------------------------------------------------------------------------------
                                                                              341,255                       261,226
- -------------------------------------------------------------------------------------------------------------------
                                                                         $    815,777              $        728,753
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
</TABLE>

See accompanying notes to consolidated financial statements.


                                                                               4
<PAGE>


HUDBAY MINERALS INC.

Consolidated Statement of Cash Flows
(in thousands of Canadian dollars)

<TABLE>
<CAPTION>
                                                                                       Three months ended
                                                                                            March 31
- -------------------------------------------------------------------------------------------------------------------
                                                                                 2006                          2005
                                                                          (UNAUDITED)
- -------------------------------------------------------------------------------------------------------------------
<S>                                                                      <C>                       <C>

Cash provided by (used in):

Operating activities:
      Earnings for the period                                            $     75,986              $          9,181
      Items not affecting cash:
           Depreciation and amortization                                       15,542                        12,724
           Tax expense (recovery)                                             (14,939)                        2,002
           Unrealized foreign exchange gain                                       518                         1,086
           Amortization of deferred financing costs                               362                           341
           Accretion expense on asset retirement obligation                       660                           652
           Stock-based compensation                                             2,251                             -
           Unrealized portion of change in fair value of derivative            (3,159)                       (1,363)
           Other                                                                  752                            60
      Change in non-cash working capital (note 11)                            (51,847)                        3,203
- -------------------------------------------------------------------------------------------------------------------
                                                                               26,126                        27,886
- -------------------------------------------------------------------------------------------------------------------

Financing activities:
      Repayment of senior secured notes                                        (1,168)                            -
      Issuance of common shares, net of costs                                       -                         8,669
      Proceeds on exercise of stock options                                     1,180                             -
      Proceeds on exercise of warrants                                          4,269                             -
      Repayments of obligations under capital leases                             (936)                         (919)
      Deferred financing cost                                                       -                          (133)
      --------------------------------------------------------------------------------------------------------------
                                                                                3,345                         7,617
      -------------------------------------------------------------------------------------------------------------

Investing activities:
      Additions to property, plant and equipment                              (27,003)                      (15,847)
      Acquisition of White Pine Copper Refinery, Inc.,
         net of cash acquired (note 3)                                        (17,041)                            -
      Decrease in restricted cash                                                   -                        13,000
      Additions to environmental deposits                                          15                             -
      -------------------------------------------------------------------------------------------------------------
                                                                              (44,029)                       (2,847)
      --------------------------------------------------------------------------------------------------------------

Foreign exchange gain on cash held in foreign currency                            262                           244
- -------------------------------------------------------------------------------------------------------------------

Change in cash and cash equivalents                                           (14,296)                       32,900
Cash and cash equivalents, beginning of period                                141,660                        64,553
- -------------------------------------------------------------------------------------------------------------------

Cash and cash equivalents, end of period                                 $    127,364              $         97,453
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
</TABLE>

See accompanying notes to consolidated financial statements


                                                                               5
<PAGE>



HUDBAY MINERALS INC.

Notes to the Interim Consolidated Financial Statements
(Amounts in thousands of Canadian dollars, except share and per share data)

For the three months ended March 31, 2006
- --------------------------------------------------------------------------------

1.    NATURE OF BUSINESS

      The Company is an integrated mining and metals processing company that
      operates mines and concentrators in northern Manitoba and Saskatchewan,
      Canada. It operates a copper and zinc metal production complex in Flin
      Flon, Manitoba, a zinc oxide production facility in Brampton, Ontario, a
      mine in New York State, and on January 1, 2006 acquired a copper refinery
      operation in Michigan State.

2.    BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION

      These consolidated financial statements include the financial statements
      of the Company, all of its subsidiaries and the proportionate share of the
      assets and liabilities of any joint ventures where the Company shares
      joint ownership. Inter-company accounts and transactions have been
      eliminated on consolidation.

      The unaudited interim consolidated financial statements do not include all
      of the information and disclosures required by Canadian GAAP for audited
      annual financial statements. In the opinion of management, all adjustments
      considered necessary for fair presentation have been included in the
      unaudited interim consolidated financial statements. The unaudited interim
      consolidated financial statements should be read in conjunction with the
      most recent audited annual consolidated financial statements of the
      Company, including the notes thereto.

3.    ACQUISITION OF WHITE PINE COPPER REFINERY INC.

      On January 1, 2006, the Company, through Hudson Bay Mining and Smelting
      Co., Limited (HBMS), acquired all of the outstanding common shares of
      White Pine Copper Refinery Inc. (WPCR) for total cash purchase
      consideration of $17,913. The acquisition is accounted for by the purchase
      method and the result of operations and cash flows has been included
      within these consolidated financial statements from January 1, 2006.

      The following table summarizes the preliminary allocation of the purchase
      consideration based on management's current estimate of the fair value of
      the assets and liabilities acquired on the date of acquisition.

<TABLE>
<CAPTION>
      -------------------------------------------------------------------------------------------------------------
<S>                                                                                                  <C>
      Current assets (including cash of $872)                                                        $        2,817
      Property, plant and equipment                                                                          16,306
      Current liabilities                                                                                    (1,210)
      -------------------------------------------------------------------------------------------------------------
                                                                                                     $       17,913
      -------------------------------------------------------------------------------------------------------------
      -------------------------------------------------------------------------------------------------------------
</TABLE>


                                                                               6
<PAGE>


      Management expects to obtain additional information that may require
      adjustments to amounts shown above for property, plant and equipment and
      asset retirement obligations, and these potential adjustments may be
      material.

4.    OTHER ASSETS

<TABLE>
<CAPTION>
                                                                       MARCH 31, 2006             December 31, 2005
      -------------------------------------------------------------------------------------------------------------
<S>                                                                    <C>                        <C>
      Deferred financing costs                                           $      7,248                  $      7,610
      Deferred option premiums                                                      -                         3,647
      Environmental deposits                                                    1,743                         1,758
      Fair value of derivatives                                                 2,790                           269
      -------------------------------------------------------------------------------------------------------------
                                                                         $     11,781                  $     13,284
      -------------------------------------------------------------------------------------------------------------
      -------------------------------------------------------------------------------------------------------------
</TABLE>


5.    CURRENT PORTION OF OTHER LIABILITIES

<TABLE>
<CAPTION>
                                                                       MARCH 31, 2006             December 31, 2005
      -------------------------------------------------------------------------------------------------------------
<S>                                                                    <C>                        <C>
      Current portion of long-term debt                                  $      4,000                  $      4,000
      Current portion of pension obligation                                    19,479                        18,354
      Current portion of other employee future benefits                         2,032                         2,032
      Current portion of obligations under capital leases                       3,878                         3,825
      -------------------------------------------------------------------------------------------------------------
                                                                         $     29,389                  $     28,211
      -------------------------------------------------------------------------------------------------------------
      -------------------------------------------------------------------------------------------------------------
</TABLE>


6.    LONG-TERM DEBT

<TABLE>
<CAPTION>
                                                                       MARCH 31, 2006             December 31, 2005
      -------------------------------------------------------------------------------------------------------------
<S>                                                                    <C>                        <C>
      Senior Secured Notes                                               $    181,040                  $    181,428
      Province of Manitoba                                                     14,286                        14,065
      -------------------------------------------------------------------------------------------------------------
                                                                         $    195,326                  $    195,493

      Less current portion of long term debt                                    4,000                         4,000
      -------------------------------------------------------------------------------------------------------------
                                                                         $    191,326                  $    191,493
      -------------------------------------------------------------------------------------------------------------
      -------------------------------------------------------------------------------------------------------------
</TABLE>

      On January 31, 2006, HBMS concluded a $25 million revolving credit
      facility that matures on January 31, 2007. Subject to the approval of the
      lenders, the initial maturity date may be extended for an additional 364
      days.

      The borrowings under this facility may be made in either Canadian dollars
      in the form of (a) Prime Rate Advances or (b) Bankers' Acceptances or in
      United States dollars in the form of (i) United States Base Rate Advances
      or (ii) London Interbank Offered Rate (LIBOR) loans. Borrowings under
      these facilities


                                                                               7

<PAGE>

      bear interest, when drawn, at a rate that varies based on the type of
      borrowing. Canadian or US dollar denominated letters of credit or
      guarantees can also be used against this facility. As of March 31, 2006
      there were no amounts drawn under the new facility.

      This credit facility provides that during the term of this agreement, HBMS
      will be required to maintain a Total Leverage Ratio not exceeding 3.25 to
      1 and an Interest Coverage Ratio of not less than 3.5. As of March 31,
      2006, the Company is in compliance with these covenants.

7.    PENSION AND OTHER FUTURE EMPLOYEE BENEFIT EXPENSE

<TABLE>
<CAPTION>
                                                                                         Three months ended
                                                                                              March 31
      -------------------------------------------------------------------------------------------------------------
                                                                                 2006                          2005
      -------------------------------------------------------------------------------------------------------------
<S>                                                                      <C>                           <C>
      Pension expense                                                    $      2,858                  $      2,325
      Other future employee benefits expense                                    1,617                         1,150
      -------------------------------------------------------------------------------------------------------------
                                                                         $      4,475                  $      3,475
      -------------------------------------------------------------------------------------------------------------
      -------------------------------------------------------------------------------------------------------------
</TABLE>


8.    INCOME TAXES

<TABLE>
<CAPTION>
                                                                                         Three months ended
                                                                                              March 31
      -------------------------------------------------------------------------------------------------------------
                                                                                 2006                          2005
      -------------------------------------------------------------------------------------------------------------
<S>                                                                      <C>                           <C>
      Income tax provision applicable to:
      Current taxes                                                      $       (596)                 $       (429)
      Future taxes                                                             14,939                        (2,376)
      --------------------------------------------------------------------------------------------------------------
      Income tax recovery                                                $     14,343                  $     (2,805)
      --------------------------------------------------------------------------------------------------------------
      -------------------------------------------------------------------------------------------------------------
</TABLE>


      The net future tax asset reflects a valuation allowance that represents
      management's estimate of the allowance necessary to reflect the future
      income tax assets at an amount that the Company considers is more likely
      than not to be realized. Since HBMS had many years of ever increasing
      timing differences, with 2005 the first year of a reduction, the tax asset
      has been based on only one future year of earnings. This is considered
      appropriate due to uncertainties of future metal prices, exchange rates
      and the magnitude of prior losses, but will continue to be reviewed as
      circumstances change.

