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HUDBAY MINERALS INC.(the Company)

CODE OF BUSINESS CONDUCT AND ETHICS

INTRODUCTION

This Code of Business Conduct and Ethics (Code) sets
out basic principles to guide all directors, officers and employees of the
Company or any of its subsidiaries or affiliates1(collectively, the
HB Group) and all other persons acting on behalf of the HB Group
(collectively, with the directors, officers and employees of the HB Group,
HB Personnel) in the ethical conduct of business. All HB Personnel must
conduct themselves accordingly and seek to avoid even the appearance of improper
behavior. If a law conflicts with a policy in this Code, HB Personnel must
comply with the law.

The HB Group is committed to conducting business honestly,
ethically and in compliance with the laws of the jurisdictions in which it
operates and owns assets, and expects its suppliers and service providers to act
in the same manner. Operating our company openly, fairly and with integrity, and
insisting that others who act on our behalf do the same, is the proper way to
run our business and the right way to treat our stakeholders.

HB Personnel who violate the standards in this Code will be
subject to disciplinary action, which could include the termination of their
employment or other relationship with the HB Group. If you are in a situation
that you believe may violate or lead to a violation of this Code, follow the
guidelines described below under Compliance Procedures.

PURPOSE

The purpose of the Code is to:

- Promote honest and ethical conduct of all HB Personnel and promote the HB
  Groups longstanding culture of honesty and accountability;
- Promote avoidance of conflicts of interest between personal interests of HB
  Personnel and professional interests of the HB Group, and provide guidance in
  the ethical handling of actual or apparent conflicts of interest;
- Promote full, fair, accurate, timely and understandable disclosure in the
  HB Groups documents submitted to or filed with securities regulators, and in
  its other public communications;
- Ensure compliance with applicable laws, rules and regulations;

_______________________________

|1 | A company is a subsidiary of another company if it is
      controlled, directly or indirectly, by that other company (through one or
      more intermediaries or otherwise). A company is an affiliate of another
      company if either one of them is the subsidiary of the other company or if
      both are subsidiaries of the same company or if each of them is controlled
      by the same person or company.
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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- Promote the prompt internal reporting to an appropriate person of
  violations of this Code, including, through the use of the HB Groups
  confidential whistleblower service.

LEGAL COMPLIANCE

Compliance with Laws, Rules and Regulations (including
Insider Trading Laws and Timely Disclosure)

HB Personnel are expected to comply in good faith at all times
with all applicable laws, rules and regulations and behave in an ethical manner.

HB Personnel are required to comply with the Companys Timely
Disclosure, Confidentiality and Insider Trading Policy and all other policies
and procedures applicable to them that are adopted by the Company from time to
time.

HB Personnel must cooperate fully with Company officers in the
preparation of documents to be filed with the securities regulatory authorities
and all other publicly disclosed materials to ensure those persons are aware in
a timely manner of all information that is required to be disclosed. HB
Personnel should also cooperate fully with the independent auditors in their
audits and in assisting in the preparation of financial disclosure.

THIRD PARTY RELATIONSHIPS

Conflict of Interest

HB Personnel are required to act with honesty and integrity and
to avoid any relationship or activity that might create, or appear to create, a
conflict between their personal interests and the interests of the HB Group.

Conflicts of interest arise where an individuals private
interests interfere in any way with the interests of the HB Group. A conflict of
interest can arise when HB Personnel take actions or have interests that may
interfere with the performance of their work for the HB Group objectively,
giving priority to the HB Groups professional interests over their personal
interests, or interests of a third party. HB Personnel shall perform the
responsibilities of their positions on the basis of what is in the best
interests of the HB Group, free from the influence of personal considerations
and third party relationships.

Conflicts of interest may not always be clear-cut. If you have
a question, you should consult with your supervisor, department head, or the
Head of the Legal group. Any HB Personnel who become aware of a conflict or
potential conflict should bring it to the attention of their supervisor,
department head or Head of the Legal group and consult the procedures described
below under Compliance Procedures.

