Hudbay, Copper Mountain merger to create Americas-focused copper producer

Hudbay Minerals (TSX:HBM; NYSE: HBM) and Copper Mountain Mining (TSX:CMMC; ASX:C6C) have entered into a definitive agreement to create a copper producing powerhouse with projects across the Americas. Together they will produce 330.7 million lb. of copper annually, making Hudbay the third largest Canadian copper producer. 

The all-share combination will see Hudbay acquire all the common shares of Copper Mountain. The transaction represents a US$439 million equity value. Copper Mountain shares will be valued at $2.67 each, which represents a 23% premium to its shareholders based on both company’s 10-day volume weighted average share prices on April 12, 2023. Existing Hudbay and Copper Mountain shareholders  will own about 76% and 24% of Hudbay, respectively. 

After the arrangement closes, the Hudbay board will include two seats for Copper Mountain representatives, and the Hudbay executive team will include select members from the Copper Mountain team. In light of the transaction, Copper Mountain president and CEO Gil Clausen has postponed his retirement until the deal closes. Both companies’ officers and directors have entered into voting support agreements and will be voting their shares in favor of the merger. 

After the transaction, Hudbay will have three long-life operating mines with exploration upside, three large-scale development projects, and one of the largest resource bases among intermediate copper producers. The net value of the portfolio will be balanced approximately 55% from North America (Canada and United States) and 45% from South America (Peru).  

There will be an estimated US$30 million annual operating efficiencies, including US$20 million from applying Hudbay’s efficiencies at the Copper Mountain mine. 

More information about the companies is posted on their websites, www.Hudbay.com and www.CuMtn.com.