      Future taxes include changes in the tax asset of $12,300 (2005 -
      ($2,002)), the flow through share income tax component of $3,662 (2005 -
      nil), offset by future income tax expenses of $1,023 (2005- $374)
      recognized through the joint venture interest in Considar Metal Marketing
      Inc. (CMM).


                                                                               8
<PAGE>


9.    SHARE CAPITAL

      (a)  Common shares:

           Authorized:
           Unlimited common shares

           Issued:
<TABLE>
<CAPTION>
                                                                                    Three months ended
                                                                                      March 31, 2006
           --------------------------------------------------------------------------------------------------------
                                                                             Common Shares                   Amount
           --------------------------------------------------------------------------------------------------------
<S>                                                                          <C>                       <C>
           Balance, beginning of period                                         84,807,452             $    143,611
           Exercise of warrants                                                    946,932                    5,998
           Exercise of options                                                     434,174                    1,641
           Tax impact of flow-through shares                                             -                   (3,662)
           --------------------------------------------------------------------------------------------------------
           Balance, end of period                                               86,188,558             $    147,588
           --------------------------------------------------------------------------------------------------------
           --------------------------------------------------------------------------------------------------------
</TABLE>

           During 2005, the Company completed two private placements for a total
           of 2,999,452 shares with proceeds from the financing for Canadian
           exploration. In February 2006, the Company renounced $10 million of
           the flow through financing to investors with an effective date of
           December 31, 2005. In accordance with EIC-146, "Flow-through shares",
           the Company reduced its share capital by $3,662 using a tax rate of
           approximately 37% applied to the temporary taxable differences
           created by the renunciation.

      (b)  Warrants:

<TABLE>
<CAPTION>
           ---------------------------------------------------------------------------------------------------------
                                                                                    Number                   Amount
           ---------------------------------------------------------------------------------------------------------
<S>                                                                          <C>                       <C>
           Warrants outstanding, beginning of period                         1,076,082,458             $     28,931
           Underlying warrants issued                                              256,649                        -
           Exercised                                                           (28,408,251)                  (1,728)
           ---------------------------------------------------------------------------------------------------------
           Warrants outstanding, end of period                               1,047,930,856             $     27,203
           --------------------------------------------------------------------------------------------------------
           --------------------------------------------------------------------------------------------------------
</TABLE>

           Warrants outstanding to acquire common shares (30 warrants required
           to acquire one common share) of the Company at March 31, 2006 are as
           follows:


                                                                               9
<PAGE>

<TABLE>
<CAPTION>
           --------------------------------------------------------------------------------------------------------
                     Warrants
                  Outstanding                             Exercise Price                                Expiry Date
           --------------------------------------------------------------------------------------------------------
<S>                                                       <C>                                   <C>
                    2,200,438                                  0.06                              September 28, 2006
                        1,950                                  0.05                              September 28, 2006
                    2,053,351                                  0.12                               November 30, 2006
                           35                                  0.09                               November 30, 2006
                   15,922,347                                  0.086                              December 21, 2006
                1,027,752,735                                  0.105                              December 21, 2009
           --------------------------------------------------------------------------------------------------------
                1,047,930,856
           --------------------------------------------------------------------------------------------------------
           --------------------------------------------------------------------------------------------------------
</TABLE>

      (c)  Stock option plan:

           Pursuant to the Company's stock option plan (the "Plan") approved in
           June 2005, during the quarter the Company granted additional options
           to directors and employees of the company for the 2006 entitlement.

           The fair value of the options granted during 2006 has been estimated
           at the date of grant using a Black-Scholes option pricing model with
           the following assumptions: risk-free interest rate of 4%; dividend
           yield of 0%; volatility factor of the expected market price of the
           Company's common stock of 42%; and a weighted average expected life
           of these options of 4 years.

<TABLE>
<CAPTION>
           --------------------------------------------------------------------------------------------------------
                                                                                                           Weighted
                                                                                                            average
                                                                                     Number of             exercise
                                                                                        shares                price
           --------------------------------------------------------------------------------------------------------
<S>                                                                                  <C>                   <C>
           Balance, beginning of period                                              3,498,828                $2.66
           Granted                                                                   1,611,713                 9.65
           Exercised                                                                  (434,174)                2.72
           --------------------------------------------------------------------------------------------------------
           Outstanding, end of period                                                4,676,367                $5.06
           --------------------------------------------------------------------------------------------------------
           --------------------------------------------------------------------------------------------------------
</TABLE>


                                                                              10
<PAGE>

           The following table summarizes the options outstanding at March 31,
           2006:

<TABLE>
<CAPTION>
           --------------------------------------------------------------------------------------------------------
                                                        Weighted average                           Weighted average
                     Number of                                 remaining         Number of                remaining
                       options           Exercise       contractual life           options         contractual life
                   Outstanding              Price                (Years)       Exercisable                  (Years)
           --------------------------------------------------------------------------------------------------------
<S>                 <C>                  <C>            <C>                    <C>                 <C>
                     2,869,187              $2.59                    9.2           555,731                      9.2
                        25,000               3.00                    2.7            25,000                      2.7
                       153,800               3.35                    9.2             3,800                      9.2
                         5,000               4.50                    0.2             5,000                      0.2
                        11,667               7.50                    1.3            11,667                      1.3
                        40,000               7.64                   10.0            13,332                     10.0
                     1,571,713               9.70                   10.0           523,852                     10.0
           --------------------------------------------------------------------------------------------------------
                     4,676,367              $5.06                                1,138,382
           --------------------------------------------------------------------------------------------------------
           --------------------------------------------------------------------------------------------------------
</TABLE>


10.   RISK MANAGEMENT USING FINANCIAL INSTRUMENTS

      The Company from time to time employs derivative financial instruments,
      including forward and option contracts, to manage risk originating from
      actual exposures to commodity price risk, foreign exchange risk and
      interest rate risk.

      (a)  Foreign currency risk management:

           The Company uses forward exchange or currency collar contracts to
           limit the effects of movements in exchange rates on foreign
           currency-denominated assets and liabilities and future anticipated
           transactions.

           The Company holds put options securing the right, but not the
           obligation to sell US $4.375 million per quarter at $1.20482,
           continuing to January 2009. Prior to January 1, 2006 this option met
           hedge accounting and was accounted for as such. This option was
           matched to future forecasted cash receipts, but due to changes in
           payment terms for sales contracts the critical terms no longer
           matched. As such, this option became ineligible for hedge
           accounting. The unrealized gain on the option was deferred at
           January 1, 2006 $438 to be taken into income over the remaining term
           of the option ($36 per quarter). The changes in fair value after
           January 1, 2006 are taken into income ($153 for the first quarter
           2006). The Company intends to meet hedge accounting for this option
           in the future to limit the fluctuations in the fair values.


                                                                              11
<PAGE>

      (b)  Commodity price risk management:

           From time to time, the Company maintains price protection programs
           and conducts commodity price risk management through the use of
           forward sales contracts, spot deferred contracts, option contracts
           and commodity collar contracts.

           Through its joint venture interest in CMM, the Company manages the
           risk associated with forward physical sales where it receives a fixed
           price regarding zinc and zinc oxide and, accordingly, enters into
           forward zinc purchase contracts to convert the fixed price to a
           floating price arrangement. At March 31, 2006, the joint venture had
           outstanding forward contracts to purchase 10,733 tonnes of zinc at
           prices ranging from U.S. $834 to U.S. $2,689 per tonne with
           settlement dates in the next three years. The fair value approximates
           its carrying value.


11.   CHANGE IN NON-CASH WORKING CAPITAL

<TABLE>
<CAPTION>
                                                                                         Three months ended
                                                                                              March 31
      -------------------------------------------------------------------------------------------------------------
                                                                                 2006                          2005
      -------------------------------------------------------------------------------------------------------------
<S>                                                                      <C>                           <C>
      Accounts receivable                                                $    (42,082)                 $      3,311
      Inventories                                                             (14,482)                       10,293
      Accounts payable and accrued liabilities                                  9,198                       (10,695)
      Prepaid expenses                                                           (107)                       (4,849)
      Interest payable                                                         (4,374)                        5,143
      -------------------------------------------------------------------------------------------------------------
                                                                         $    (51,847)                 $      3,203
      -------------------------------------------------------------------------------------------------------------
      -------------------------------------------------------------------------------------------------------------
</TABLE>


12.      SUPPLEMENTARY CASH FLOW INFORMATION

<TABLE>
<CAPTION>
                                                                                       Three months ended
                                                                                            March 31
- -------------------------------------------------------------------------------------------------------------------
                                                                                 2006                          2005
- -------------------------------------------------------------------------------------------------------------------
<S>                                                                      <C>                       <C>
      Interest paid                                                      $      8,906              $            275
      Additions to obligations under capital leases                                 -                         1,451
</TABLE>


                                                                              12
<PAGE>

13.   SEGMENTED INFORMATION

      The Company is an integrated base metals producer and operates in a single
      reportable operating segment.

      The Company's revenue by significant product types:

<TABLE>
<CAPTION>
                                                                                         Three months ended
                                                                                              March 31
      -------------------------------------------------------------------------------------------------------------
                                                                                 2006                          2005
      -------------------------------------------------------------------------------------------------------------
<S>                                                                      <C>                           <C>
      REVENUES:

      Copper                                                             $    112,483                  $     82,076
      Zinc                                                                     60,120                        32,852
      Zinc oxide                                                               26,040                        17,650
      Gold, silver and other                                                    9,320                        18,947
      -------------------------------------------------------------------------------------------------------------
                                                                         $    207,963                  $    151,525
      -------------------------------------------------------------------------------------------------------------
      -------------------------------------------------------------------------------------------------------------
</TABLE>


14.   SUBSEQUENT EVENTS

      (a) Repurchase of debt

         On April 4, 2006, the Company repurchased, through the open market an
         additional US$30 million of its 9 5/8% senior secured notes due
         January 5, 2012.

      (b) ScoZinc sale agreement

         On April 7, 2006, the Company, through its wholly-owned subsidiary
         Pan American Resources Corp., executed the definitive purchase and
         sale agreement with Acadian Gold Corporation to sell 100% of its
         outstanding shares of ScoZinc Limited for C$7.5 million. The sale of
         ScoZinc is scheduled to close on July 6, 2006, or such earlier date
         as the parties may agree. The completion of the sale is subject to
         usual closing conditions, including obtaining all necessary
         regulatory and stock exchange approvals, and the purchaser completing
         satisfactory financing arrangements.