Gifts, Entertainment and Hospitality

Business gifts and entertainment are customary courtesies
designed to build goodwill and constructive relationships among business
partners. However, a problem may arise when these courtesies compromise, or
appear to compromise, the HB Groups ability to make fair and objective business
decisions or to gain an unfair advantage.

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HB Personnel or their immediate families shall not use their
position with the HB Group to solicit any cash, gifts or free services from any
HB Group customer, supplier or contractor for their or their immediate familys
or friends personal benefit. Gifts or entertainment from others should not be
accepted if they could be reasonably considered to be extravagant for the
employee, officer or director who receives it, or otherwise improperly influence
the HB Groups business relationship with or create an obligation to a customer,
supplier or contractor. In no circumstance will it be acceptable for HB
Personnel to accept a cash gift, regardless of the amount.

Similarly, no HB Personnel should ever offer, give or provide
any gift, entertainment or hospitality unless it is not a cash gift, is
consistent with customary business practices, is not excessive in value, cannot
be construed as a bribe or payoff, and does not violate any applicable laws.
Strict rules apply when the HB Group does business with governmental agencies
and officials, as discussed in more detail below.

In general, nominal gifts such as pens, caps, shirts and mugs
are acceptable. Invitations to social, cultural or sporting events may be
accepted if the cost is reasonable and your attendance serves a customary
business purpose such as networking. More extravagant or costly invitations
should only be accepted in consultation with your manager, and when in doubt,
the Companys Legal Department.

Payments to Government Personnel

All HB Personnel must comply with all laws prohibiting improper
payments to government officials, including the Corruption of Foreign Public
Officials Act(Canada) (the CFPOA) and the Foreign Corrupt
Practices Act(US) (the FCPA). These Acts prohibit, among other
things, offering, promising or giving (or authorizing any of those activities)
anything of value, directly or indirectly, to a foreign government official,
official of a political party or political candidate, or to any official of any
public international organization to influence any of their acts or decisions or
to obtain or retain business or secure any other improper advantage.

Similarly, other governments have laws regarding business gifts
that may be accepted by government personnel. The promise, offer or delivery to
an official or employee of various governments of a gift, favour or other
gratuity in violation of these laws would not only violate Company policy but
could also be a criminal offense. It is important for HB Personnel to consult
with the Companys Legal Department whenever they believe they may be embarking
on conduct that may raise potential issues under applicable anti-corruption
laws.

HB Personnel must also ensure that any agents, consultants, or
other intermediaries engaged by HB understand and comply with the CFPOA and
FCPA, and no third party should be engaged by the Company if the third party
engages in, or is suspected of engaging in, bribes, kickbacks, improper
payments, or any other conduct that may violate the CFPOA or FCPA. HB Personnel
should consult with the Companys Legal Department when agents, consultants, or
other intermediaries may interact with foreign government officials.

Penalties for violations of the FCPA are severe and may include
fines against an individual of up to US$250,000 for each violation and fines
against the Company of up to US$2 million. The

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financial consequences of an FCPA violation can escalate
significantly through disgorgement of profits and other penalty enhancers.

In the event that payments are made to third parties on behalf
of governmental entities for legitimate purposes, HB Personnel should closely
monitor such payments for fair valuation of the payments compared to the goods
or services being provided to reduce the risk of kickbacks from the third-party
suppliers to the applicable governmental personnel. HB Personnel should ensure
that any such payments are properly recorded in the applicable business entitys
books and records, including documentation of the specific deliverables
received. HB Personnel may not make or authorize cash or cash equivalent (e.g.,
check) reimbursements or payments of any kind to individual government officials
without prior written authorization from the Companys Legal Department.

