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Production at Hudbay flagship mine, the 777 in Flin Flon, Man.

Base metals miner HudBay is reaching into copper-rich Peru to revitalize its growth prospects after a series of corporate setbacks in recent years.

HudBay has struck a friendly $520-million cash-and-share deal to buy Norsemont including ownership of its flagship Constancia copper project in southern Peru, a stable mining country that ranks second worldwide, behind Chile, in production of the widely used metal.

The deal is the first major acquisition made by HudBay chief executive officer David Garofalo, who was appointed in July when he became the fourth person in two years to take the helm at the Toronto-based miner. It's also the first takeover HudBay has launched since its bid for Vancouver-based Lundin Mining Corp. failed in 2009.

If approved, the acquisition would give HudBay a footprint in South America, diversifying its production from its main copper and zinc operations in Manitoba, where the company has also refocused its efforts in recent months.

"It's a significant milestone," Mr. Garofalo said on Monday. "Now that we have taken care of business in our own home camp, we can now look further outwards to diversify our portfolio."

While HudBay said it has the support of about 35 per cent of Norsemont shareholders to complete the deal, and needs just 50-per-cent approval, analysts say other bidders could still surface as the race intensifies for what's left of the world's more accessible reserves.

"We know that a lot of mid-cap copper companies globally are looking, they are all cashed up and have pretty strong balance sheets," BMO Nesbitt Burns analyst David Cotterell said.

Copper prices have been on a record run over the past few months as a result of tight supply and rising demand both from industry and investors. The metal, used in everything from power to construction, is in especially high demand in rapidly industrializing countries such as China, the world's top consumer of base metals. High demand and supply shortages have also led to increased investor demand with the launch of new copper-backed, exchange-traded funds in recent weeks.

An acquisition of Norsemont would boost HudBay's copper production by 145 per cent by 2016 and increase its reserves by 350 per cent. Over its expected 15-year mine life, Constancia is expected to produce 172 million pounds of copper and two million pounds of molybdenum annually.

Building the Constancia mine will cost about $1-billion, which HudBay said it can do with existing cash and credit lines.

Norsemont CEO Patrick Evans said the company was approached by about 20 interested buyers before signing the deal with HudBay, which gives shareholders a piece of the Peru copper play.

"We are not cashing out," Mr. Evans said. "Having the consideration in HudBay shares is very compelling. … We have the opportunity to diversify and derisk, and to participate in the success and the growth of a very exciting and up-and-coming Canadian mining company."

Three of Norsemont's nine board members did not approve the HudBay agreement, including two who abstained from the vote and one who voted against the proposed deal. Mr. Evans said each of the three has ties to the Sentient Group, an Australian private equity firm and Norsemont's largest shareholder with about a 20-per-cent stake. Sentient hasn't decided whether to support the HudBay offer.