Hudbay Minerals (TSX: HBM) is continuing on an acquisition streak, revealing last night it has entered an arrangement to consolidate the Snow Lake camp of Manitoba.
The firm has entered into an arrangement to acquire Rockcliff Metals (CSE: RCLF) in an all-stock transaction, valuing Rockcliff at $13.0 million. The company owns 49% of Hudbay’s Talbot project, as well as six other additional deposits in the Snow Lake area, with total holdings in the region amount to 1,800 square kilometres.
The transaction is expected to add 7.9 million tonnes of measured and indicated mineral resources to Hudbay’s portfolio, which grades 3.60% copper equivalent. Inferred mineral resources meanwhile amount to 5.1 million tonnes of 3.19% copper equivalent.
Shareholders of Rockcliff are to receive 0.006776 shares of Hudbay for each share of Rockcliff held. The transaction is slated to close in Q3 2023.
“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,” commented Rockcliff CEO Ken Lapierre.
Copper Mountain closes
Hudbay meanwhile this morning reported that its US$439 million acquisition of Copper Mountain Mining Corp (TSX: CMMC) has closed, following the receipt of regulatory approval late last week. That transaction saw Copper Mountain shareholders receive 0.381 shares of Hudbay per share held, with the figure representing a value of C$2.67 at the time of announcement in mid-April.
With the combination now closed, Hudbay becomes the third largest copper producer in Canada, with Hudbay having production of 150,000 tonners per year across three mines located in Canada, Peru, and the United States.
The transaction is expected to see synergies – read cost cutting – of US$30 million per year, of which the majority, or US$20 million, is expected to come from operating cost reductions at the Copper Mountain mine.
“By applying our technical expertise, we expect to unlock significant annual operating efficiencies and synergies at the mine to drive further value for shareholders. This transaction creates a larger, more resilient operating platform that enhances our copper exposure, accelerates our deleveraging efforts, and positions us to more efficiently allocate capital to prudently advance our enviable organic growth pipeline,” commented Peter Kukielski, CEO of Hudbay Minerals.
Jeane Hull and Paula Rogers have been added to Hudbay’s board of directors in connection with the closing of the transaction.
Hudbay Minerals last traded at $6.94 on the TSX.
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As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.