Hudbay denies talk of Chilean Mantos buy
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Toronto-based Hudbay issued a statement citing its policy not to comment on speculation and rumours. However, the company emphasised it had a consistent strategy of optimising the value of its current operations and evaluating growth opportunities that were complementary to its current business.
The Bloomberg report cited "unnamed sources familiar with the matter", who said Mantos could fetch up to US$780 million in a sale. The company had been looking for a buyer to fund expansion plans at its two mines in northern Chile's Antofagasta and Atacama region.
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A consortium led by British investment company Audley Capital Advisors and Orion Mine Finance Group bought the Mantos Blancos and Mantoverde copper mines from Anglo American in 2015 for US$300-million, plus $200-million in conditional future payments.
The company had two important projects on the books to increase the production and useful life of its operations. These included the Mantoverde development project and the Mantos Blancos concentrator de-bottling project, which could double annual output to about 165,000t of fine copper by 2021.
To finance the expansion, which would cost nearly $1-billion, Mantos Copper had hired French investment bank Societe Generale to work on debt financing and the Bank of Nova Scotia to raise equity for the projects, and to find a potential buyer, an April press release said.
Hudbay stressed its strategy might include acquisitions that fit its "stringent criteria, ranging from early stage exploration to producing mines, provided they are accretive to shareholder value".
Mantos' assets were expected to attract a lot of market attention as few new significant copper deposits had been discovered in recent years and several of the world's biggest mines were nearing the end of their economic lives.
Hudbay's shares fell more than 6% in trading Thursday to close at C$6.18 apiece, giving it a market value of C$1.6 billion.