                                                                              13
<PAGE>

      (c) Early warrant exercise

         On April 21, 2006, the Company filed a preliminary short form
         prospectus in connection with a proposal to issue new common shares
         as an incentive for holders of its publicly-traded warrants to
         exercise such warrants during a 30-day early exercise period expected
         to commence on or about June 5, 2006. If all warrants are exercised
         during the early exercise period, the Company will:

         o    receive gross proceeds of approximately $107.9 million on or
              before July 6, 2006;

         o    issue approximately 34.2 million common shares; and

         o    issue approximately 2.1 million additional common shares as an
              incentive for the exercise of the warrants, representing
              approximately 1.6% of the fully diluted outstanding shares.

      (d) Flow-through common shares

         On April 25, 2006, the company issued 1.46 million flow-through
         common shares at a price of $13.75 per share for aggregate gross
         proceeds of approximately $20 million. Proceeds from the private
         placement will be used for exploration and development on the
         Company's Canadian properties.

15.   HUDSON BAY MINING AND SMELTING CO., LIMITED

      A summary of the selective financial information for Hudson Bay Mining and
      Smelting Co., Limited is as follows:

<TABLE>
<CAPTION>
                                                                                         Three months ended
                                                                                              March 31
      -------------------------------------------------------------------------------------------------------------
                                                                                 2006                          2005
      -------------------------------------------------------------------------------------------------------------
<S>                                                                      <C>                           <C>
      Total revenues                                                     $    207,934                  $    151,525

      Net earnings                                                             77,693                        12,813

      Long-term financial debt (excluding current portion)                    191,326                       236,993

      Total assets                                                            783,915                       629,071
</TABLE>


                                                                              14
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2
<SEQUENCE>3
<FILENAME>a2170399zex-99_2.txt
<DESCRIPTION>EXHIBIT 99.2
<TEXT>
<PAGE>
                                                                    Exhibit 99.2




                              HUDBAY MINERALS INC.

                      Management Discussion and Analysis of
                  Results of Operations and Financial Condition

                          Quarter Ended March 31, 2006

MAY 11, 2006


<PAGE>


                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION

UNLESS THE CONTEXT OTHERWISE SUGGESTS, REFERENCES TO "WE", "US", "OUR" AND
SIMILAR TERMS, AS WELL AS REFERENCES TO "HUDBAY" OR THE "COMPANY", REFER TO
HUDBAY MINERALS INC. AND ITS SUBSIDIARIES.

This Management's Discussion and Analysis ("MD&A") dated May 11, 2006 should be
read in conjunction with the Company's consolidated financial statements for the
quarter ended March 31, 2006, and related notes which have been prepared in
accordance with Canadian Generally Accepted Accounting Principles ("GAAP").
Additional information regarding the Company, including its Annual Report for
2005, is available on SEDAR at www.sedar.com.

All figures are in Canadian dollars unless otherwise noted.


OUR BUSINESS

HudBay is an integrated mining and metals processing company that operates
mines, concentrators and a copper and zinc production complex in the Flin Flon
area of northern Manitoba, a copper refinery in Michigan, and a zinc oxide
production facility in Brampton, Ontario and is re-opening the Balmat zinc mine
in New York State.


TABLE OF CONTENTS

                                                                          Page
                                                                          ----

Key Financial and Production Results                                        3
Health, Safety, Environment and Product Quality                             4
Operations Overview                                                         4
Financial Review                                                           10
Cash Cost per Pound of Zinc Sold                                           12
Operating Costs                                                            13
Cash Flows, Liquidity and Capital Resources                                14
Financial Condition                                                        15
Risk Management                                                            16
Outlook                                                                    16
Forward Looking Statements                                                 17
Appendix - Production Results                                              19


                                                                               2
<PAGE>


KEY FINANCIAL AND PRODUCTION RESULTS

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
                                                         QUARTER        Quarter
                                                           ENDED          Ended
                                                         MAR 31,        Mar 31,
                                                            2006           2005          Change
- ------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
($000s except per share amounts and cash cost of zinc)

<S>                                                      <C>            <C>                 <C>
Revenue                                                  207,963        151,525           + 37%
Earnings                                                  75,986          9,181          + 728%
Operating cash flow 1                                     77,973         24,683          + 216%
Earnings per common share: 2
    Basic                                                  $0.89          $0.12          + 642%
    Diluted                                                $0.70          $0.12          + 483%
Operating cash flow per common share: 1
    Basic                                                  $0.91          $0.31          + 194%
    Diluted                                                $0.72          $0.31          + 132%
Cash cost per pound of zinc sold 3                         $0.05          $0.21           - 76%
- ------------------------------------------------------------------------------------------------
OPERATING HIGHLIGHTS

Production
    Copper                        TONNES                  23,686         20,697           + 14%
    Zinc                          TONNES                  29,906         29,204            + 2%
    Gold                          TROY OZ.                26,511         25,774            + 3%
    Silver                        TROY OZ.               390,230        338,294           + 15%
Metal Sold 4
    Copper                        TONNES                  18,932         20,382            - 7%
    Zinc, incl sales to Zochem    TONNES                  30,172         27,097           + 11%
    Gold                          TROY OZ.                14,846         25,397           - 42%
    Silver                        TROY OZ.               232,456        331,644           - 30%
- ------------------------------------------------------------------------------------------------
FINANCIAL CONDITION                                      QUARTER           Year
($000s)                                                    ENDED          Ended
                                                         MAR 31,        Dec 31,
                                                            2006           2005          Change
                                                 -----------------------------------------------
Cash and cash equivalents                                127,364        141,660           - 10%
Working capital                                          262,665        209,117           + 26%
Net debt 5                                                79,862         66,669           + 20%
Total assets                                             815,777        728,753           + 12%
Shareholders' equity                                     341,255        261,226           + 31%
- ------------------------------------------------------------------------------------------------
</TABLE>
1  Operating cash flow (excluding change in working capital) is after changes in
   non-cash capital items. Operating cash flow per common share is considered a
   non-GAAP measure.

2  As of May 10, 2006, there were 87,910,534 common shares of the Company issued
   and outstanding, as well as 1,059,352,944 warrants (pre-consolidated basis at
   30 warrants exercisable for one common share) exercisable for an aggregate of
   35,311,764 common shares and 975 additional warrants (pre-consolidated). In
   addition, options exercisable for an aggregate maximum of 4,397,450 common
   shares were outstanding.

3  Non-GAAP reconciliation of cash cost per pound of zinc sold, net of
   by-product credits.

4  Excludes inventory changes at CMM.

5  Current and long term portion of long term debt, Province of Manitoba loan
   and capital leases ($181,040, $14,286, and $11,900 respectively) less cash
   and cash equivalents of $127,364.


                                                                               3
<PAGE>


HEALTH, SAFETY, ENVIRONMENT AND PRODUCT QUALITY

HudBay's total operations recorded a Lost Time Accident (LTA) frequency rate,
being the number of lost time injuries per 200,000 hours worked, for employees
and contractors of 1.1 for the first quarter of 2006. This is the first full
quarter to include the Balmat operations of St Lawrence Zinc Company, LLC (SLZ),
which are being reopened. Balmat operations recorded one LTA in the first
quarter producing a frequency rate of 2.4. The operations of Hudson Bay Mining
and Smelting Co., Limited (HBMS), which now includes those of its newly acquired
subsidiary White Pine Copper Refinery Inc (WPCR), recorded 4 LTA's in the
quarter for a frequency rate of 0.9. This compares with a frequency rate of 0.7
for the first quarter of 2005. However, HBMS' severity rate, being days lost per
200,000 hours worked, for the first quarter of 2006 was 9 compared to 24 for the
comparable period in 2005.

HBMS' operations, with the exception of WPCR, continue to have management
systems certified to both OHSAS 18001 for occupational health & safety and to
ISO 14001 for the environment. In addition the production and supply of its
final products are registered to the ISO 9001 quality standard. Both SLZ and
WPCR have commenced work on obtaining similar certification, with registration
targeted within 2 years.


OPERATIONS OVERVIEW

MINES AND CONCENTRATORS

777 MINE

The 777 mine is located immediately adjacent to the Company's principal
concentrator and metallurgical plant in Flin Flon, Manitoba.

Ore production at the 777 mine, for the quarter ended March 31, 2006, increased
by 32% compared to the quarter ended March 31, 2005 due to the planned ramp-up
in annual production to design capacity of 1.35 million tonnes.

Operating costs per tonne in the first quarter dropped by 12% compared to the
same period last year due primarily to increased production volumes. Zinc ore
grades increased 61% due to the ability to access portions of the 777 ore body
containing greater zinc content. Copper ore grades were 3% lower compared to the
same period last year consistent with mining areas with greater zinc content.
Gold and silver content in ore was 15% and 25% higher respectively in the first
quarter 2006 compared to the same period last year.


<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
                                      QUARTER     Quarter
                                        ENDED       Ended
                                      MAR 31,     Mar 31,         Q1
                                         2006        2005      2006/2005
                                -----------------------------------------
<S>                  <C>        <C>               <C>          <C>
Production           TONNES           321,849     243,248          + 32%
Copper grade         %                   2.17        2.23           - 3%
Zinc grade           %                   6.02        3.75          + 61%
Gold grade           G/TONNE             2.16        1.88          + 15%
Silver grade         G/TONNE            25.68       20.57          + 25%
Operating costs      $/TONNE            37.18       42.20          - 12%
- -------------------------------------------------------------------------
</TABLE>


                                                                               4
<PAGE>


TROUT LAKE MINE

The Trout Lake mine is approximately six kilometres from the Company's principal
ore concentrator and metallurgical plant in Flin Flon.

Ore production at the Trout Lake mine for the quarter ended March 31, 2006
decreased by 7% compared to the same quarter in 2005 due to a higher proportion
of tonnage being mined from pillars. Zinc ore grades dropped by 25% compared to
the same quarter in 2005 and copper ore grade increased by 48%. The grade
variation compared to the same quarter in 2005, was related to variability in
metal content of mining areas. Operating costs increased by 7% due to the higher
proportion of pillar mining where additional drilling and support costs were
necessary. Mining of a higher portion of pillars is expected to continue
throughout 2006.


<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
                                        QUARTER     Quarter
                                          ENDED       Ended
                                        MAR 31,     Mar 31,         Q1
                                           2006        2005      2006/2005
                                  -----------------------------------------
<S>                  <C>          <C>               <C>          <C>
Production           TONNES             198,973     213,055           - 7%
Copper grade         %                     1.90        1.28          + 48%
Zinc grade           %                     4.77        6.37          - 25%
Gold grade           G/TONNE               1.37        1.55          - 12%
Silver grade         G/TONNE              17.21       15.96           + 8%
Operating costs      $/TONNE              38.99       36.39           + 7%
- --------------------------------------------------------------------------
</TABLE>


CHISEL NORTH MINE

The Chisel North mine is approximately 10 kilometres from the Company's Snow
Lake ore concentrator, which is approximately 215 kilometres from Flin Flon.