Laws of certain countries in respect of anti-bribery and
corruption do not limit the restriction on bribery and improper gifts and
payments to government officials and, accordingly, any bribe, or improper gift
or payment to any third party with the intent to obtain an improper advantage or
to retain business is prohibited.

Facilitation payments are unofficial payments (as opposed to
legitimate and official fees and taxes) made to an individual for the purpose of
securing or accelerating the performance of a service or a routine government
action to which the person or company paying is already entitled. These types of
payments are prohibited.

There are narrow exceptions to the provisions of the FCPA.
Because the legality of payments to government officials in particular
situations is hard to determine, HB Personnel must consult with the Companys
Legal Department before making any such payments to avoid potential liability or
even the appearance of impropriety. Any HB Personnel who has reason to believe
that either the CFPOA or FCPA has been violated should report such conduct as
discussed below and in the Companys Whistleblower Policy.

Government Relations and Political Contributions;
Influencing Testimony

HB Personnel may participate in the political process as
private citizens. HB Personnel may not work on behalf of a candidates campaign
while at work or use the HB Groups facilities for that purpose. It is important
to separate personal political activity from the HB Groups interests, in order
to comply with applicable laws relating to lobbying or attempting to influence
government officials.

All HB Personnel are prohibited from making political
contributions on behalf of any member of the HB Group to any political
candidate, party, organization or other political entity at all levels of
government without the prior written approval of the Companys Chief Executive
Officer.

In addition, HB Personnel are strictly prohibited from
attempting to influence any persons testimony in any manner whatsoever in
courts of justice or any administrative tribunals or other government bodies.

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Directorship

HB Personnel shall not act as directors or officers of any
other corporate entity or organization, public or private, without the prior
written approval of the Chief Executive Officer. Directorships or officerships
with such entities will not be authorized if they are considered to be contrary
to the interest of the HB Group. HB Personnel may, however, act as directors or
officers of charitable organizations whose purposes do not conflict with the HB
Groups interests, and such directorship/officership will not otherwise
interfere with the due performance of the their work.

INFORMATION AND RECORDS

Confidential and Proprietary Information and Trade Secrets

HB Personnel may be exposed to certain information that is
considered confidential by the HB Group or entrusted to the HB Group by persons
with whom the HB Group does business. HB Personnel shall not disclose such
confidential information to persons outside the HB Group, including family
members, and should share it only with other HB Personnel who have a need to
know unless the disclosure is specifically authorized by the Chief Executive
Officer or Head of the Legal group.

Financial Reporting and Records

The HB Group requires honest and accurate recording and
reporting of information to make responsible business decisions. The HB Groups
accounting records are relied upon to produce reports for our management,
directors, shareholders, governmental agencies and persons with whom the HB
Group does business. All of the HB Groups financial statements and the books,
records and accounts on which they are based must appropriately reflect the HB
Groups activities and conform to applicable legal and accounting requirements
and to the HB Groups system of internal controls. Unrecorded or off the books
funds or assets should not be maintained unless required by applicable law or
regulation.

The U.S. FCPAs accounting and internal-controls
(books-and-records) provisions, which require accurate and transparent
accounting records and internal accounting controls sufficient to prevent
improper payments, apply to the Company and to other companies in which the
Company may be considered to have a controlling interest. These accounting,
transparency, and internal-controls requirements are viewed by FCPA enforcers as
bases for strict liability for any improper payment regardless of whether any
knowledge of impropriety can be established regarding the Company.

Accordingly, companies within the HB Group must implement
internal accounting controls based upon sound accounting principles and maintain
and provide to the Company, upon request, accurate documentation regarding all
transactions.

All HB Personnel have a responsibility, within the scope of
their positions, to ensure that the HB Groups accounting records do not contain
any false or intentionally misleading entries. The HB Group does not permit
intentional misclassification of transactions as to accounts, departments or

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accounting records. All transactions must be supported by
accurate documentation in reasonable detail and recorded in the proper accounts
and in the proper accounting period.

