08:25 | Lima, Jan. 10 (ANDINA).
Canadian-base HudBay Minerals Inc. said it has reached an agreement to acquire Norsemont Mining Inc. in a US$523-million transaction that would give it ownership of the Constancia copper project in the department of Cusco, in southern Peru.
The move also marks another step in HudBay's aggressive acquisition plan with a goal to become a leading mid-tier miner.
Under the offer, Norsemont shareholders would receive 0.26 of a HudBay share and a one-tenth of a cent, or $4.50 in cash, for each share, to a maximum $130-million cash consideration.
That offer represents a 33 per cent premium on the average trading price of Norsemont's shares for the 20 days ended Jan. 7, HudBay said.
HudBay already owns a 1.1 per cent stake in Norsemont, and 34.4 per cent of Norsemont shareholders have already agreed to tender their shares to the bid.
HudBay president and CEO David Garofalo said the company wanted the Constancia project because it is an open-pit mine with low operating costs, has established permits and feasibility studies show a long potential lifespan.
"This is a significant milestone for HudBay as it touches upon a number of key strategic initiatives and helps us establish a new growth platform in Peru, a prolific copper region," Garofalo told analysts.
He stated this transaction helps solidify HudBay's position as one of the leading mid-tier mining companies with an enhanced growth pipeline in stable, mining-friendly jurisdictions.
"Our reliable operations in low-risk jurisdictions combined with our strong financial position complement our ability to execute a focused growth strategy of acquiring porphyry and VMS deposits with exploration upside in the Americas."
He added that bringing Constancia into operation will significantly increase HudBay's copper production and contribute to HudBay's precious metals production growth.
"In addition, this acquisition is expected to increase our mineral exposure on a per share basis, and deliver per share growth in net asset value and long term earnings and cash flow," added Garofalo.
"Our offer permits Norsemont's shareholders to continue to participate in the development of the Constancia project with the added benefit of exposure to HudBay's profitable operations and world class Lalor development project."
HudBay said the acquisition is expected to help boost its copper production by about 145 per cent between 2011 and 2016, as it brings the Constancia mine to full production.
Chief Executive Officer of Norsemont Patrick Evans said HudBay is well placed to accelerate the development of the Constancia project far sooner than Norsemont could have achieved independently.
"The HudBay offer provides Norsemont shareholders with an attractive opportunity to continue to participate in Constancia's success without the dilution that the independent funding of Constancia's development would have required."
"Besides presenting Norsemont shareholders with an exciting diversification and growth opportunity, Peru will benefit significantly through HudBay's participation in that country's well-established and rapidly growing mining industry," stated Evans.
He added HudBay is a highly respected mining company with a long record of more than 80 years of successful base metals mining and processing operations in Canada.
The Constancia mine currently has about 5.5 billion pounds of copper equivalent, but some predict it could actually be as high as 7.5 billion.
The property is located approximately 600km southeast of Lima, within the emerging Yauri-Andahuaylas metallogenic belt, hosting several large copper-gold-molybdenum porphyry deposits including Antapaccay (Xstrata) and Los Chancas (Grupo Mexico), as well as copper skarn deposits including Tintaya (Xstrata) and Las Bambas (Xstrata).
It is accessed by several roads, and is within 60km of a railroad. Elevation ranges from 4,000 to 4,700m, and several small permanently flowing rivers are present in the area.
HudBay Minerals Inc. is a Canadian integrated mining company with assets in North and Central America principally focused on the discovery, production and marketing of base metals.
The company’s objective is to increase shareholder value through efficient operations, organic growth and accretive acquisitions, all while maintaining its financial strength. A member of the S&P/TSX Composite Index and the S&P/TSX Global Mining Index, HudBay Minerals is committed to high standards of corporate governance and sustainability.
The integrated base metals mining, metallurgical processing and refining company has a variety of assets that include zinc and copper mines, concentrators and metal production facilities in northern Manitoba and Saskatchewan.
It also owns a zinc oxide production facility in Ontario, a copper refinery in Michigan and a nickel project in Guatemala.
The company has been building its industry position over the past few years with a series of acquisitions, most recently of a 14.15 per cent stake in MacDonald Mines Exploration Ltd. (TSXV:BMK) last fall. It also listed on the New York Stock Exchange in October.
(END) EEP/LVT
Publicado: 10/1/2011