Miner merger afoot at Copper Mountain
Copper Mountain Mine near Princeton is on the verge of being acquired by a larger firm in a partnership that would create the thirdlargest copper producer in Canada.
Shareholders of both Copper Mountain Mining Corp. and Hudbay Minerals Inc. — both of which trade on the Toronto Stock Exchange — are slated to vote separately June 13 on the merger.
Major investors in both companies, as well as the respective boards, are both recommending in favour of the deal.
“The transaction will create a premier Americas-focused copper mining company that is well-positioned to deliver sustainable cash flows from an operating portfolio of three long-life mines, as well as compelling organic growth from a world-class pipeline of copper expansion and development projects,” the companies announced in a press release Thursday.
“All assets in the combined portfolio are located in the tier-one mining-friendly jurisdictions of Canada, Peru and the United States. The combined company will be the third-largest copper producer in Canada based on 2023 estimated copper production.”
Copper Mountain Mine, which is about 20 kilometres south of Princeton, has been giving up its bounty since the late 1800s. A handful of different companies eventually established commercial mines there, the last of which closed in 1996.
The mine’s current owners resurrected it in 2011 when Mitsubishi Materials Ltd. took a 25% stake and agreed to buy all the copper it produces.
Copper Mountain employs about 400 people and last year produced about 24,000 tonnes of copper equivalent — about half its typical annual output — as a result of equipment breakdowns and a ransomware attack.
The company’s sole mine is in the Princeton area.
Hudbay Minerals operates one copper mine in Manitoba and another in Peru, and is developing two more sites in the U.S.
It’s proposing to buy Copper Mountain Mining Corp. in an allstock deal valued at about $440 million. Copper Mountain owners would receive 0.381 of a share in Hudbay Minerals for each Copper Mountain share they exchange.
Copper Mountain shares closed Thursday at $2.41, down 1% on the day, but up about 40% since Jan. 1.
Hudbay Minerals shares closed Thursday at $6.40, down 2% on the day and 8% on the year.