WINNIPEG, MANITOBA--(CCNMatthews - July 19, 2006) - HudBay Minerals
Inc. (TSX:HBM) (HudBay) announces that its wholly owned subsidiary,
Hudson Bay Exploration and Development Company Limited (HBED) has
entered into a Letter of Intent (LOI) with Murgor Resources Inc.
(Murgor) whereby HBED would option to Murgor four mineral properties for
purchase. Two large exploration properties are also included in the LOI
whereby joint ventures may be formed between the two companies after
Murgor completes certain exploration expenditures. All six properties
are located in the Flin Flon greenstone belt in northern Manitoba and
Saskatchewan.
The LOI provides that Murgor may acquire a 100%
interest in HBED's Hudvam, Wim, Tyr and Fon mineral properties, which
total 5,368 hectares, after payments of $1.16 million to HBED and
exploration expenditures of $8.05 million, in aggregate, over four
years. HBED would retain a 2% net smelter return (NSR) or have the right
to "buy back" up to a 65% interest in each mineral property.
The
LOI also includes the Snow "H" and Flin "D" exploration properties,
which total 186,104 hectares, including 13,033 hectares of HBED claims.
The LOI specifies that Murgor would be required to undertake aggregate
exploration expenditures of $5.0 million over three years. After
completion of specified expenditures, HBED and Murgor may form joint
ventures related to areas to be designated within each exploration
property. For designated areas, HBED would retain a 2% NSR or would form
a 50% joint venture as well as have the right to "buy back" up to a 65%
interest in each joint venture.
The terms of the LOI remain
subject to entering into definitive agreements and the LOI also
contemplates that each property would be subject to a separate agreement
as well as obtaining the necessary regulatory approvals.
After
the Murgor and Halo Resources Ltd. (previously announced) exploration
agreements, HudBay would directly hold approximately 283,450 hectares in
the Flin Flon greenstone belt and would additionally have optioned
claims to a total of approximately 16,511 hectares.
"The prolific
Flin Flon greenstone belt has produced 26 mines for HudBay over our 76
year history," said Peter Jones, President and CEO of HudBay. "HudBay's
three year, $30 million exploration expenditure together with planned
expenditures by Murgor and Halo Resources Ltd.'s previously announced
plans will enhance the possibility of new orebody discoveries, which, if
successful, could be accretive to HudBay."
About HudBay Minerals Inc.
HudBay
Minerals Inc. is an integrated mining company that operates mines,
concentrators and a metal production complex in northern Manitoba and
Saskatchewan. The company also owns a zinc oxide production facility in
Ontario, the White Pine copper refinery in Michigan, and the Balmat zinc
mine in New York state.
HudBay is a member of the S&P/TSX Composite Index.
Forward Looking Statements
This
news release contains "forward-looking statements", within the meaning
of applicable Canadian securities legislation, concerning the business,
operations and financial performance and condition of HudBay.
Forward-looking statements include, but are not limited to, statements
with respect to the possible option by HudBay to Murgor of certain
properties and related matters and their potential impact on HudBay.
Generally, these forward-looking statements can be identified by the use
of forward-looking terminology such as "plans", "subject to" "expects",
or "does not expect", "is expected", "budget", "scheduled",
"estimates", "forecasts", "intends", "anticipates", or "does not
anticipate", or "believes" or variations of such words and phrases or
state that certain actions, events or results "may", "could", "would",
"might","can be", "will" or "will be taken", "occur", or "be achieved".
Forward-looking statements are subject to known and unknown risks,
uncertainties and other factors that may cause the actual results, level
of activity, performance or achievements of HudBay, to be materially
different from those expressed or implied by such forward-looking
statements, including risks associated with entering into definitive
agreements with Murgor and Murgor's performance thereunder, including
exploration activities and financnial expenditures as well as risks
associated with the mining industry such joint venture operations,
exploration, government regulation, environmental and reclamation risks,
title disputes or claims, success of exploration activities, future
commodity prices, costs of production, possible variations in ore
reserves, resources, grade or recovery rates, failure of plant,
equipment or processes to operate as anticipated, accidents, labour
disputes, delays associated with financing or in the completion of
development or construction activities, the timing and amount of
estimated future production, capital expenditures, financial market
fluctuations, requirements for additional capital, conclusions of
economic evaluations, limitations on insurance coverage, inflation as
well as those factors discussed in the section entitled "Risk Factors"
in HudBay's Annual Information Form for the year ended December 31,
2005, available on www.sedar.com. Although HudBay has attempted to
identify important factors that could cause actual results to differ
materially from those contained in forward-looking statements, there may
be other factors that cause results not to be as anticipated, estimated
or intended. There can be no assurance that such statements will prove
to be accurate, as actual results and future events could differ
materially from those anticipated in such statements. Accordingly,
readers should not place undue reliance on forward-looking statements.
HudBay does not undertake to update any forward-looking statements,
except in accordance with applicable securities laws.
FOR FURTHER INFORMATION PLEASE CONTACT:
HudBay Minerals Inc.
Don Bain
Director, Investor Relations
(204) 949-4272
(204) 942-8177 (FAX)
don.bain@hbms.ca
www.hudbayminerals.com