Toronto, Ontario, August 23, 2010 - HudBay Minerals Inc. ("HudBay", the "company") (TSX: HBM)
announced that it has entered into a subscription agreement with
Augusta Resource Corporation ("Augusta") (TSX/NYSE Amex: AZC) providing
for the sale to HudBay on a private placement basis of 10,905,590 Units
for a purchase price of C$2.75 per Unit for total consideration of
C$29,990,372. Each Unit consists of one common share of Augusta and
one-half of one common share purchase warrant of Augusta (the
"Warrants"). Each whole Warrant will entitle HudBay to acquire one
common share of Augusta at an exercise price of C$3.90 at any time
during the 18 months following closing of the transaction (subject to
early expiry of the Warrants in certain circumstances).
Upon closing of the subscription, which is subject to certain
customary conditions including approval of the listing of the common
shares to be issued to HudBay, HudBay will own and have control over
14,789,490 common shares of Augusta (approximately 11.0% of the issued
and outstanding common shares), and will own 5,452,795 Warrants (100% of
the outstanding Warrants) (representing approximately 13.6% of the
issued and outstanding common shares of Augusta on a fully-diluted
basis). Pursuant to the subscription agreement, Augusta has granted to
HudBay the right to participate in future equity financings that might
be undertaken by Augusta in the 24 months following closing of the
transaction on a basis that would permit HudBay to maintain its then
current percentage equity ownership of Augusta.
The acquisition of the common shares and Warrants of Augusta was made
to assist Augusta in the financing of the development of the Rosemont
project. HudBay will evaluate the investment in Augusta and may, among
other things, increase or decrease its ownership and possibly pursue
strategic initiatives with or in respect of Augusta depending on factors
including market conditions, the business and prospects of Augusta and
other alternatives available to HudBay from time to time.
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 metals with its corporate
offices at 1 Adelaide Street East, Suite 2500, Toronto, Ontario. The
company's objective is to maximize shareholder value through efficient
operations, organic growth and accretive acquisitions, while maintaining
its financial strength. A member of the S&P/TSX Composite Index and
the S&P/TSX Global Mining Index, HudBay is committed to high
standards of corporate governance and sustainability.
Forward-Looking Information
Certain of the statements made and information contained herein may
contain forward-looking statements within the meaning of the United
States Private Securities Litigation Reform Act of 1995 and
forward-looking information within the meaning of applicable Canadian
securities laws. Forward-looking information includes, but is not
limited to, information concerning the anticipated closing of the
transaction contemplated by the subscription agreement referred to in
the news release and HudBay's future intentions with respect to its
investment in Augusta. 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. 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, or to comment on analyses, expectations or
statements made by third parties in respect of HudBay, its financial or
operating results or its securities. The reader is cautioned not to
place undue reliance on forward-looking information.
This news release does not constitute an offer to sell or a
solicitation of an offer to buy any of the securities in the United
States, nor shall there be any sale of securities in any state in which
such offer, solicitation or sale would be unlawful. The securities,
including the common shares to be issued upon the exercise of the
Warrants, have not been and will not be registered under the United
States Securities Act of 1933, as amended (the "1933 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 (as defined in
Regulation S under the 1933 Act) absent such registration or an
applicable exemption from such registration requirements.
NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES
(HBM-G)
For further information, please contact:
HudBay Minerals Inc.
John Vincic
Vice President, Investor Relations and Corporate Communications
(416) 362 0615
Email: john.vincic@hudbayminerals.com
www.hudbayminerals.com