Hudbay Minerals, a Canadian mining company, has decided to sell 31.6 million of its common shares on a bought deal basis to raise $300m (C$409.83m).

In this regard, an agreement was reached with a syndicate of underwriters led by RBC Capital Markets and BMO Capital Markets, who have also been granted an over-allotment option.

Each common share in Hudbay in this deal is priced at $9.50.

The over-allotment option, which allows the underwriters to buy additional shares, is exercisable within 30 days post-closing of the offering.

This could bring the total funding to $345.2m if fully utilised. The offering is due to close around 24 May 2024, subject to standard closing conditions and regulatory approvals.

The company plans to allocate the net proceeds from the share offering to various strategic initiatives.

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These include expediting pre-stripping activities at its mines and optimising mill operations at Copper Mountain.

Additionally, the company aims to use the proceeds to pay down debt, in line with its “3P” plan, which is pivotal for the decision-making process on the Copper World project.

The funds will also support the assessment of mill throughput enhancements at the Constancia and New Britannia operations. The remaining proceeds are earmarked for general corporate needs.

In March this year, Hudbay signed an option agreement with a Marubeni subsidiary to explore three projects near its processing facilities in Flin Flon, Manitoba, Canada. These three projects are Cuprus-White Lake, Westarm and North Star, all within trucking distance of Flin Flon.

This deal offered Marubeni the option to pick a 20% stake in the projects by investing at least C$12m in exploration over five years.