Hudbay and Copper Mountain Announce Filing of Joint Management Information Circular in Connection with Proposed Combination and Support from Largest Shareholders
Hudbay and Copper Mountain Announce Filing of Joint Management Information Circular. (Credit: Albert Hyseni on Unsplash)
Hudbay Minerals Inc. (“Hudbay”) (TSX, NYSE: HBM) and Copper Mountain Mining Corporation (“Copper Mountain”) (TSX: CMMC) (ASX: C6C) are pleased to announce today that they have filed a joint management information circular dated May 15, 2023 and related meeting materials (the “Meeting Materials”) in connection with their respective special meetings of shareholders (the “Meetings”) scheduled to be held on June 13, 2023. The purpose of the Meetings is to seek approval for certain matters in connection with their previously announced transaction whereby Hudbay will acquire all of the issued and outstanding common shares of Copper Mountain, pursuant to a court approved plan of arrangement under the Business Corporations Act (British Columbia) (the “Transaction”).
The Transaction
The Transaction will create a premier Americas-focused copper mining company that is well-positioned to deliver sustainable cash flows from an operating portfolio of three long-life mines, as well as compelling organic growth from a world-class pipeline of copper expansion and development projects. All assets in the combined portfolio are located in the tier-one mining-friendly jurisdictions of Canada, Peru and the United States. The combined company will be the third largest copper producer in Canada based on 2023 estimated copper productioni.
Under the terms of the Transaction, each Copper Mountain shareholder will receive 0.381 of a Hudbay common share for each Copper Mountain common share held, representing a 23% premium to Copper Mountain shareholders based on Hudbay’s and Copper Mountain’s 10-day volume-weighted-average share prices on April 12, 2023 (being the last trading immediately prior to the Transaction announcement). The Transaction requires the approval of at least 66 2/3% of the votes cast by the shareholders of Copper Mountain, a simple majority of the votes cast by shareholders of Copper Mountain excluding the votes required to be excluded by Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions, and a simple majority of the votes cast by shareholders of Hudbay. In addition to shareholder approvals, the Transaction is subject to final court approval and the satisfaction of certain other customary closing conditions for transactions of this nature. The Toronto Stock Exchange has conditionally approved the listing of the Hudbay common shares to be issued in connection with the Transaction, and the requisite regulatory approval for the Transaction under the Competition Act (Canada) has been obtained. It is currently anticipated that the effective date of the Transaction will occur in late June 2023.
Board of Directors’ Recommendations and Key Stakeholder Support
The Board of Directors of each of Hudbay and Copper Mountain unanimously approved the Transaction and recommend that each of their respective shareholders vote “FOR” the Transaction.
Zeta Resources Limited, the largest shareholder of Copper Mountain, holding 21,359,745ii Copper Mountain shares representing approximately 9.96% ownership of Copper Mountain on a non-diluted basis, intends to vote in favour of the Transaction.
GMT Capital Corp., the largest shareholder of Hudbay, holding 30,779,920iii Hudbay shares representing approximately 11.75% ownership of Hudbay on a non-diluted basis, intends to vote in favour of the Transaction.
Katsuyoshi Isaji, Managing Executive Officer and President, Metals Company, Mitsubishi Materials Corporation, the 25% minority owner of the Copper Mountain Mine, commented, “We fully support the combination of Hudbay and Copper Mountain. We have long respected the operating expertise of Hudbay and are excited to further our relationship as joint venture partners. We believe that the Copper Mountain Mine is a high-quality asset, and we look forward to continuing to unlock its full potential for the benefit of all stakeholders.”
Source: Company Press Release