Canadian firm Hudbay Minerals is reportedly in discussions to buy Mantos Copper, a Chilean mining company backed by Audley Capital Advisors and Orion Mine Finance.

Hudbay, which is valued at C$1.6bn, is in advanced talks to acquire Mantos in a deal that is reported to be valued at around C$1bn ($780m), according to Bloomberg.

Mantos is looking for takeover offers in an effort to fund expansion plans for its mines in northern Chile. The company noted that its Mantoverde mine will require a $780m investment to enable it to have average annual production of 106,000 metric tonnes of copper and 33,000oz of gold.

A further $210m is required to proceed with the company’s Mantos Blancos expansion plan, which envisages expanding the mine’s life through to 2035.

The company announced in May this year that it is working with Bank of Nova Scotia to evaluate ‘the full range of strategic alternatives’.

In response to the speculation, Hudbay Minerals issued a statement that read: “While the company’s policy is to avoid comment on speculation and rumours, Hudbay emphasises that it has had a consistent strategy of optimising the value of its current operations and evaluating growth opportunities that are complementary to its current business and that it continues to adhere to this strategy.”

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“Hudbay has a consistent strategy of optimising the value of its current operations and evaluating growth opportunities.”

The company further added that its strategy may include acquisitions that fit its “stringent criteria, ranging from early stage exploration to producing mines, provided they are accretive to shareholder value on a per share basis.”

However, according to Bloomberg, Canadian private equity firm Waterton Global Resource Management, which is one of Hudbay’s largest shareholders with a 4.8% stake, has asked the company not to pursue any new acquisitions and rather focus on improving the operations of its existing assets.

Hudbay has zinc and copper operations in Canada’s Manitoba province and Peru.

The company’s precious metals production guidance for this year stands at 170,000oz-215,000oz, as revealed by the company in May this year.