Ore production from the mine for the first quarter 2006 decreased by 8% compared
to the same quarter of last year due to the reduced volume of longhole stoping
blocks compared to the same quarter in 2005. Zinc grades decreased by 11% in
line with the planned mining areas for the quarter. Operating costs per tonne of
ore increased by 58% in the first quarter largely due to mining greater amounts
of ore from first cuts in stopes, an increased amount of waste placed as
backfill in previously mined stopes as well as an increased amount of operating
development. Operating costs per tonne of ore are expected to return to normal
levels in subsequent quarters of 2006.


<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
                                         QUARTER    Quarter
                                           ENDED      Ended
                                         MAR 31,    Mar 31,          Q1
                                            2006       2005      2006/2005
                                     --------------------------------------
<S>                    <C>           <C>            <C>          <C>
Production             TONNES             79,678     86,545           - 8%
Zinc grade             %                    8.58       9.64          - 11%
Operating costs        $/TONNE             57.34      36.28          + 58%
- ---------------------------------------------------------------------------
</TABLE>


                                                                               5
<PAGE>


FLIN FLON CONCENTRATOR

The Flin Flon concentrator, produces zinc and copper concentrates from ore mined
at the 777 and Trout Lake mines.

For the first quarter of 2006 the Flin Flon concentrator ore tonnage throughput
was similar compared to the same quarter last year. Copper head grade increased
slightly while zinc head grade increased by 17% in line with higher zinc ore
grade obtained from the 777 mine. Gold and silver grades also increased
principally as a result of increased gold and silver content from the 777 mine
ore production. Copper and zinc recoveries increased compared to the same
quarter last year, due to optimization work completed in the concentrator during
2005 and higher ore head grades. Gold recovery however was lower compared to the
same period last year in part due to the change in ore copper and zinc head
grades. Operating costs per ore tonne processed were 1% lower compared to the
same quarter in 2005.


<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
                                                  QUARTER    Quarter
                                                    ENDED      Ended
                                                  MAR 31,    Mar 31,          Q1
                                                     2006       2005      2006/2005
                                             ---------------------------------------
<S>                               <C>        <C>             <C>          <C>
Ore processed                     TONNES          550,289    552,829              -
Copper grade                      %                  2.14       2.10           + 2%
Zinc grade                        %                  5.27       4.52          + 17%
Gold grade                        G/TONNE            1.82       1.71           + 6%
Silver grade                      G/TONNE           21.81      16.95          + 29%
Copper concentrate                TONNES           45,246     45,666           - 1%
Concentrate grade                 CU %              24.02      23.06           + 4%
Zinc concentrate                  TONNES           48,179     39,448          + 22%
Concentrate grade                 ZN %              51.84      50.34           + 3%
Copper recovery                   %                 92.10      90.80           + 1%
Gold recovery                     %                 70.60      77.30           - 9%
Silver recovery                   %                 60.90      68.10          - 11%
Zinc recovery                     %                 86.10      79.40           + 8%
Operating costs                   $/TONNE            8.15       8.21           - 1%
- ------------------------------------------------------------------------------------
</TABLE>


SNOW LAKE CONCENTRATOR

The Snow Lake concentrator is approximately 225 kilometres from the Flin Flon
concentrator and metallurgical plant.

For the first quarter of 2006, the Snow Lake concentrator ore throughput
decreased by 6% which is consistent with the decreased Chisel North mine
production and the zinc ore head grades. Recoveries of zinc were essentially
similar to the same quarter in 2005, despite the lower ore head grade. Operating
costs per tonne of ore processed increased by 12% due to increased maintenance
costs within the plant and the lower tonnage milled.


                                                                               6
<PAGE>

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------
                                                QUARTER     Quarter
                                                  ENDED       Ended
                                                MAR 31,     Mar 31,          Q1
                                                   2006        2005      2006/2005
                                           ----------------------------------------
<S>                           <C>          <C>              <C>          <C>
Ore processed                 TONNES             80,241      85,632           - 6%
Zinc ore                      %                    8.60        9.64          - 11%
Zinc concentrate              TONNES             13,012      15,827          - 18%
Concentrate grade             ZN %                51.56       50.91           + 1%
Zn recovery                   %                   97.30       97.60              -
Operating costs 1             $/TONNE             18.48       16.51          + 12%
- -----------------------------------------------------------------------------------
</TABLE>
1  Operating costs include the cost of trucking concentrates to the Flin Flon
   metallurgical plant.


METALLURGICAL PLANTS

COPPER SMELTER

The copper smelter in Flin Flon treats copper concentrate and produces copper
anodes, which are railed to the White Pine copper refinery in Michigan, USA.

Both copper concentrate from HudBay owned mines and copper concentrate purchased
from others are treated at the smelter. Approximately 30% of the concentrate
tonnage treated at the copper smelter was purchased concentrate during the first
quarter of 2006. Our Company has long term contracts with both Highland Valley
Copper and Montana Resources for the purchase of copper concentrate
requirements.

Copper production for the first quarter of 2006 increased by 14% compared to the
same quarter last year. On a unit cost of copper produced basis, operating costs
were 5% higher in the first quarter of 2006 as compared to the first quarter
last year, primarily as a result of an increase in heavy fuel oil costs.

The smelter plans to proceed with the previously announced 28 day temporary
maintenance shutdown during the second quarter of 2006. The maintenance shutdown
is primarily to rebuild the reverberatory furnace, which is rebuilt every few
years. Management of copper anode inventory between the copper smelter and the
White Pine copper refinery will in part, mitigate the impact on sales. HBMS'
mines and concentrators will continue to operate during the shutdown.

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
                                                     QUARTER    Quarter
                                                       ENDED      Ended
                                                     MAR 31,    Mar 31,          Q1
                                                        2006       2005      2006/2005
                                                ---------------------------------------
<S>                             <C>             <C>             <C>          <C>
Domestic conc. treated          TONNES                57,714     48,352          + 19%
Purchased conc. treated         TONNES                24,363     28,839          - 16%
                                                ---------------------------------------
Total                           TONNES                82,077     77,191           + 6%
Copper produced                 TONNES                23,686     20,698          + 14%
Gold                            TROY OZ.              26,511     25,774           + 3%
Silver                          TROY OZ.             390,230    338,295          + 15%
Operating costs                 (cent)/LB. CU          24.80      23.60           + 5%
- ---------------------------------------------------------------------------------------
</TABLE>


                                                                               7
<PAGE>

WHITE PINE COPPER REFINERY

The White Pine copper refinery in Michigan, electro-refines HBMS copper anode,
railed from Flin Flon, into market standard cathode copper. During processing,
anode slimes, which contain precious metals are recovered, dried and sold.
Approximately 18%, of the copper anode shipped to White Pine remains after
electro-refining and it is railed and sold to third parties.

London Metals Exchange (LME) grade copper cathode is railed and sold to various
customers in the business of making wire, tube and brass.

Copper cathode production increased by 11%, in the first quarter compared to the
same quarter last year. Operating costs per pound of cathode copper produced
increased by 2% primarily related to an increase in electrical energy costs.

The refinery plans to do routine repairs to some of its electrolysis cells
during part of the copper smelter temporary planned maintenance shutdown. The
managed anode inventory at White Pine will maintain the refinery at
approximately 90% capacity during the second quarter, 2006 including the period
of the copper smelter maintenance shutdown.


<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
                                                       QUARTER    Quarter
                                                         ENDED      Ended
                                                       MAR 31,    Mar 31,          Q1
                                                          2006       2005      2006/2005
                                                  ---------------------------------------
<S>                           <C>                 <C>             <C>          <C>
Anodes received               TONNES                    20,888     21,107           - 1%
Cathode produced              TONNES                    17,761     16,045          + 11%
Spent anode produced          TONNES                     3,222      3,054           + 6%
Liberator anode produced      TONNES                       643        649           - 1%
Cathode shipped               TONNES                    18,682     17,155           + 9%
Slimes produced               TONNES                        48         48              -
Operating costs               US(cent)/LB. CU CATHODE     6.31       6.21           + 2%
- -----------------------------------------------------------------------------------------
</TABLE>


ZINC PLANT

The zinc plant in Flin Flon uses leading edge technology and includes an oxygen
plant, two-stage pressure leach plant, four step solution purification, an
electrolysis plant and a casting plant. The zinc plant produces special high
grade zinc and other zinc alloys for sale.

Production of cast zinc metal, during the first quarter compared to the same
quarter in 2005, increased by 2% to 29,906 tonnes. All metal produced was from
the processing of concentrate from HBMS mines.

For the first quarter of 2006, operating costs in the zinc plant, on a unit cost
of zinc metal produced basis, increased by 6% compared to the same quarter last
year.

During the second quarter of 2006 and similar to 2005, a routine ten-day annual
maintenance shutdown is planned for the zinc plant. HBMS' mines and
concentrators will continue to operate.


                                                                               8
<PAGE>


<TABLE>
- ---------------------------------------------------------------------------------------
                                                     QUARTER    Quarter
                                                       ENDED      Ended
                                                     MAR 31,    Mar 31,          Q1
                                                        2006       2005      2006/2005
                                                ---------------------------------------
<S>                          <C>                <C>             <C>          <C>
Domestic conc. treated       TONNES                   58,207     58,809           - 1%
Purchased conc. treated      TONNES                      NIL        nil            nil
                                                ---------------------------------------
Total conc. treated          TONNES                   58,207     58,809           - 1%
Zn produced                  TONNES                   29,906     29,204           + 2%
Operating costs              (cent)/LB. ZN             26.40      24.90           + 6%
- ---------------------------------------------------------------------------------------
</TABLE>


ZINC OXIDE FACILITY - ZOCHEM

Zochem is HudBay's zinc oxide production facility in Brampton, Ontario. Zochem
processes between 32,000 and 41,000 tonnes of HudBay's zinc metal annually.

Zochem has a total production capability of 45,000 tonnes per annum of zinc
oxide. In the first quarter of 2006, Zochem consumed approximately 8,823 tonnes
of zinc, of which 8,771 tonnes was from HBMS, and sold 11,220 tonnes of zinc
oxide.

During the first quarter of 2006, work commenced on a project, which will use
robots to bag zinc oxide, resulting in increased productivity and reduction of
ergonomic risk to employees.


                                                                               9
<PAGE>


FINANCIAL REVIEW

The following table sets forth our selected consolidated financial information.

