Hudbay Minerals has signed an agreement with Norsemont Mining to acquire the outstanding common shares of Norsemont by way of a formal takeover bid.

The transaction value is estimated to be around $250m with HudBay purchasing Norsemont’s shares at $4.65 a share.

Norsemont owns 100% of the Constancia copper project in southern Peru, which is expected to produce 172 million pounds of copper per annum and two million pounds of molybdenum in concentrate over 15 years.

HudBay president and CEO David Garofalo said bringing Constancia into operation will significantly increase the company’s copper production and contribute to its precious metals production growth.

“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,” Garofalo said.