Toronto, Ontario, December 9, 2008 - HudBay Minerals Inc.
(TSX: HBM) ("HudBay") has posted on its website a governance
presentation that responds to certain shareholders' concerns relating to
the company's proposed acquisition of Lundin Mining Corporation
("Lundin"). The presentation is available at www.hudbayminerals.com.
Among the highlights of the presentation are the following facts respecting the proposed acquisition of Lundin:
- HudBay's independent directors concluded the acquisition is
value-enhancing for the company's shareholders after carefully reviewing
HudBay's current fiscal position and the opportunities presented by the
acquisition of Lundin.
-
The two HudBay directors who also serve on the board of Lundin
did not participate in or attend any meetings where the Lundin
acquisition was discussed.
-
There will be no change of control of HudBay as a result of the
acquisition of Lundin. Allen J. Palmiere will remain HudBay's CEO, six
of the nine members of HudBay's board will remain directors of HudBay
following the acquisition, and the company does not expect any single
shareholder will own more than 10% of the shares of HudBay following the
closing of the acquisition.
-
The C$135 million loan proposed to be made to Lundin is a
bridge to the C$135 million private placement contemplated by the
subscription agreement between HudBay and Lundin pending regulatory
approval of the private placement. In agreeing to the loan, HudBay
carefully considered Lundin's financial position and Lundin's possible
alternatives to the proposed arrangement with HudBay, including the
possibility of Lundin selling assets with strategic value to HudBay and
the possibility of Lundin engaging in a combination transaction with a
competitor to HudBay.
-
The exchange ratio for Lundin's shares was determined through
arm's length negotiation and involved the consideration of a number of
factors, including the fundamental values of Lundin's assets compared to
that of HudBay's assets, the recent trading prices for shares of HudBay
and Lundin, the current instability in the stock and financial markets,
and the possibility of Lundin seeking an alternative to a transaction
with HudBay.
-
The independent directors carefully considered whether a
meeting of HudBay shareholders should be called to approve the
acquisition, but concluded on the information and advice provided to
them that there was no legal, regulatory or corporate requirement to
conduct a vote, and to do so would not allow HudBay to offer Lundin
sufficient certainty that the acquisition would be completed, a
condition precedent in the negotiation of the acquisition.
HudBay remains committed to completing the acquisition. The company has
consistently communicated to its shareholders its intention to create
value by building scale and scope through opportunistic investments that
complement its existing operations.
HudBay encourages shareholders to refer to the websites of HudBay (www.hudbayminerals.com) and Lundin (www.lundinmining.com) for accurate, factual information about their respective operations and the proposed acquisition and the loan to Lundin.
ABOUT HUDBAY MINERALS INC.
HudBay is a leading base metals mining company with assets in North
and Central America. The company is investing for the future in one of
the most ambitious exploration programs in Canada, targeting its 400,000
hectare exploration territory in the Flin Flon Greenstone Belt. An
integrated mining company, HudBay operates zinc and copper mines,
concentrators and metal production facilities in northern Manitoba and
Saskatchewan, a zinc oxide production facility in Ontario, the White
Pine Copper Refinery in Michigan, and owns the Fenix nickel project in
Guatemala. In addition to its primary products, the Company also
produces gold, silver and zinc oxide. HudBay is a member of the
S&P/TSX Composite Index and the S&P/TSX Global Mining Index.
For further information, please contact:
HudBay Minerals Inc.
Annemarie Brissenden
Manager, Investor Relations
(416) 362-0615
Email: annemarie.brissenden@hudbayminerals.com
Website: www.hudbayminerals.com