WINNIPEG, MANITOBA, Aug 7, 2007 (CCNMatthews via COMTEX News Network) --
HudBay Minerals Inc. (TSX:HBM) (HudBay) today announced it has
entered into an option agreement with VMS Ventures Inc. (VMS) that
provides VMS with the potential to earn a 100% interest in a HudBay
property in the Reed Lake area of the Flin Flon Greenstone Belt, near
Snow Lake, Manitoba.
The property comprises Claim Block CB 5503 (377 hectares) and Claim Block FRE 5030 (196 hectares).
"This
agreement provides HudBay further leverage to our exploration spending
beyond the $45 million we have earmarked for 2007," said Peter Jones,
President and Chief Executive Officer. "If VMS makes a significant
discovery, HudBay can earn a majority interest in the property through
back-in rights."
Under the agreement, VMS, a Vancouver-based
mineral exploration company, is required to make cash payments of
$55,000 to HudBay and incur exploration expenditures of $300,000 over a
three-year term. Upon exercise of the option by VMS to fully acquire the
property, HudBay retains a 2% net smelter return royalty. As an
alternative to the royalty, HudBay may elect to exercise successive
back-in rights. If all these rights are exercised over time, it enables
the company to retain up to a 70% interest in the property by making
certain exploration expenditures, a one-time cash payment of $1.5
million and bringing the property to commercial production.
With
the VMS agreement, HudBay now has option agreements in place with four
mineral exploration companies in the Flin Flon Greenstone Belt where the
company holds approximately 400,000 hectares of exploration lands and
has three underground mines, two ore concentrators as well as
metallurgical plants. Historically, the company has discovered 25 mines
and produced in excess of 150 million ore tonnes from this area.
About HudBay Minerals Inc.
HudBay is an integrated mining
company operating mines, concentrators and a metal production facility
in northern Manitoba and Saskatchewan. HudBay also owns a zinc oxide
production facility in Ontario, the White Pine copper refinery in
Michigan and the Balmat zinc mine operations in New York state. HudBay
is a member of the S&P/TSX Composite Index and a member of the
S&P/TSX Global Mining Index.
(HBM-G)
Forward-Looking Information
This
news release contains "forward-looking information" within the meaning
of applicable Canadian securities legislation. Forward-looking
information includes, but is not limited to, information with respect to
the option agreement entered into with VMS Ventures Inc. Generally,
forward-looking information 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 information is
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 information, including risks
associated with the mining industry such as future commodity prices,
economic factors as they effect exploration and development, government
regulation, environmental risks, success of exploration activities,
permitting time lines, capital expenditures, risks associated with
option
agreements, changes in project parameters as plans continue to be
refined as well as those factors discussed in the section entitled "Risk
Factors" in HudBay's Annual Information Form for the year ended
December 31, 2006, 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 information, there may be other factors that cause
results not to be as anticipated, estimated or intended. There can be no
assurance that such forward-looking information will prove to be
accurate, as actual results and future events could differ materially
from those anticipated in such information. Accordingly, readers should
not place undue reliance on forward-looking information. HudBay does not
undertake to update any forward-looking
information, except in accordance with applicable
securities laws.
SOURCE: HudBay Minerals Inc.
HudBay Minerals Inc.
Brad Woods
Director, Investor Relations
(204) 949-4272
Email: [email protected]
Website: www.hudbayminerals.com
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