- Hudbay would be purchasing 7.95% minority interest that United Copper & Moly holds in the Rosemont project.
- The UCM transaction has been scheduled to close before the April 25, 2019 deadline.
Hudbay Minerals Inc., (Hudbay), a Toronto-based mining company, has reportedly arrived at an agreement with U.S-based mineral developer, United Copper & Moly LLC (UCM) to buy out its 7.95% minority stake in the open-pit copper mine, Rosemont project.
Reports cite, the move would be terminating UCM’s remaining off-take & earn-in rights. Hudbay would be making an upfront $45 million cash consideration to UCM for the minority interest. Moreover, it would also be making three $10 million annual installments to UCM starting the July 1, 2022.
According to a press release by Hudbay Minerals, the company has also agreed to relieve UCM from any obligations pertaining to the Rosemont copper mine project, a move that also includes the project loans that represent UCM’s proportionate share of the JV expenditures, which were incurred beyond the company’s initial earn-in investment.
The President & Chief Executive Officer of Hudbay Minerals, Alan Hair stated that the transaction considerably simplifies the mine’s ownership structure & further improves the company’s financial flexibility for the Rosemont project development. Hair further added that the project has been witnessing a sustained positive momentum as the company has recently obtained its section 404 water-permit & is at the cusp of advancing into the construction activities as the company makes some finishing touches to its prudent financing strategy.
Under its financing strategy, the company intends to deploy a process to look for a development JV partner for Rosemont soon. The move is expected to bring in substantial amount of interest from industry players for a minority stake, further boosted by the recent transactions & the mine’s status as a shovel-ready, world-class copper project.
According to reports, the UCM transaction has been scheduled to close no sooner than the 25th April 2019 deadline, pending the execution of the agreement and the approval of both parties’ board of directors.