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
                                2006                     2005                                  2004
                                  Q1         Q4         Q3         Q2         Q1        Q4         Q3         Q2
                           --------------------------------------------------------------------------------------
                                                   ($000s, except per share information)
                           --------------------------------------------------------------------------------------
<S>                        <C>          <C>        <C>        <C>        <C>       <C>        <C>        <C>
Net Revenue                  207,963    173,051    169,264    158,188    151,525    13,308          6          7
Earnings (loss)               75,986     43,941     23,405      8,691      9,181    (2,891)    (3,282)    (2,083)
Per Common Share
    Basic                       0.89       0.52       0.28       0.11       0.12     (0.18)     (0.45)     (0.30)
    Diluted 1                   0.70       0.47       0.28       0.11       0.12     (0.18)     (0.45)       n/a
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
1 Based on the treasury method of calculating diluted shares outstanding.


REVENUE

For the quarter, total revenue was $208.0 million, resulting from the sale of
30,172 tonnes of zinc (which includes 8,771 tonnes to our Zochem facility),
18,932 tonnes of cathode copper, 14,846 ounces of gold and 232,456 ounces of
silver. Zochem had sales of 11,220 tonnes of zinc oxide.

Over the quarter, realized prices averaged US $1.08/lb. zinc, US $2.33/lb.
copper, US $532 oz. gold, and US $9.29 oz. silver. The Canadian to US dollar
exchange rate averaged Cdn $1.15 per US $1.00 for the quarter.

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
                                                     QUARTER      Quarter                                   Year
                                                       ENDED        Ended                                  Ended
                                                     MAR 31,      Mar 31,           Q1         Q1 1      Dec 31,
                                                        2006         2005    2006/2005      Average         2005
                                                -----------------------------------------------------------------
<S>                                             <C>               <C>        <C>            <C>          <C>
REALIZED METAL PRICES & EXCHANGE RATE
Zinc (US $/lb.)                                         1.08         0.62        + 74%         1.02         0.65
Copper (US $/lb.)                                       2.33         1.49        + 56%         2.25         1.72
Gold (US $/troy oz.)                                     532          426        + 25%          554          445
Silver (US $/troy oz.)                                  9.29         7.23        + 28%         9.70         7.28
Cdn/US exchange rate                                    1.15         1.23         - 7%         1.15         1.21
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
1 LME average for zinc and gold prices, Comex average for copper and silver
prices.


EXPENSES

OPERATING EXPENSES

Operating expenses in the first quarter of 2006 of $121.9 million increased by
approximately 4% compared to $117.7 million in the same quarter in 2005. This
increase primarily related to increased profit sharing expenses (10% of 2005 net
profit distributed among eligible employees) of $5.2 million due to higher net
profit of HBMS, an increase in concentrate purchase costs of net $16.2 million
(we treated less purchased copper concentrate, however we paid more due to
higher copper prices) partially offset by accumulated inventory.


GENERAL AND ADMINISTRATIVE

Total general and administrative expenses for the quarter were $5.9 million
compared to $3.6 million for the same quarter of 2005. Stock based compensation
costs of $2.3 million were incurred due to the granting of stock options to
employees and directors during the quarter whereas no plan was in place in the
first quarter of 2005.


                                                                              10
<PAGE>


EXPLORATION EXPENSES

Surface exploration expenditures of $3.1 million were incurred in the first
quarter 2006, primarily funded by a previously announced flow through share
program. During the first quarter of 2005 the level of exploration expenditures
was significantly lower as no flow-through program was in place.


FOREIGN EXCHANGE GAIN

In the first quarter of 2006, the Company incurred a foreign exchange gain of
$1.2 million relating primarily to the change in the value of the Company's cash
and accounts receivable balances which are held largely in US dollars and
converted to Canadian dollars at a quarter end exchange rate of Cdn $1.168 per
US $1.00 versus $1.163 at year end. For the quarter ended March 31, 2005, there
was a slight overall movement in foreign exchange rates resulting in a gain of
$0.3 million.


OPERATING EARNINGS

For the quarter, operating earnings were $62.1 million compared to $16.5 million
for the three months ended March 31, 2005. The favourable variance of $45.6
million is mainly attributable to higher metal prices, with small offsets for
increased costs for concentrates, general and administration and operating
expenses.


INTEREST EXPENSE

The interest expense for the quarter of $4.7 million was slightly lower than the
same quarter in 2005 as US $19 million of our long-term debt was repurchased
during 2005 and the US exchange rate was lower.


GAIN ON DERIVATIVE INSTRUMENTS

In the quarter, the Company recorded a $4.3 million gain on derivative
instruments compared to a $2.3 million gain for the quarter ended March 31,
2005. The derivatives are forward contracts of zinc and to a lesser extent zinc
oxide, placed in conjunction with CMM fixed price sales contracts to convert the
fixed price zinc sales contracts to floating prices.


TAX RECOVERY

For the quarter, the Company recorded a recovery of taxes of $14.3 million, of
which $12.3 million was related to the increase in the tax asset and $3.7
million was related to the flow-through share renunciation offset by other
current and deferred taxes of $1.7 million. The tax asset has been adjusted to
reflect the future income tax assets at an amount that the Company considers is
more likely than not to be realized. Since HBMS had many years of tax losses,
the tax asset has been based on only one future year of earnings. One year is
considered appropriate due to the uncertainties of future metal prices, exchange
rates and the magnitude of prior losses, but the asset was increased in light of
higher metal price projections. In the first quarter of 2005, a tax expense was
recorded of $2.8 million. The Company has sufficient tax pools to shelter
taxable income and does not anticipate significant cash income taxes in the
foreseeable future.


ANALYSIS OF MARCH 31, 2005 TO MARCH 31, 2006

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------
                                                                    ($ millions)
                                                                   --------------
<S>                                                                <C>
Earnings - First Quarter 2005                                              $ 9.2
Additional revenue from higher metal prices and production                  56.4
Operating costs                                                             (4.2)
Stock based compensation                                                    (2.3)
Depreciation and amortization                                               (2.8)
Exploration                                                                 (2.6)
Foreign exchange - operating                                                 1.0
Gain on derivative instruments                                               2.0
Tax recovery - income tax asset                                             12.3
Tax recovery - flow-through share renouncement                               3.7
Other                                                                        3.3
                                                                   --------------
Earnings - First Quarter 2006                                              $76.0
- ---------------------------------------------------------------------------------
</TABLE>


                                                                              11
<PAGE>


CASH COST PER POUND OF ZINC SOLD

HudBay's cash cost of zinc sold, net of by-product credits, for the first
quarter of 2006 was US $0.05 per pound.


NON-GAAP RECONCILIATION OF CASH COST PER POUND OF ZINC SOLD, NET OF BY-PRODUCT
CREDITS
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
                                                                QUARTER           Quarter           Year
                                                                  ENDED             Ended          Ended
                                                                MAR 31,           Mar 31,         Dec 31,
                                                                   2006              2005           2005
                                                         ------------------------------------------------
                                                                               ($000)
                                                         ------------------------------------------------
<S>                                                      <C>                    <C>            <C>
Expenses                                                      C$145,883         C$135,049      C$569,469

Non-cash operating costs
    Depreciation and amortization                               (15,542)          (12,724)       (53,100)
    Stock-based compensation                                     (2,251)                -         (2,674)
    Accretion and other non-cash                                   (660)             (652)        (2,612)
    Exploration                                                  (3,134)             (569)       (11,281)
    Foreign exchange gain (loss)                                  1,268               250         (2,338)
                                                         ------------------------------------------------
                                                                125,562           121,354        497,464
Less: By-product credits 1                                     (121,753)         (106,263)      (450,097)
                                                         ------------------------------------------------
Cash cost net of by-products                                    C$3,809          C$15,091       C$47,367
Exchange rate (C$/US$) 2                                          1.155             1.227          1.211
                                                         ------------------------------------------------
Cash cost net of by-products                                  US $3,300        US $12,299     US $39,114
Zinc sales (000 lbs.)                                            66,517            59,739        252,760
                                                         ------------------------------------------------
Cash cost per pound of zinc, net of by-product credits         US $0.05          US $0.21       US $0.16
- ---------------------------------------------------------------------------------------------------------
</TABLE>
1  By-product credits include revenues from sale of copper, gold, silver, zinc
   oxide sales (excluding quarter end inter-company inventory adjustments) and
   the Company's proportionate share of by-product sales by its marketing joint
   venture.

2  Weighted average exchange rate for sales during the period.


CASH COST PER POUND OF ZINC SOLD, NET OF BY-PRODUCT CREDITS, IS FURNISHED TO
PROVIDE ADDITIONAL INFORMATION AND IS A NON-GAAP MEASURE THAT DOES NOT HAVE A
STANDARDIZED MEANING AND IS THEREFORE UNLIKELY TO BE COMPARABLE TO SIMILAR
MEASURES PRESENTED BY OTHER ISSUERS. THIS MEASURE SHOULD NOT BE CONSIDERED IN
ISOLATION AS A SUBSTITUTE FOR MEASURES OF PERFORMANCE PREPARED IN ACCORDANCE
WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES AND IS NOT NECESSARILY INDICATIVE
OF OPERATING EXPENSES AS DETERMINED UNDER GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES. THIS MEASURE IS INTENDED TO PROVIDE INVESTORS WITH INFORMATION ABOUT
THE CASH GENERATING CAPABILITIES OF HBMS' OPERATIONS. HBMS USES THIS INFORMATION
FOR THE SAME PURPOSE. THIS ANALYSIS EXCLUDES CAPITAL EXPENDITURES.

ALL PER POUND VALUES IN THE FOLLOWING SECTION ARE ROUNDED TO THE CLOSEST CENT.

The above table shows a US $0.16 per pound net decrease in the cash cost per
pound of zinc sold for the quarter ended March 31, 2006 compared to the quarter
ended March 31, 2005. The decrease per pound of zinc is comprised of favourable
variances of approximately US $0.25 from by-product credits, US $0.02 from
higher volumes, offset by higher costs of US $0.06 largely due to the higher
price of purchased copper concentrate and the impact of a stronger Canadian
dollar of US $0.05.

The calculation of cash cost per pound of zinc sold is significantly influenced
by by-product metal prices, which may fluctuate going forward.


