Canadian mining company Hudbay Minerals has signed a definitive agreement to acquire Copper Mountain Mining in a deal valued at $439m.
Under the terms of the agreement, Copper Mountain shareholders will receive 0.381 of a Hudbay common share for each share held in the company.
The transaction values each share of Copper Mountain at C$2.67 ($2).
Through the acquisition, Hudbay Minerals expect to create a premier Americas-focused copper mining company.
The merged portfolio’s assets are spread across Canada, Peru, and the US, all of which are tier-one mining-friendly jurisdictions.
Hudbay Minerals said that the combined company will become the third largest copper producer in Canada based on 2023 estimated copper production.
Upon completion of the deal, the shares of Copper Mountain will be de-listed from the Toronto Stock Exchange and the Australian Securities Exchange.
Hudbay Minerals president and CEO Peter Kukielski, said: “This transaction represents a unique opportunity to combine complementary assets and leverage our technical expertise to create value for the shareholders of both Hudbay and Copper Mountain.
“We estimate that this combination could unlock US$30 million per year in operating efficiencies and corporate synergies, and it is accretive to Hudbay’s key per share metrics.”
According to Hudbay Minerals, the consideration represents a premium of 23% to Copper Mountain shareholders based on both mining companies’ 10-day volume-weighted-average share prices on 12 April 2023.
Following the completion of the acquisition, the existing shareholders of Hudbay Minerals and Copper Mountain will hold nearly 76% and 24% of shares in Hudbay, respectively.
Copper Mountain president and CEO Gil Clausen said: “The mine is now at a point where it will benefit from the additional support available from Hudbay’s strong in-house technical services team.
“There also remains significant potential to unlock further value by leveraging the best practices of both companies.”
The deal is anticipated to be complete late in Q2 or early Q3 2023, subject to shareholders’ approval, customary conditions and regulatory approvals.
