Canadian mining companies Hudbay Minerals and Rockcliff Metals have signed a definitive agreement, under which Hudbay will acquire the remaining stake in Rockcliff for around $13m.

Under the terms of the agreement, Rockcliff shareholders will receive 0.006776 of a Hudbay common share for each Rockcliff common share held.

The transaction will be implemented by way of a court-approved plan of arrangement, as per the Business Corporations Act (Ontario).

It also requires approval of the Ontario Superior Court of Justice and the approval of at least two-thirds of the votes cast by Rockcliff shareholders at a special meeting.

The transaction is expected to be completed in the third quarter of this year, subject to other customary conditions and stock exchange approvals.

Hudbay president and CEO Peter Kukielski said: “This is a logical transaction that has the potential to further extend mine life at our Snow Lake operations by consolidating our ownership in the Talbot copper-gold deposit and more than tripling our prospective land package in the Snow Lake region.

“The Talbot deposit and the additional Rockcliff satellite deposits provide further optionality and potential future feed sources for our Stall and New Britannia mills.”

In connection with the agreement, Rockcliff has appointed a special committee of independent directors to make a recommendation to its Board of Directors.

The Special Committee, after consultation with its financial and legal advisors, unanimously recommended the Board to approve the proposed acquisition.

The Rockcliff Board recommended the shareholders vote in favour of the transaction.

Both companies are joint venture partners on the Talbot project, where Rockcliff owns a 49% stake and Hudbay owns the remaining 51% stake.

Rockcliff is one of the largest landholders in the Snow Lake area, which owns a total of around 1,800km² area across all its properties in the region.

INFOR Financial serves as financial advisor and Peterson McVicar as legal counsel to Rockcliff, while National Bank Financial serves as financial advisor and Goodmans as legal counsel to Hudbay.

Rockcliff interim president, CEO and director Ken Lapierre said: “We are delighted that Hudbay views Rockcliff as an important and strategic acquisition for their operations in the Snow Lake camp.

“As a junior explorer, it is a fitting result to be able to complete a transaction with a producer such as Hudbay. It is also a testament to the work completed and prospectivity of our assets that one day these deposits may become mines in the camp.

“We can now move forward as Hudbay shareholders and benefit from their abilities as an explorer and producer in the precious and base metal space and from their growing inventory of world-class assets in the Americas.”