                                                                              12
<PAGE>


OPERATING COSTS

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
                                                                       QUARTER      Quarter                      Year
                                                                         ENDED        Ended                     Ended
                                                                       MAR 31,      Mar 31,         Q1 1      Dec 31,
                                                                          2006         2005    2006/2005         2005
                                                                  ----------------------------------------------------
<S>                                                     <C>       <C>               <C>      <C>              <C>
MINES
      777                                               $/TONNE          37.18        42.20        - 12%        37.60
      Trout Lake                                        $/TONNE          38.99        36.39         + 7%        35.43
      Chisel North                                      $/TONNE          57.34        36.28        + 58%        42.40
      Konuto 2                                          $/TONNE              -        40.32            -        36.42
                                                                  ----------------------------------------------------
      Total mines                                       $/TONNE          40.45        39.16         + 3%        37.36

CONCENTRATORS
      Flin Flon                                         $/TONNE           8.15         8.21         - 1%         7.93
      Snow Lake                                         $/TONNE          18.48        16.51        + 12%        17.35

METALLURGICAL PLANTS & REFINERY
      Copper Smelter                                   $/LB. CU.          0.25         0.24         + 5%         0.25
      White Pine Copper Refinery                        US$/LB.           0.06         0.06         + 2%            -
      Zinc Plant                                       $/LB. ZN.          0.26         0.25         + 6%         0.26

Non-GAAP Reconciliation of Operating Expenses ($000)
Mines
      777                                                C$000          11,967       10,136        + 18%       41,119
      Trout Lake                                                         7,757        7,754           0%       30,425
      Chisel North                                                       4,569        3,141        + 45%       14,278
      Konuto                                                                14        3,510       - 100%       11,380
Concentrators
      Flin Flon                                                          4,481        4,538         - 1%       17,934
      Snow Lake                                                          1,483        1,414         + 5%        5,749
Metallurgical Plants
      Copper Smelter                                                    12,958       10,770        + 20%       46,975
      White Pine Copper Refinery                                         2,853            -            -            -
      Zinc Plant                                                        17,362       16,015         + 8%       65,082
Other
      Purchased Concentrate Treated                                     50,733       34,555          47%      161,906
      Anode Freight & Refining                                           2,357        6,313        - 63%       22,893
      Services & Administration                                          6,989        6,059        + 15%       26,353
      Care & Maintenance                                                    55          820        - 93%        3,440
      Zochem (excluding zinc purchases from HBMS)                        3,091        4,131        - 25%       13,887
      Other 3                                                           (4,782)       8,557       - 156%       19,097
                                                                  ----------------------------------------------------
Total Operating Expenses, per financials                               121,887      117,713         + 4%      480,518
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
1  Percentage variances are calculated from costs expressed to fractions of a
   cent.

2  Konuto was depleted of ore and closed in November 2005, stockpiled ore
   continued to be processed during the first quarter 2006.

3  Includes profit sharing, changes in domestic inventory, share of CMM and
   miscellaneous provisions.


                                                                              13
<PAGE>


CASH FLOWS, LIQUIDITY AND CAPITAL RESOURCES

The following table summarizes our cash flows for the three and twelve-month
periods ended March 31, 2006, March 31, 2005 and December 31, 2005.


OPERATING ACTIVITIES

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
                                                                      QUARTER      Quarter          Year
                                                                        ENDED        Ended         Ended
                                                                      MAR 31,      Mar 31,       Dec 31,
                                                                         2006         2005          2005
                                                                  ---------------------------------------
                                                                                 ($000's)
                                                                  ---------------------------------------
<S>                                                               <C>              <C>          <C>
Earnings for the period                                                75,986        9,181        85,218
Items not affecting cash                                                1,987       15,627        37,953
Net change in non-cash items                                          (51,847)       3,078        21,691
                                                                  ---------------------------------------
Cash generated by (required for) operating activities                  26,126       27,886       144,862
Cash generated by (required for) investing activities                 (44,029)      (2,847)      (57,430)
Cash generated by (required for) financing activities                   3,345        7,617        (7,368)
Foreign exchange gain (loss) on cash held in foreign currency             262          244        (2,957)
                                                                  ---------------------------------------
Increase (decrease) in cash and cash equivalents                      (14,296)      32,900        77,107
- ---------------------------------------------------------------------------------------------------------
</TABLE>

As of March 31, 2006, HudBay had cash and cash equivalents of $127.4 million
compared to $141.7 million as at December 31, 2005 and $97.5 million as at March
31, 2005.

Cash flow from operating activities totaled $26.1 million for the quarter
compared to $27.9 million for the quarter ended March 31, 2005. Significant
changes in non-cash working capital affecting the quarterly cash flow were
increases in accounts receivable of $42.1 million and inventory of $14.5
million. Accounts receivable increase was due to changes in payment terms with
the new copper cathode sales contracts as well as increased metal prices for all
receivables. Inventories fluctuations include an increase in anode inventory at
the White Pine refinery to allow refinery production during the smelter
shutdown, as well as a slight increase in gold and zinc inventories that would
be within normal fluctuations of working levels. Interest of $8.7 million was
paid in January on the long-term debt. The remaining difference was a result of
normal working capital fluctuations.

In the quarter a total of $44.0 million was required for investing activities,
which related largely to the purchase of the shares of White Pine Copper
Refinery Inc. of $17.9 million, additional expenditures for Balmat of $8.3
million and capitalized mine development and other sustaining capital
expenditures of $18.7 million which was slightly higher than the prior quarter.
Financing activities in the quarter resulted in cash generation of $3.3 million
with approximately $5.4 million proceeds from the exercise of warrants and stock
options offset by a $1.2 million repurchase of debt and a $0.9 million repayment
under capital lease obligations.

As at March 31, 2006, HudBay had long-term financial debt (excluding the current
portion) of $191.3 million essentially unchanged from December 31, 2005, but
$8.0 million lower than March 31, 2005 due to lower foreign exchange rates,
repayments of notes and capital leases. The Company will continue to consider,
from time to time, reducing debt further.

Cash outflow for the quarter was $14.3 million compared to a cash inflow of
$32.9 million for the quarter ended March 31, 2005 as the following chart will
demonstrate.

In the second quarter of 2006 the Company has paid $10.6 million (or $7,600 per
employee) related to the HBMS employees' profit sharing plan based on 10% of
HBMS's 2005 eligible income.


                                                                              14
<PAGE>


CASH FLOW VARIANCE ANALYSIS

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------
                                                               ($ millions)
                                                              --------------
<S>                                                           <C>
Cash increase - First Quarter 2005                                   $ 32.9
Cash earnings                                                          53.1
Non-cash working capital - receivables                                (45.4)
Non-cash working capital - inventories                                (24.8)
Non-cash working capital - prepaid and other assets                     4.7
Non-cash working capital - interest and other payables                 10.5
Change in restricted cash                                             (13.0)
Investment in WPCR (net of cash)                                      (17.0)
Capital expenditures                                                   (9.7)
Change in shares, warrants, options                                    (3.2)
Repayment of senior secured notes                                      (1.2)
Repayment of capital leases                                            (1.5)
Other                                                                   0.3
                                                              --------------
Cash (decrease) - First Quarter 2006                                 $(14.3)
- ----------------------------------------------------------------------------
</TABLE>


FINANCIAL CONDITION

FINANCIAL CONDITION AT MARCH 31, 2006 COMPARED TO FINANCIAL CONDITION AS AT
DECEMBER 31, 2005

Cash and cash equivalents at March 31, 2006 decreased by $14.3 million to $127.4
million compared to December 31, 2005.

Working capital improved by $53.5 million. Accounts receivable increase was due
to changes in payment terms with the new copper cathode sales contracts as well
as increased metal prices for all receivables. Inventories fluctuations include
an increase in anode inventory at the White Pine refinery to allow refinery
production during the smelter shutdown, as well as a slight increase in gold and
zinc inventories that would be within normal fluctuations of working levels.

Common share capital increased by $4.3 million from exercise of warrants and
$1.2 million from exercise of options.

HudBay's contractual obligations at March 31, 2006 are materially unchanged from
December 31, 2005 except for increases in purchase and services commitments at
the end of March relating to the higher levels of expenditures expected during
the planned plant maintenance shutdowns of approximately $7.0 million with
various suppliers.

The Company has established with the Bank of Nova Scotia a revolving credit
facility in the total amount of $25.0 million. In addition, the bank may consent
to increasing the credit facility to $50.0 million if HBMS satisfies certain
conditions. The facility closed in February 2006.

The Collective Bargaining Agreements (CBA's) with the unionized HBMS' Flin
Flon/Snow Lake workforce expired on December 31, 2005. In 1998, and in support
of the $435 million 777 Project, HBMS entered into an Amending Agreement in
respect of certain of its collective bargaining agreements. The Amending
Agreement prohibits strikes and lockouts and provides for binding arbitration
through to 2012 in the event that negotiated CBA settlements are not achieved.
The formal negotiations have ceased and binding arbitration is planned for later
in 2006.


                                                                              15
<PAGE>


RISK MANAGEMENT

The Company uses forward exchange contracts to limit the effects of movements in
exchange rates on foreign currency denominated assets and liabilities and future
anticipated transactions. At March 31, 2006 the Company held US dollar put
options giving it the right, but not the obligation, to sell up to US $52.5
million in equal quarterly amounts at $1.20482 per US dollar continuing to
January 2009.

From time to time the Company maintains price protection programs and conducts
commodity price risk management to reduce risk through the use of financial
instruments. The Company manages risk associated with forward physical sales
that are made on a fixed price basis regarding zinc and zinc oxide and,
accordingly, enters into forward zinc purchase contracts. These contracts
effectively offset the Company's forward sales price commitments. In the current
environment of strong base metal market prices, the Company has benefited from
full exposure to metal price movements, but may consider implementing protection
to limit the effects of future price changes.


OUTLOOK

BALMAT REOPENING

HudBay decided in 2004 to re-open its wholly owned Balmat mine and concentrator
after completion of an internal feasibility study.

The Balmat zinc mine is located near a multi-modal transportation system for
concentrate. Most of the mines production will be treated at the CEZ refinery
close to Montreal, some 158 kilometres from the mine.

The Balmat mine has been maintained to a high standard while on care and
maintenance since October 2001. It includes a 3,200 foot deep shaft, underground
excavations to access the ore zones, extensive mining equipment and a 5,000 ton
per day ore concentrator. Recovery of zinc to concentrate is expected to be 96%,
producing a concentrate containing 55.5% zinc. At full production in 2008, the
mine is expected to produce approximately 60,000 tons of zinc metal in
concentrate and up to 40% of the concentrate may be treated at HudBay's zinc
plant in Manitoba.

