TORONTO, ONTARIO, Feb 27, 2009 (Marketwire via COMTEX News Network)
-- HudBay Minerals Inc. ("HudBay", "the company") (TSX:HBM) announces
that its lenders have refused to renew an $80 million credit facility
that is due to expire February 28, 2009. The facility is currently
undrawn, and HudBay continues to have a strong balance sheet with $686
million in cash on hand at February 25, 2009 and no indebtedness.
The
lenders have advised that their decision to not renew the facility was
caused by SRM Global Master Fund Limited Partnership's ("SRM")
requisition of the upcoming meeting on March 25, 2009 of HudBay
shareholders to consider the removal the board of directors of HudBay
and replacing them with a slate nominated by SRM. The lenders noted the
uncertainty regarding the future direction of HudBay, and expressed
concern that a new board may distribute much of HudBay's cash
balances to shareholders rather than maintain them for ongoing
development.
SRM has made repeated requests to HudBay's management that HudBay
utilize its cash balances to conduct a major share repurchase program.
"It
is clear that the uncertainty regarding SRM's intentions is already
affecting HudBay Minerals," said Allen J. Palmiere, the company's chief
executive officer. "HudBay remains financially strong given our cash
balances, and the expiry of our credit facility is not expected to
impact the strategy of the current board and management. However, we
believe that SRM's proposed strategy of spending cash on a major share
repurchase program would be misguided and not in the best interests of
HudBay or its shareholders."
HudBay Minerals Inc.: Strength to Build the Future
HudBay
Minerals Inc. (TSX:HBM) is a Canadian integrated mining company with
assets in North and Central America principally focused on the
discovery, production and
marketing of base metals. The company's objective is to increase
shareholder value through efficient operations, organic growth and
accretive acquisitions, all while maintaining its financial strength. A
member of the S&P/TSX Composite Index and the S&P/TSX Global
Mining Index, HudBay Minerals is committed to high standards of
corporate governance and sustainability.
Forward Looking Information
This
news release contains "forward-looking information" within the meaning
of applicable securities laws. Forward-looking information includes but
is not limited to information concerning the credit facility, the
intentions of SRM, and the strategy and intentions of HudBay and its
board of directors. 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",
"understands" or "does not anticipate", or "believes" or variations of
such words and phrases or statements that certain actions, events or
results "will", "may", "could", "would", "might", or "will be taken",
"occur", or "be achieved". Forward-looking information is based on the
views, opinions, intentions and estimates of management at the date the
information is made, and is based on a number of assumptions and subject
to a variety of risks and uncertainties and other factors that could
cause actual events or results to differ materially from those
anticipated or projected in the forward-looking information (including
the actions of other parties who have agreed to do certain things and
the approval of certain regulatory bodies).
Many of these
assumptions are based on factors and events that are not within the
control of HudBay and there is no assurance they will prove to be
correct. Factors that could cause actual results or events to vary
materially from results or events anticipated by such forward-looking
information include court and/or other regulatory approval, action by an
intervening party or parties, future agreements reached with third
parties, changes in market conditions, variations in ore grade or
recovery rates, risks relating to international operations, fluctuating
metal prices and currency exchange rates, changes in project parameters,
the possibility of project cost overruns or unanticipated costs and
expenses, labour disputes and other risks of the mining industry,
failure of plant, equipment or processes to operate as anticipated as
well as those risk factors discussed in the Annual Information Form for
the year ended December 31, 2007, and as contained in the Management
Discussion and Analysis for the three and nine month period ended
September 30, 2008, which risks may cause actual results to differ
materially from any forward-looking statement.
Although HudBay
has attempted to identify important factors that could cause actual
actions, events or results to differ materially from those described in
forward-looking information, there may be other factors that cause
actions, events or results not to be anticipated, estimated or intended.
There can be no assurance that forward-looking information will prove
to be accurate, as actual results and future events could differ
materially from those anticipated in such information. HudBay undertakes
no obligation to update forward-looking information if circumstances or
management's estimates or opinions should change except as required by
applicable securities laws. The reader is cautioned not to place
undue reliance on forward-looking information.
This news release
and the information contained herein does not constitute an offer of
securities for sale in the United States and securities may not be
offered or sold in the United States absent registration or exemption
from registration.
For full details of HudBay Minerals' position on the proposal to replace the current Board of Directors, please visit www.hudbayminerals.com/strongfuture.
(HBM-G)
(HBM-P)
SOURCE: HudBay Minerals Inc.
HudBay Minerals Inc.
Annemarie Brissenden
Manager, Investor Relations
(416) 362-0615
Email: annemarie.brissenden@hudbayminerals.com
Website: www.hudbayminerals.com
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