Hudbay Minerals (TSX: HBM; NYSE: HBM) and a syndicate of underwriters co-led by RBC Capital Markets and BMO Capital Markets have entered into an agreement involving the sale of 31.6 million common shares of Hudbay at a price of $12.98 (US$9.50) per share for gross proceeds of about $478 million (about US$350 million).
The underwriters have been granted an option to purchase an additional 15% of shares in connection with the offering, raising an additional $72 million.
The net proceeds of the offering will be used to fund near-term growth initiatives, including the acceleration of mine pre-stripping activities and mill optimization initiatives at its Copper Mountain mine in British Columbia.
The offering will also be used to improve balance sheet flexibility through debt payments for its Arizona copper complex Copper World, to evaluate improving mill throughput at the Constancia copper mine in Peru and New Britannia gold mine in Manitoba, and for general corporate purposes.
Hudbay released its first 43-101 technical report for Copper Mountain in December 2023 and has plans to increase copper production by 90% and cut cash costs by 50% compared to 2022 levels.
Average annual copper production should be 46,500 tonnes for the next five years at a cash cost of US$1.89 per pound.
Hudbay acquired Copper Mountain Mining in June 2023, and now owns 75% of the operation. The remaining 25% is owned by Japan’s Mitsubishi Materials.
Learn more at www.HudbayMinerals.com.
