The MOU also provides a framework for a future joint venture between the parties if the exploration efforts are successful in discovering new deposits in the Flin Flon region
Hudbay and Marubeni Establish Framework for Flin Flon Exploration Partnership. (Credit: Анатолий Стафичук from Pixabay)
Hudbay Minerals Inc. (“Hudbay” or the “company”) (TSX, NYSE: HBM) announces the signing of a memorandum of understanding (“MOU”) with Marubeni Corporation (“Marubeni”) that establishes the framework for a multi-year exploration partnership focused on the discovery of new deposits within trucking distance of Hudbay’s existing processing facilities in Flin Flon, Manitoba.
“Signing this MOU is the beginning of what we hope will be a long-term relationship between Hudbay and Marubeni to unlock value in the Flin Flon region,” said Peter Kukielski, Hudbay’s President and Chief Executive Officer. “This exploration partnership would allow us to couple our operational and exploration expertise with Marubeni’s balance sheet strength to test our large Flin Flon land package and potentially revive our dormant Flin Flon processing facilities. We have discovered and operated 29 mines in Hudbay’s nearly 100-year history in Manitoba and we have the potential to continue that success with this renewed focus on exploration in Flin Flon.”
Masafumi Ichigetsu, General Manager, Copper Mining Dept., Marubeni, commented, “This exploration partnership would give us access to the Flin Flon Greenstone Belt, one of the most prospective base metal VMS camps in the world. We see tremendous opportunity in this camp where we have the ability to partner with Hudbay and benefit from their technical expertise and proven track record of successful discovery, development and operation of many mines in the region. We are eager to begin building a long-lasting and prosperous partnership with Hudbay that will undoubtedly yield exceptional results.”
In connection with the MOU, Hudbay and Marubeni have agreed to negotiate the terms of a definitive agreement to govern the relationship between the parties and the Flin Flon properties that would form the subject of the exploration partnership (the “Project Properties”). It is currently contemplated that Marubeni would be required to fund approximately $10 – 15 million of exploration expenditures on the Project Properties and that Hudbay will act as operator and carry out the exploration activities. The definitive agreement will provide for the allocation of these expenditures among the Project Properties.
The MOU also provides a framework for a future joint venture between the parties if the exploration efforts are successful in discovering new deposits in the Flin Flon region. Upon satisfaction of certain earn-in obligations, it is expected that Marubeni would have the option to acquire a substantial minority equity interest in the projects, allowing the parties to jointly pursue the development of the projects. The final structure of a joint venture between the parties would be determined by the terms of a joint venture agreement.
Source: Company Press Release