TORONTO, ONTARIO -- (MARKET WIRE) -- 08/05/11 --
HudBay Minerals Inc. ("HudBay", the "company") (TSX: HBM)(NYSE: HBM) announced that it has entered into a definitive agreement to sell 100% of its interest in the Fenix ferro-nickel project in Guatemala to the Solway Group. Pursuant to the terms of the agreement, HudBay will receive US$140 million in cash at closing and US$30 million upon the satisfaction of certain conditions during the course of Solway's development of the project.
"While we believe that Fenix
is a robust project that warrants development, the project does not fit
our strategy of focusing on VMS and porphyry deposits," said David Garofalo,
president and chief executive officer. "We believe that the sale
proceeds will further strengthen our balance sheet as we develop our
Lalor and Constancia projects. We are also pleased to see the project in
the hands of an experienced ferro-nickel operator, such as the Solway Group, which is committed to the development of Fenix."
HudBay expects to record a non-cash charge related to its investment in Fenix of approximately $212.7 million in its consolidated financial results for the three months ended June 30, 2011.
Closing of the transaction is expected to occur in the third quarter of 2011.
HudBay's financial and legal advisors on the transaction were Morgan Stanley & Co., Incorporated and Goodmans LLP, respectively.
HudBay Minerals Inc.
HudBay Minerals Inc. (TSX: HBM)(NYSE: HBM) is a Canadian integrated mining company with assets in North and Central America
principally focused on the discovery, production and marketing of base
and precious metals. 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
This news release contains "forward-looking information" within the meaning of applicable Canadian and United States
securities laws, including the anticipated timing of the transaction
and the impact on HudBay. Forward-looking information is based on the
views, intentions, opinions and estimates of management as of the date
such information is provided and is based on a number of assumptions and
subject to known and unknown risks, uncertainties and other factors
that may cause the actual events or results to be materially different
from those expressed or implied by such forward-looking information. The
timing and completion of the proposed transaction is subject to
customary conditions, termination rights and other risks and
uncertainties. Accordingly, there can be no assurance that the proposed
transaction will occur, or that it
will occur on the timetable or on the terms and conditions contemplated.
The proposed transaction could be modified, restructured or terminated.
Accordingly, readers should not place undue reliance on forward-looking
information. HudBay does not undertake to update any forward-looking
information, 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.
(HBM-G)
Contacts:
HudBay Minerals Inc.
John Vincic, Vice President,
Investor Relations and Corporate Communications
(416) 362 0615
john.vincic@hudbayminerals.com
Source: HudBay Minerals Inc.
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