Toronto, Ontario, October 6, 2010 – HudBay Minerals Inc. (“HudBay”,
the “company”) (TSX: HBM) today announced that it
has entered into a subscription agreement with MacDonald Mines
Exploration Ltd. (“MacDonald”) (TSX.V:BMK) providing for the
sale to HudBay on a private placement basis of 19,060,000 units (the
“Units”) of MacDonald at a purchase price of C$0.18 per Unit
for total consideration of C$3,430,800. Each Unit consists of one Class A
share of MacDonald (a “Share”) and one-half of one
Share purchase warrant of MacDonald (a “Warrant”). Each whole Warrant
will entitle HudBay to acquire one Share at an exercise
price of C$0.25 at any time during the 36 months following closing of
the transaction.
Upon closing of the subscription, which is subject to certain
customary conditions, including approval of the listing of the Shares to
be issued to HudBay, HudBay will own and have control over 19,060,000
Shares (approximately 9.9% of the issued and outstanding
Shares), and will own 9,530,000 Warrants which, together with the
Shares, represents approximately 14.15% of the issued and
outstanding Shares on a partially-diluted basis). Pursuant to the
subscription agreement, MacDonald has granted to HudBay the
right to participate in future equity financings that might be
undertaken by MacDonald (for so long as HudBay holds at least five
percent of the issued and outstanding Shares) on a basis that would
permit HudBay to maintain its then current percentage equity
ownership of MacDonald.
In connection with the equity investment, the companies have also
executed a Memorandum of Understanding which outlines the
intentions of the parties on such matters as strategic joint ventures
and the disposition/acquisition of mineral properties. In the
Memorandum of Understanding, HudBay has also expressed its intention to
provide MacDonald with technical support and
expertise relating to its exploration activity.
The acquisition of the Shares and Warrants is being made to assist in the financing, exploration and development of MacDonald’s
mineral properties.
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 2501,
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 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
intentions with respect to future arrangements or joint ventures with
MacDonald. 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.
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