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HudBay Minerals reaches deal to buy Augusta for $555M

HudBay Minerals Inc. reached a friendly deal Monday to acquire Augusta Resource Corp. after it improved its bid in an offer valued at $555 million.

Mining company developing promising copper property in Arizona

The Canadian Press ·
Metal machinery is seen inside a zinc mine.
An image from Hudbay Minerals' Flin Flon zinc plant. The company has bought Augusta Resource for about $555 million. (Hudbay Minerals)

HudBay Minerals Inc. reached a friendly deal Monday to acquire Augusta Resource Corp. after it improved its bid in an offer valued at $555 million.

Under the deal, HudBay, which had earlier been rebuffed by the junior company, will give Augusta shareholders 0.17 of a warrant in addition to its original offer of 0.315 of a HudBay share per Augusta share.

Each whole warrant, which will have an initial four-year term, entitles the holder to acquire a HudBay share for $15. The companies valued the offer at $3.56 per Augusta share.

Augusta shares closed at $3.20 on the Toronto Stock Exchange on Friday, while HudBay shares last traded for $10.29.

Augusta is developing the Rosemont copper-molybdenum project near Tucson, Ariz., one of the world’s most promising undeveloped copper deposits with seven billion pounds of copper reserves and other resources.

The company had originally rejected the HudBay offer and used a shareholder rights plan to block the hostile takeover offer.

However, the B.C. Securities Commission placed a limit on the rights plan last month. If HudBay extended its offer to July 16, the rights plan would be blocked on July 15.

HudBay already owns about a 16 per cent stake in Augusta.

Augusta had said that nine potential rival buyers had signed confidentiality agreements and were reviewing its books.

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