Production of concentrate is on track for the second quarter of 2006 as planned;
however, due to lower than expected availability of mining contractors, the ramp
up in production may be slightly slower than originally anticipated. Projected
capital costs have been increased by approximately 4.6% largely due to
escalation of prices and a greater amount of steel rehabilitation required in
the concentrator areas compared to the original estimate. Most mobile equipment
has been delivered to site and is being moved underground.

At the end of the first quarter, 129 employees have been hired with some 22
contractors doing underground development. Currently 90% of the senior
management positions have been filled and it is expected to be 100% by the end
of the second quarter.

Life of mine total unit zinc production costs, including concentrate treatment
and capital expenditures, are expected to average US $0.48 lb. (US $0.57 per lb.
for 2006 to 2008, and US $0.43 per lb. thereafter) some escalation of
operational cost per pound of zinc is expected if high zinc prices persist as
refinery concentrate treatment charges will increase through refinery zinc price
participation.

We expect Balmat's first concentrate in the second quarter of 2006 and then
increasing to full production in 2008.


                                                                              16
<PAGE>


EXPLORATION & INCREASED LAND POSITION


In the second quarter of 2006, the Company raised gross proceeds of $20 million
through an issue of flow through common shares. This will provide funding for
the $10 million planned expenditures during 2006 and 2007.

During the first quarter approximately $3.1 million was spent on exploration
activities which was somewhat less than that expected during the winter season.
Diamond drilling on surface was impacted by unfavourable winter freezing
conditions reducing access to drill sites. Exploration work continues in the
Snow Lake and Flin Flon areas on prospective targets. HBED land holdings
increased to approximately 300,000 hectares due to the acquisition of an
additional 94,000 hectares in the Greenstone belt. In addition, the Company also
expects to be exploring the approximate 20,000 hectares of land adjacent to its
Balmat mine in New York State, its lead/zinc deposit, Tom Valley in the Yukon
Territory, as well its zinc holdings in Ontario and copper holdings in Chile.


DIVESTITURE OF SCOZINC

In December 2005, we announced we had entered into a letter of intent to sell
ScoZinc (Gays River lead and zinc mineral property) to Acadian Gold Corporation
for $7.5 million. The agreement was executed April 7, 2006 and the sale is
expected to close on July 6, 2006.


RELATIONSHIP CHANGE WITH CONSIDAR METAL MARKETING INC. (CMM)

In the second quarter of 2006, the Company plans to change the contractual
arrangement with CMM to convert HudBay's zinc and zinc oxide products from a
sale to an agency arrangement. In January of 2006, the Company converted its
copper, gold and silver to a similar arrangement.


FURTHER DEBT REDUCTION

In April 2006, we announced we had repurchased a further $30 million of the 9?%
US notes to reduce the outstanding amount of this debt to US $125 million. In
2006, the Company, may, from time to time, divert cash toward further debt
reduction.


WARRANT TRANSACTION

On April 21, 2006, the Company filed a preliminary short form prospectus in
connection with a proposal to issue new common shares as an incentive for
holders of its publicly-traded warrants to exercise such warrants during a
30-day early exercise period expected to commence on or about June 5, 2006.



FORWARD LOOKING STATEMENTS

This MD&A contains certain forward-looking statements. All statements, other
than statements of historical fact, included herein, including without
limitation, statements regarding the Company's future plans and objectives are
forward-looking statements that involve various risks and uncertainties. There
can be no assurance that such statements will prove accurate, and actual results
and future events could differ materially from those anticipated in such
statements.

Important factors that could cause actual results to differ materially from the
Company's expectations are disclosed in documents that we have filed from time
to time with the Canadian and other regulatory authorities.


                                                                              17
<PAGE>


Certain items of financial information in this MD&A, including operating cash
flow per common share, unit operating expenses, and cash cost per pound of zinc,
net of by-product credits, are non-GAAP measures and are furnished to provide
additional information. As non-GAAP measures they neither have standardized
meanings nor are they necessarily comparable with similar measures presented by
other companies. These measures should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with generally
accepted accounting principles and are not necessarily indicative of operating
expenses as determined under generally accepted accounting principles. These
measures are intended to provide investors with information about the cash
generating capabilities of the Company's operations. HudBay uses this
information for the same purpose. Mining operations are capital intensive. These
measures exclude capital expenditures. Capital expenditures are discussed
throughout the MD&A and the consolidated financial statements.


                                                                              18
<PAGE>


APPENDIX - PRODUCTION RESULTS

FIRST QUARTER RESULTS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
                                       QUARTER        Quarter       Quarter          Year
                                         ENDED          Ended         Ended         Ended
                                       MAR 31,        Mar 31,       Dec 31,       Dec 31,        Q1, 2006/    Q1, 2006/
MINES                                     2006           2005          2005          2005         Q1, 2005     Q4, 2005
                                 ---------------------------------------------------------------------------------------
<S>                   <C>        <C>                  <C>           <C>         <C>              <C>          <C>
777
      Ore             TONNES           321,849        243,248       308,099     1,093,683            + 32%         + 4%
      Copper          %                   2.17           2.23          2.28          2.24             - 3%         - 5%
      Zinc            %                   6.02           3.75          5.10          4.47            + 61%        + 18%
      Gold            G/TONNE             2.16           1.88          2.06          2.09            + 15%         + 5%
      Silver          G/TONNE            25.68          20.57         24.56         23.83            + 25%         + 5%

TROUT LAKE
      Ore             TONNES           198,973        213,055       214,981       858,751             - 7%         - 7%
      Copper          %                   1.90           1.28          1.79          1.39            + 48%         + 6%
      Zinc            %                   4.77           6.37          3.86          5.61            - 25%        + 24%
      Gold            G/TONNE             1.37           1.55          1.32          1.47            - 12%         + 4%
      Silver          G/TONNE            17.21          15.96         13.35         14.61             + 8%        + 29%

CHISEL NORTH
      Ore             TONNES            79,678         86,545        80,996       336,731             - 8%         - 2%
      Zinc            %                   8.58           9.64          8.97          9.00            - 11%         - 4%

KONUTO 1
      Ore             TONNES                 -         87,062        52,522       312,465              n/a          n/a
      Copper          %                      -           4.19          3.30          3.90              n/a          n/a
      Zinc            %                      -           1.39          2.36          1.81              n/a          n/a
      Gold            G/TONNE                -           1.73          1.73          1.65              n/a          n/a
      Silver          G/TONNE                -           8.48         11.46          9.15              n/a          n/a

TOTAL MINES
      Ore             TONNES           600,500        629,910       656,598     2,601,630             - 5%         - 9%
      Copper          %                   1.81           1.89          1.94          1.89             - 4%         - 7%
      Zinc            %                   5.95           5.12          4.95          5.11            + 16%        + 20%
      Gold            G/TONNE             1.71           1.58          1.59          1.64             + 8%         + 8%
      Silver          G/TONNE            21.91          17.86         19.95         19.40            + 23%        + 10%
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
1  Konuto mine closed in the fourth quarter of 2005.


                                                                              19
<PAGE>


FIRST QUARTER RESULTS

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
                                                 QUARTER    Quarter    Quarter       Year
                                                   ENDED      Ended      Ended      Ended
                                                 MAR 31,    Mar 31,    Dec 31,    Dec 31,      Q1, 2006/  Q1, 2006/
CONCENTRATORS                                       2006       2005       2005       2005       Q1, 2005   Q4, 2005
                                              ----------------------------------------------------------------------
<S>                                <C>        <C>           <C>        <C>      <C>            <C>        <C>
FLIN FLON CONCENTRATOR
      Ore                          TONNES        550,289    552,829    566,445  2,262,555              -       - 3%
      Copper                       %                2.14       2.10       2.23       2.14           + 2%       - 4%
      Zinc                         %                5.27       4.52       4.32       4.53          + 17%      + 22%
      Gold                         G/TONNE          1.82       1.71       1.75       1.78           + 6%       + 4%
      Silver                       G/TONNE         21.81      16.95      19.01      18.14          + 29%      + 15%

      Copper Concentrate           TONNES         45,246     45,666     49,465    188,851           - 1%       - 9%
      Concentrate Grade            % CU            24.02      23.06      23.99      23.82           + 4%          -

      Zinc Concentrate             TONNES         48,179     39,448     38,115    164,417          + 22%      + 26%
      Concentrate Grade            % ZN            51.84      50.34      52.15      51.51           + 3%       - 1%

      Copper recovery              %               92.10      90.80      93.70      92.80           + 1%       - 2%
      Gold recovery                %               70.60      77.30      72.50      74.90           - 9%       - 3%
      Silver recovery              %               60.90      68.10      66.10      66.30          - 11%       - 8%
      Zn recovery                  %               86.10      79.40      81.20      82.60           + 8%       + 6%

SNOW LAKE CONCENTRATOR
      Ore                          TONNES         80,241     85,632     82,729    331,427           - 6%       - 3%
      Zinc                         %                8.60       9.64       9.00       9.00          - 11%       - 4%

      Zinc Concentrate             TONNES         13,012     15,827     14,118     56,646          - 18%       - 8%
      Concentrate Grade            % ZN            51.56      50.91      51.21      51.25           + 1%       + 1%

      Zn recovery                  %               97.30      97.60      97.10      97.30              -          -
- --------------------------------------------------------------------------------------------------------------------
</TABLE>


                                                                              20
<PAGE>


FIRST QUARTER RESULTS

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
                                                   QUARTER    Quarter    Quarter       Year
                                                     ENDED      Ended      Ended      Ended
                                                   MAR 31,    Mar 31,    Dec 31,    Dec 31,      Q1, 2006/  Q1, 2006/
SMELTER                                               2006       2005       2005       2005       Q1, 2005   Q4, 2005
                                                ----------------------------------------------------------------------
<S>                              <C>            <C>           <C>        <C>        <C>          <C>        <C>
COPPER CONCENTRATE TREATED
    Domestic                         TONNES         57,714     48,352     55,172    206,343          + 19%       + 5%
    Purchased                        TONNES         24,363     28,839     28,828    111,935          - 16%      - 15%
    Total                            TONNES         82,077     77,191     84,000    318,278           + 6%       - 2%

WHITE PINE COPPER REFINERY
    Anodes received                  TONNES         20,888     21,107          -          -           - 1%          -
    Cathode produced                 TONNES         17,761     16,045          -          -          + 11%          -
    Spent anode produced             TONNES          3,222      3,054          -          -           + 6%          -
    Liberator anode produced         TONNES            643        649          -          -           - 1%          -
    Cathode shipped                  TONNES         18,682     17,155          -          -           + 9%          -
    Slimes produced                  TONNES             48         48          -          -              -          -
    Operating costs              US(cent)/lb. Cu      6.31       6.21          -          -           + 2%          -

