Hudbay Minerals Inc. announced that it has struck a deal to acquire Copper Mountain Mining Corp., in an all-stock deal valued at US$439 million.

The companies said the combination will create an Americas-focused copper mining company with an operating portfolio of three long-life mines, as well as a pipeline of copper expansion and development projects. Hudbay said the assets in the combined portfolio are located in tier-one mining-friendly jurisdictions of Canada, Peru and the United States. The combined company represents the third-largest copper producer in Canada based on 2023 estimated copper production.

Under the agreement, Copper Mountain shareholders will receive 0.381 of a Hudbay share for each Copper Mountain common share held.
The companies say the proposal represents a 23 per cent premium based on Hudbay's and Copper Mountain's 10-day volume-weighted-average share prices on April 12.

The deal, which requires approval by a two-thirds majority vote by Copper Mountain shareholders and a simple majority vote by Hudbay shareholders, is also subject to closing conditions including regulatory and court approvals.

Once the transaction is complete, Hudbay shareholders will own about 76 per cent of the combined company, while Copper Mountain shareholders will hold 24 percent.

“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,” said Peter Kukielski, Hudbay’s President and Chief Executive Officer. “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. With an expanded copper production profile, a low-cost position on the copper curve and an enviable copper growth pipeline, the combined company is expected to generate robust cash flows through the cycle and achieve attractive returns by efficiently allocating capital to the highest risk-adjusted return opportunities in the combined project portfolio. Most importantly, the combined company will be underpinned by our shared commitment to the highest safety and ESG standards.”

Edward Dowling, Copper Mountain’s Chair of the Board of Directors, stated, “The strategic rationale of the transaction is compelling on many levels, and the combined company is well-positioned to create sustainable value for all stakeholders. This transaction provides Copper Mountain shareholders with an attractive premium and the opportunity to participate in a more diversified portfolio of three operating assets and a leading organic copper growth pipeline.”

Gil Clausen, Copper Mountain’s President and Chief Executive Officer, added, “We are very pleased to be entering into this combination with Hudbay. The Copper Mountain team has done a tremendous job as seen through the positive momentum at the mine, and I am extremely proud of the team’s efforts. 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.”