Copper Mountain Mining Corporation shares jumped 16% to $2.61 on Thursday after the copper miner said it has agreed to be acquired by Hudbay Minerals Inc in an all-stock transaction valued at US$439 million.
Copper Mountain shareholders will receive 0.381 of a Hudbay share for each Copper Mountain common share held.
The company said the combined entity would be the third largest copper producer in Canada, mining 150,000 tonnes of copper per year while owning long-life mines plus a world-class pipeline of organic copper growth projects.
“We estimate that this combination could unlock US$30 million per year in operating efficiencies and corporate synergies, and it is accretive to Hudbay’s key per share metrics,” Hudbay CEO Peter Kukielski said in a statement.
“With an expanded copper production profile, a low-cost position on the copper curve and an enviable copper growth pipeline, the combined company is expected to generate robust cash flows through the cycle and achieve attractive returns by efficiently allocating capital to the highest risk-adjusted return opportunities in the combined project portfolio,” Kukielski added.
On completion of the transaction, Hudbay shareholders will own about 76% of the combined company, while Copper Mountain shareholders will hold 24%.
Shares of Hudbay Minerals had eased nearly 2% in early Thursday trading following the announcement.
Contact Sean at sean@proactiveinvestors.com