Business records and communications often become public through
legal or regulatory proceedings or the media. HB Personnel should avoid
exaggeration, derogatory remarks, guesswork or inappropriate characterizations
that can be misunderstood. This requirement applies equally to communications of
all kinds, including internal and external e-mail, informal notes, internal
memos, and formal reports.

Record Retention

The HB Group maintains all records in accordance with laws,
rules and regulations regarding retention of business records. The HB Group
prohibits the unauthorized destruction of or tampering with any records, whether
written or in electronic form, where the HB Group is required by laws, rules or
regulations to maintain such records or where it has reason to know of a
threatened or pending government investigation or litigation relating to such
records.

COMPANY ASSETS

Use of Company Property

All HB Personnel should endeavor to protect the HB Groups
assets and ensure their efficient use. The HB Groups assets (such as funds,
products or proprietary information) may be used only for legitimate business
purposes. Theft, carelessness, and waste have a direct impact on the HB Groups
profitability. Any suspected incident of fraud or theft should be reported
immediately to your department head or the head of the Legal group for
investigation. Any employee theft or fraud will result in immediate termination
of the responsible employee. In such circumstances, management reserves the
right to seek criminal prosecution or pursue civil charges where appropriate
based on the nature of the offending behavior.

Information Technology

The HB Groups information technology systems, including
computers, e-mail, intranet and internet access, telephones and voice mail are
the property of the HB Group and are to be used primarily for business purposes
in compliance with the Companys Information Technology Policy.

Electronic documents and messages (including voice-mail, e-mail
and SMS) sent, received, created or modified by HB Personnel are considered HB
Group property and HB Personnel should recognize that they are not personal or
private. Unless prohibited by law, the Company reserves the right to access
and disclose (both internally and externally) electronic documents and messages,
as well as, to specify, configure and restrict its electronic systems as
necessary for its business purposes. HB Personnel should use good judgment and
not access, send messages or store any information that they would not want to
be seen or heard by others.

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WORKPLACE AND BUSINESS PRACTICES

A Nondiscriminatory and Harrassment-Free Workplace

The HB Group fosters a work environment in which all
individuals are treated with respect and dignity. The HB Group is an equal
opportunity employer and does not discriminate against HB Personnel or potential
employees, officers or directors on the basis of race, color, religion, sex,
national origin, age, sexual orientation or disability or any other category
protected by applicable laws The HB Group is committed to actions and policies
to assure fair employment and will not tolerate discrimination by HB Personnel.

The HB Group will not tolerate harassment of HB Personnel,
customers or suppliers in any form.

Sexual Harassment

Sexual harassment is illegal and all HB Personnel are
prohibited from engaging in any form of sexually harassing behavior. Sexual
harassment means unwelcome sexual conduct, either visual, verbal or physical,
and may include, but is not limited to, unwanted sexual advances; unwanted
touching and suggestive touching, language of a sexual nature, telling sexual
jokes, innuendoes, suggestions, suggestive looks and displaying sexually
suggestive visual materials.

Substance Abuse

The HB Group is committed to maintaining a safe and healthy
work environment free of substance abuse. HB Personnel are expected to perform
their responsibilities in a professional manner and, to the degree that job
performance or judgment may be hindered, be free from the effects of drugs
and/or alcohol.

Workplace Violence

The workplace must be free from violent behavior. Threatening,
intimidating or aggressive behavior, as well as bullying, subjecting to ridicule
or other similar behavior toward fellow employees or others in the workplace
will not be tolerated.

Employment of Family Members

Employment of more than one family member at an HB Group office
or other premises is permissible provided that the hiring of a family member
must be approved by the head of the applicable business unit or the Chief
Operating Officer. The employment of a family member or any other personal
relationship between HB Personnel must not create a situation where there is
preferential treatment or that might improperly influence sound, objective
business decisions in compliance with applicable Company policies and internal
controls. For purposes of this paragraph, family member means an individuals
spouse, parent, child, sibling, mother- or father-in-law, brother- or
sister-in-law and anyone who shares the individuals home.