ZINC PLANT
ZINC CONCENTRATE TREATED
    Domestic                         TONNES         58,207     58,809     59,856    228,107           - 1%       - 3%
    Purchased                        TONNES              -          -          -          -              -          -
    Total                            TONNES         58,207     58,809     59,856    228,107           - 1%       - 3%

METAL PRODUCED
FROM HUDBAY MINES
    Copper                           TONNES         15,096     11,411     13,822     49,179          + 32%       + 9%
    Zinc                             TONNES         29,893     29,177     30,485    114,557           + 2%       - 2%
    Gold                             TROY OZ.       26,074     25,197     25,311    100,144           + 3%       + 3%
    Silver                           TROY OZ.      281,678    214,608    264,259    916,810          + 31%       + 7%
FROM PURCHASED CONCENTRATES
    Copper                           TONNES          8,590      9,287      9,985     37,106           - 8%      - 14%
    Zinc                             TONNES             14         30         35        131          - 54%      - 60%
    Gold                             TROY OZ.          437        577        546      1,927          - 24%      - 20%
    Silver                           TROY OZ.      108,552    123,686    137,131    493,702          - 12%      - 21%
TOTAL METAL PRODUCED
    Copper                           TONNES         23,686     20,697     23,807     86,285          + 14%       - 1%
    Zinc                             TONNES         29,906     29,206     30,520    114,687           + 2%       - 2%
    Gold                             TROY OZ.       26,511     25,774     25,857    102,371           + 3%       + 3%
    Silver                           TROY OZ.      390,230    338,294    401,390  1,410,512          + 15%       - 3%
METAL SOLD 1
    Copper                           TONNES         18,932     20,382     17,644     78,070           - 7%       + 7%
    Zinc, incl sales to Zochem       TONNES         30,172     27,097     29,598    114,682          + 11%       + 2%
    Gold                             TROY OZ.       14,846     25,397     21,783     95,511          - 42%      - 32%
    Silver                           TROY OZ.      232,456    331,644    358,434  1,321,784          - 30%      - 35%
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
1  Excludes inventory changes at CMM.


                                                                              21
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.3
<SEQUENCE>4
<FILENAME>a2170399zex-99_3.txt
<DESCRIPTION>EXHIBIT 99.3
<TEXT>
<PAGE>
                                                                    Exhibit 99.3

                           [HUDBAY MINERALS INC LOGO]


FOR IMMEDIATE RELEASE:


               HUDBAY ANNOUNCES STRONG FIRST QUARTER 2006 RESULTS

Q1 2006 FINANCIAL HIGHLIGHTS
o    NET EARNINGS $76.0 MILLION OR $0.89 PER BASIC SHARE
o    OPERATING CASH FLOW $78.0 MILLION OR $0.91 PER BASIC SHARE
o    NET DEBT $79.9 MILLION
o    REVENUE $208.0 MILLION
o    CASH COST, NET OF BY-PRODUCT CREDITS US$0.05/LB. OF ZINC SOLD

Q1 2006 PRODUCTION HIGHLIGHTS COMPARED TO Q1 2005
o    ZINC PRODUCTION UP 700 TONNES TO 29,906 TONNES
o    COPPER IN ANODE PRODUCTION UP 3,000 TONNES TO 23,700 TONNES
o    GOLD PRODUCTION UP 3% TO 26,511 OZS.
o    SILVER PRODUCTION UP 15% TO 390,230 OZS.

Q1 CORPORATE HIGHLIGHTS
o    WHITE PINE COPPER REFINERY PURCHASE COMPLETED
o    BALMAT ZINC MINE REOPENING PROJECT - ON SCHEDULE
o    EXPLORATION LAND HOLDINGS INCREASED BY 94,000 HECTARES

WINNIPEG, MANITOBA - MAY 12, 2006 - HUDBAY MINERALS INC. (TSX:HBM) ("HudBay")
announced today an eight-fold increase in net earnings to $76.0 million or $0.89
per basic share on revenue of $208 million for the first quarter ended March 31,
2006. This compares to net earnings of $9.2 million on revenue of $151.5 million
for the first quarter of 2005.

"We are delighted with the results reported today," said Peter Jones, President
and Chief Executive Officer of HudBay. "The results show growth and achievement
at HudBay and our strong financial position at year end 2005 has further
improved in the first quarter of 2006."

Production of all metals was higher than in the same quarter in 2005, including
zinc at 29,906 tonnes (29,206)(1); copper in anode at 23,686 tonnes (20,697);
gold at 26,511 ozs. (25,774); and silver at 390,230 ozs. (338,294).


(1) VALUES SHOWN IN BRACKETS FOLLOWING THIS FOOTNOTE ARE FOR THE QUARTER ENDED
MARCH 31, 2005.

<PAGE>

                                       2


Total revenue for the quarter was $208.0 million ($151.5) from sales of 30,172
tonnes of zinc, (27,097) including sales to Zochem; 11,200 tonnes of zinc oxide
(10,300); 18,932 tonnes of copper (20,382); 14,846 ounces of gold (25,397) and
232,456 ounces of silver (331,644). During the quarter, sales of copper and
contained gold and silver were less than production due mainly to a planned
copper inventory increase related to a scheduled copper smelter shutdown.

Over the quarter, gross realized prices averaged US$1.08/lb. for zinc (US$0.62);
US$2.33/lb. for copper (US$1.49); US$532/oz. for gold (US$426) and US$9.29/oz.
for silver (US$7.23). For the quarter, the Canadian to US dollar exchange rate
averaged Cdn$1.15 per US$1.00 (Cdn$1.23).

Operating costs for the first quarter were $121.9 million ($117.7).

For the quarter, HudBay's cash cost, net of by-product credits, per pound of
zinc sold, was US$0.05 (US$0.21).

On January 1, 2006 HudBay completed the purchase of White Pine Copper Refinery
Inc., a Michigan-based copper refinery for $17.9 million and also during the
first quarter, our Balmat zinc mine reopening project continued on schedule.


EVENTS SUBSEQUENT TO THE END OF THE FIRST QUARTER

In April, HudBay announced that it had repurchased, through the open market, an
additional US$30 million of its 9 5/8% senior secured notes due January 5, 2012.
Note repurchases then totaled US$50 million, leaving a balance of US$125 million
of these notes outstanding.

Also in April, HudBay entered into an agreement with a syndicate of investment
dealers led by GMP Securities L.P., for the sale of 1.46 million flow-through
common shares at a price of $13.75 per share on an underwritten private
placement basis for aggregate gross proceeds to the Company of approximately $20
million. The private placement was successfully completed on April 25 and
proceeds will be used for exploration and development on HudBay's Canadian
properties.

In April, HudBay also filed a preliminary short form prospectus respecting its
warrants, in each of the provinces of Canada.

For further information, please see attached hereto, HudBay's management
discussion and analysis for the quarter ended March 31, 2006, and selected
financial information for the quarters ended March 31, 2006 and 2005. A copy of
HudBay's consolidated financial statements for the quarters ended March 31, 2006
and 2005, as well its MD&A for the quarter ended March 31, 2006, are available
on SEDAR at www.sedar.com and on the HudBay website at www.hudbayminerals.com.


ABOUT HUDBAY MINERALS INC.

HudBay Minerals Inc. is an integrated mining and metals company that operates
mines, concentrators and a metal production complex in northern Manitoba and
Saskatchewan. The company also owns a zinc oxide production facility in Ontario,
the White Pine Copper Refinery in Michigan, and the Balmat zinc mine in New York
state.

                                     - 30 -
<PAGE>

                                       3


FOR FURTHER INFORMATION, PLEASE CONTACT:

Don Bain
Director, Investor Relations
Tel:     (204) 949-4272
Fax:     (204) 942-8177
E-mail:don.bain@hbms.ca


CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This press release contains "forward-looking statements", within the meaning of
applicable Canadian securities legislation, concerning the business, operations
and financial performance and condition of HudBay. Forward-looking statements
include, but are not limited to, statements with respect to the future price of
zinc, copper, gold and silver, the estimation of mineral reserves and resources,
the realization of mineral reserve estimates, the timing and amount of estimated
future production, costs of production, capital expenditures, costs and timing
of the development of new deposits, success of exploration activities,
permitting time lines, currency exchange rate fluctuations, requirements for
additional capital, government regulation of mining operations, environmental
risks, unanticipated reclamation expenses, title disputes or claims, limitations
on insurance coverage, increased electricity, heavy fuel oil and natural gas
cost risk, inflation risks and risks associated with the re-opening of the
Balmat mine. Generally, these forward-looking statements can be identified by
the use of forward-looking terminology such as "plans", "expects" or "does not
expect", "is expected", "budget", "scheduled", "estimates", "forecasts",
"intends", "anticipates" or "does not anticipate", or "believes", or variations
of such words and phrases or state that certain actions, events or results
"may", "could", "would", "might" or "will be taken", "occur" or "be achieved".
Forward-looking statements are subject to known and unknown risks, uncertainties
and other factors that may cause the actual results, level of activity,
performance or achievements of HudBay, to be materially different from those
expressed or implied by such forward-looking statements, including but not
limited to: risks related to the integration of acquisitions; risks related to
international operations; risks related to joint venture operations; actual
results of current exploration activities; actual results of current reclamation
activities; conclusions of economic evaluations; changes in project parameters
as plans continue to be refined; future commodity prices; possible variations in
ore reserves, grade or recovery rates; failure of plant, equipment or processes
to operate as anticipated; accidents, labour disputes and other risks of the
mining industry; delays in obtaining governmental approvals or financing or in
the completion of development or construction activities, as well as those
factors discussed in the section entitled "Risk Factors" in HudBay's Annual
Information Form for the year ended December 31, 2005, available on
www.sedar.com. Although HudBay has attempted to identify important factors that
could cause actual results to differ materially from those contained in
forward-looking statements, there may be other factors that cause results not to
be as anticipated, estimated or intended. There can be no assurance that such
statements will prove to be accurate, as actual results and future events could
differ materially from those anticipated in such statements. Accordingly,
readers should not place undue reliance on forward-looking statements. HudBay
does not undertake to update any forward-looking statements that are
incorporated by reference herein, except in accordance with applicable
securities laws.

This press release is not an offer of securities for sale in the United States.
Securities may not be offered or sold in the United States absent registration
or an exemption from registration. Any public offering of securities that may be
made in the United States will be made by means of a prospectus that may be
obtained from the issuer and that will contain detailed information about the
company and management, as well as financial statements.
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
