WINNIPEG, MANITOBA--(CCNMatthews - June 1, 2006) - HudBay Minerals
Inc. (TSX:HBM) (HudBay) is pleased to announce that its early exercise
warrant transaction was approved by votes of more than 98% in favour at
meetings held today of its share and warrantholders.
The 30-day
period for the early exercise of HudBay's publicly-traded warrants will
commence at 9:00 a.m. (Toronto time) on Monday, June 5, 2006 and will
expire at 5:00 p.m. (Toronto time) on Wednesday, July 5, 2006.
Assuming
that all of the warrants are exercised during the early exercise
period, the gross proceeds to HudBay will be approximately $107.9
million. The net proceeds from the exercise of the warrants are expected
to be used for general corporate purposes, including potential debt
repayment and future growth opportunities.
Registered holders of
warrants are encouraged to exercise their warrants in accordance with
the procedures set forth in the notice to warrantholders (the
"Warrantholder Notice") accompanying the management information circular
dated May 4, 2006 (the "Circular") with respect to the extraordinary
meeting of warrantholders of HudBay held today (as described below) as
soon as possible and, in any event, prior to 5:00 p.m. (Toronto time) on
Wednesday, July 5, 2006 in order to acquire 0.002 of a common share of
HudBay in addition to the 0.0333 of a common share of HudBay issuable
upon exercise of each warrant.
Non-registered holders of
warrants, whose warrants are registered in the name of a brokerage firm,
bank or trust company or other intermediary, should contact their
intermediaries for instructions on how to exercise their warrants.
Registered
holders of warrants may exercise their rights to acquire the
above-noted common shares by surrendering the certificates representing
their warrants to Equity Transfer Services Inc. at any time prior to
5:00 p.m. (Toronto time) on Wednesday, July 5, 2006, by hand, courier or
registered mail at its offices located at 120 Adelaide Street West,
Suite 420, Toronto, Ontario M5H 4C3.
The warrant certificate must be submitted together with:
(i)
a duly completed and executed subscription, in the form attached to the
warrant certificate as Schedule "A" or in the form attached as Schedule
"A" to the Warrantholder Notice accompanying the Circular, specifying
the number of warrants that the holder intends to exercise;
(ii)
in the case of U.S. warrantholders only, a duly completed and executed
U.S. representation letter in the form attached as Schedule "B" to the
warrant indenture (the "Warrant Indenture") dated as of December 21,
2004 between HudBay and Equity Transfer Services Inc. or in the form
attached as Schedule "B" to the Warrantholder Notice accompanying the
Circular; and
(iii) a certified cheque, bank draft or money
order in Canadian dollars, payable to or to the order of HudBay in an
amount equal to the exercise price of $0.105 per 0.0333 of one common
share multiplied by the number of warrants that the holder intends to
exercise.
If not less than 66 ?% of the Warrants outstanding as
of the commencement of the early exercise period on Monday, June 5, 2006
are exercised during the early exercise period, each warrant that has
not been exercised by 5:00 p.m. (Toronto time) on Wednesday, July 5,
2006 (except as provided in the paragraph immediately below) shall be
automatically exchanged, without any further action on the part of the
warrantholder, including payment of the exercise price or any other
additional consideration, for a fraction of a common share equal to (a)
0.0333 (being the total number of common shares issued upon the exercise
of each warrant outside of the early exercise period) plus (b) 0.002
multiplied by 50% (being one half of the inducement of 0.002 of one
common share per warrant) minus ©
$0.105 divided by the lesser of (i) the volume weighted average trading
price of the common shares on the Toronto Stock Exchange for the five
trading days ending on July 5, 2006, and (ii) the closing price of the
common shares on July 5, 2006.
U.S. Warrantholders
The
common shares to be issued upon exercise of or exchange for warrants
have not been and will not be registered under the U.S. Securities Act
of 1933, as amended (the "U.S. Securities Act") or any state securities
laws and may not be offered or sold within the United States or to, or
for the account or benefit of, U.S. persons unless registered under the
U.S. Securities Act and applicable state securities laws or an exemption
therefrom is available. Notwithstanding the foregoing, a warrantholder
who is in the United States or who holds a warrant for the account or
benefit of a U.S. person must be an "Institutional Accredited Investor"
(an "Accredited Investor", as defined in Rule 501(a) of Regulation D
under the U.S. Securities Act, that satisfies the requirements of Rule
501(a)(1), (2), (3) or (7)) and must deliver the subscription form and
representation letter required by the Warrant Indenture by July 5, 2006
in order to exercise their warrants and receive common shares or to have
their warrants exchanged for common shares. Any such warrantholder who
does not comply with such requirements will not be permitted to exercise
or exchange their warrants and receive common shares, and their
warrants will remain outstanding following the completion of the
transaction. Further, no warrants beneficially owned by a person in the
United States or held for the account or benefit of a U.S. person may be
exercised through the Canadian Depository for Securities ("CDS") and no
common shares will be exchanged for warrants beneficially owned by such
persons in CDS. All warrants that are beneficially owned by persons in
the United States or U.S. persons must be immediately withdrawn from
CDS.
GMP Securities L.P. and BMO Nesbitt Burns Inc. are acting as financial advisors to the Company with respect to the transaction.
About HudBay
HudBay
Minerals Inc. is an integrated mining and metal producing company that
operates mines and concentrators in northern Manitoba and Saskatchewan
and a metal production complex in Flin Flon, Manitoba. The company also
owns a zinc oxide production facility in Brampton, Ontario, a copper
refinery in Michigan and the Balmat zinc mine in New York state.
If you have any questions or require assistance with the early exercise of warrants, please contact:
KINGSDALE SHAREHOLDER SERVICES INC.
North America Toll-Free Phone: 1-866-588-6864
Outside North America Call Collect: 416-867-2272
E-mail: shareholder@kingsdalecapital.com
This
press release is not an offer of securities for sale in the United
States. The securities have not been and will not be registered under
the United States Securities Act of 1933, as amended. Securities may not
be offered or sold in the United States absent registration or an
exemption from registration.
Cautionary Note Regarding Forward-Looking Statements
This
press 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 future price of zinc, copper, gold and silver, the
estimation of mineral reserves and resources, the realization of mineral
reserve estimates, the timing and amount of estimated future
production, costs of production, capital expenditures, costs and timing
of the development of new deposits, success of exploration activities,
permitting time lines, currency exchange rate fluctuations, requirements
for additional capital, government regulation of mining operations,
environmental risks, unanticipated reclamation expenses, title disputes
or claims, limitations on insurance coverage, increased electricity,
heavy fuel oil and natural gas cost risk, inflation risks and risks
associated with the re-opening of the Balmat mine. Generally, these
forward-looking statements can be identified by the use of
forward-looking terminology such as "plans", "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" 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 but not limited to: risks related to the
integration of acquisitions; risks related to international operations;
risks related to joint venture operations; actual results of current
exploration activities; actual results of current reclamation
activities; conclusions of economic evaluations; changes in project
parameters as plans continue to be refined; future commodity prices;
possible variations in ore reserves, grade or recovery rates; failure of
plant, equipment or processes to operate as anticipated; accidents,
labour disputes and other risks of the mining industry; delays in
obtaining governmental approvals or financing or in the completion of
development or construction activities, 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 that are incorporated by
reference herein, 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