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Health and Safety

The HB Group is committed to providing a healthy and safe
workplace in compliance with applicable laws. HB Personnel must be aware of the
safety issues and policies that affect their job, other HB Personnel and the
community in general.

Environment

The Company is committed to protecting the environment and
undertakes to do business in an environmentally responsible and sustainable
manner. HB Personnel must observe all environmental laws and Company policies
that apply to them and their business unit.

Fair Business Practices

All HB Personnel must engage in fair and competitive business
practices which are compliance with applicable anti-trust and competition law in
the jurisdictions in which we do business.

Human Rights Policy

The Company has adopted a Human Rights Policy that sets forth
the HB Groups commitment to protecting human rights through ethical business
practices, fair labour practices, community participation, and security measures
that respect human rights.

WAIVERS OF THE CODE

Any waiver of this Code for directors or members of senior
management (Vice President and above) may be made only by the Board of Directors
(or a committee of the Board of Directors to whom that authority has been
delegated) and will be disclosed promptly2 if required by law or
stock exchange regulation, including the filing of a material change report
describing the date of waiver, the parties involved, the reasons of the Board of
Directors for approving the waiver or not sanctioning the respective departure
and any measures taken by the Board of Directors to address the situation.
Waivers for other HB Personnel may be provided by the Chief Executive Officer.

REPORTING ANY ILLEGAL OR UNETHICAL BEHAVIOR

HB Personnel are encouraged to talk to their supervisors,
department head or other appropriate personnel about observed illegal or
unethical behavior and about the best course of action in a particular
situation. It is the policy of the HB Group not to allow retaliation for reports
of misconduct by others made in good faith. It is, at the same time,
unacceptable to file a report knowing that it is false. All HB Personnel are
expected to cooperate in internal investigations of misconduct.

_______________________________

|2 | The Canadian Securities Administrators consider that
      conduct of directors or executive officers that constitutes a material
      departure from the Code, whether or not sanctioned by the Board of
      Directors, will likely constitute a material change (which would require
      the Company to issue a press release forthwith and to file a material
      change report within ten days of the change).
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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Procedures for the confidential and anonymous reporting of
complaints concerning accounting, internal accounting control and auditing
matters are provided in the Companys Whistleblower Policy.

COMPLIANCE PROCEDURES

HB Personnel must endeavour to ensure prompt and consistent
action against violations of this Code. As situations that arise may not be
clear cut the following steps provide an approach a new situations that may
raise issues associated :

| | Make sure you have all the facts.In order to
      reach the right solutions, we must be as fully informed as possible.                                                                                                                                                                                                     
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                                                                                                                                                             
| | Ask yourself: What specifically am I being asked to do
      and does it seem unethical or improper?Use your judgment and
      common sense - if something seems unethical or improper, it probably is.                                                                                                                    
|  |                                                                                                                                                                                                                                                                                                                             
| | Discuss the problem with your supervisor, department
      head or Head of the Legal group.                                                                                                                                                                                                                                 
|  |                                                                                                                                                                                                                                                                                                                             
| | You may report ethical violations in confidence and
      without fear of retaliation.If your situation requires that your
      identity be kept secret, your anonymity will be protected. The HB Group
      does not permit retaliation of any kind against employees for good faith
      reports of ethical violations.
|  |                                                                                                                                                                                                                                                                                                                             
| | Always ask first, act later:If you are unsure of
      what to do in any situation, seek guidance before you act.                                                                                                                                                                                                           

APPLICABLE LAW

The provisions of this Code of Business Conduct and Ethics will
be modified, as and to the extent necessary, to comply with applicable laws,
regulations or policies imposed by the various jurisdictions in which the HB
Group and HB Personnel operate.

As in effect March 2016

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