The Transaction
The Transaction will create a premier
Under the terms of the Transaction, each Copper Mountain shareholder will receive 0.381 of a Hudbay common share for each Copper Mountain common share held, representing a 23% premium to Copper Mountain shareholders based on Hudbay’s and Copper Mountain’s 10-day volume-weighted-average share prices on
Board of Directors’ Recommendations and Key Stakeholder Support
The Board of Directors of each of Hudbay and Copper Mountain unanimously approved the Transaction and recommend that each of their respective shareholders vote “FOR” the Transaction.
Zeta Resources Limited, the largest shareholder of Copper Mountain, holding 21,359,745ii Copper Mountain shares representing approximately 9.96% ownership of Copper Mountain on a non-diluted basis, intends to vote in favour of the Transaction.
Strategic Rationale of the Transaction
The combination of Hudbay and Copper Mountain is on-strategy with strong industrial logic that will offer both sets of shareholders compelling benefits, as highlighted below:
- Scale – A larger-scale platform with three long-life operating mines with exploration and expansion upside, three large-scale development projects and one of the largest mineral resource bases among intermediate copper producers;
- Diversification – A geographically balanced portfolio in tier-one mining jurisdictions with approximately 55% of net asset valueiv (“NAV”) estimated to be from North American assets and 45% of NAV estimated to be from South American assets;
- Copper-Focused – A copper-focused portfolio with expected 2023 copper production of more than 150,000 tonnes in the second quartile position on the copper cost curve,v complemented by meaningful gold production;
- Efficiencies – An estimated
US$30 million per year of operating efficiencies and corporate synergies after three years, including approximatelyUS$20 million per year from operating cost reductions through the application of Hudbay’s operating efficiency practices to the Copper Mountain mine; - Deleveraging – Well-positioned for accelerated deleveraging in the near-term from increased diversification of cash flows and enhanced exposure to rising copper prices;
- Capital Allocation – An ability to maximize value from a larger organic growth pipeline by more efficiently allocating capital to projects that yield the highest risk-adjusted returns; the combined company’s greater cash flow generation and strong balance sheet will enhance the ability to advance brownfield expansion opportunities and prudently develop Hudbay’s
Copper World project inArizona , which will deliver meaningful growth to the combined company; and - Valuation Re-rating Potential – The strategic and financial benefits from the Transaction ultimately position the combined company for a valuation re-rating.
Additional details with respect to the reasons for the Transaction as well as its potential benefits and risks are described in the Meeting Materials, which Hudbay and Copper Mountain shareholders are urged to read in their entirety.
The Meetings
Hudbay Meeting: The Hudbay meeting will be held on
Copper Mountain Meeting:
Mailing of the Meeting Materials is in process and shareholders of Hudbay and Copper Mountain should expect to receive their respective Meeting Materials shortly. Hudbay and Copper Mountain shareholders are encouraged to read the Meeting Materials carefully and in their entirety. The Meeting Materials are also available on SEDAR under each company’s profile at www.sedar.com, under Hudbay’s profile on EDGAR at www.sec.gov, under Copper Mountain’s profile on the ASX at www.asx.com.au, on Hudbay’s website at www. https://www.hudbayminerals.com and on Copper Mountain’s website at www.cumtn.com.
Shareholder Questions and Assistance
Hudbay Shareholders: If you have any questions or need assistance voting, you can contact
Copper Mountain Shareholders: If you have any questions or need assistance voting, you can contact
About
Hudbay (TSX, NYSE: HBM) is a diversified mining company with long-life assets in
About
Copper Mountain owns 75% of the
Forward-Looking Information
This release contains certain “forward looking statements” and certain “forward-looking information” as defined under applicable Canadian and
Forward-looking statements relate to future events or future performance and reflect Hudbay’s and Copper Mountain’s expectations or beliefs regarding future events. Forward-looking statements include, but are not limited to statements with respect to the consummation and timing of the Transaction; timing for the delivery of the Meeting Materials; approval by shareholders of Hudbay and Copper Mountain; the satisfaction of the conditions precedent to the Transaction; the strengths, characteristics and potential of the Transaction; growth potential and expectations regarding the timing, receipt and anticipated effects of court and other consents and approvals; non-withdrawal of regulatory approvals; the impact of the Transaction on shareholders of Hudbay and Copper Mountain and other stakeholders and other anticipated benefits of the Transaction. By their very nature, forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, amongst others, risks related to failure to receive approval by shareholders of Hudbay and Copper Mountain, the required court and other consents and approvals to effect the Transaction, the potential of a third party making a superior proposal to the Transaction, the possibility that the definitive arrangement agreement could be terminated under certain circumstances.
Forward-looking information are based on management of the parties' reasonable assumptions, estimates, expectations, analyses and opinions, which are based on such management's experience and perception of trends, current conditions and expected developments, and other factors that management believes are relevant and reasonable in the circumstances, but which may prove to be incorrect. Such factors, among other things, include: business integration risks; fluctuations in general macroeconomic conditions; fluctuations in securities markets; fluctuations in spot and forward prices of copper or certain other commodities; change in national and local governments, legislation, taxation, controls, regulations and political or economic developments; risks and hazards associated with the business of mineral exploration, development and mining (including environmental hazards, industrial accidents, unusual or unexpected formations pressures, cave-ins and flooding); discrepancies between actual and estimated metallurgical recoveries; inability to obtain adequate insurance to cover risks and hazards; the presence of laws and regulations that may impose restrictions on mining; employee relations; relationships with and claims by local communities and indigenous populations; availability of increasing costs associated with mining inputs and labour; the speculative nature of mineral exploration and development (including the risks of obtaining necessary licenses, permits and approvals from government authorities); and title to properties.
Hudbay and Copper Mountain undertake no obligation to update forward-looking information except as required by applicable law. Such forward-looking information represents management's best judgment based on the information currently available. No forward-looking statement can be guaranteed and actual future results may vary materially. Accordingly, readers are advised not to place undue reliance on forward-looking statements or information.
For investor and media inquiries, please contact:
Hudbay
Candace Brûlé
Vice President, Investor Relations
(416) 814-4387
candace.brule@hudbay.com
Copper Mountain
Director, Investor Relations and Corporate Communications
(604) 682-2992
Tom.Halton@CuMtn.com
i Sourced from company filings and
ii Sourced from Zeta Resources Limited’s SEDI filing reflecting holdings as of
iii Sourced from GMT Capital Corp.’s EDGAR filing reflecting holdings as of
iv NAV is based on analyst consensus estimates at Transaction announcement on
v Based on Wood Mackenzie’s 2023 by-product C1 copper cost curve (Q4 2022 dataset).
Source:
2023 GlobeNewswire, Inc., source