Canadian miner Hudbay Minerals has agreed to acquire peer Copper Mountain Mining Corp (CMMC) in a $439m all-share deal to boost its copper portfolio.
The transaction will result in the creation of a premier Americas-focused copper producer and Canada’s third-largest copper producer.
The combined company will hold long-life mines and a pipeline of organic copper growth projects. Its assets are located in tier-one mining-friendly jurisdictions of Canada, Peru and the US.
Under the arrangement agreement, Copper Mountain shareholders will receive 0.381 of a Hudbay common share for each share held in the company.
The transaction values each share of Copper Mountain at C$2.67.
Upon closing of the transaction, existing Hudbay and Copper Mountain shareholders will respectively own 76% and 24% of Hudbay.
Hudbay president and CEO Peter Kukielski said: “We estimate that this combination could unlock $30m per year in operating efficiencies and corporate synergies, and it is accretive to Hudbay’s key per share metrics.
“With an expanded copper production profile, a low-cost position on the copper curve and an enviable copper growth pipeline, the combined company is expected to generate robust cash flow through the cycle and achieve attractive returns by efficiently allocating capital to the highest risk-adjusted return opportunities in the combined project portfolio.”
The transaction is anticipated to close in late Q2 or early Q3 of this year.
Copper Mountain board of directors’ chair Edward Dowling said: “This transaction provides Copper Mountain shareholders with an attractive premium and the opportunity to participate in a more diversified portfolio of three operating assets and a leading organic copper growth pipeline.”