HudBay is prepared to move to other projects whether or not it finalizes the deal with Augusta
HudBay Minerals Inc. (TSE:HBM, Mkt cap 1.60B, P/E – , Div/yield 0.01/0.24, EPS -0.59, Shares 193.01M) currently pursuing a takeover of Augusta Resource Corp, will likely continue its acquisition drive even if it doesn’t succeed with the purchase of the local copper-mine developer, chief executive David Garofalo said last week.
Toronto-based HudBay filed a C$334 million hostile offer to buy the owner of the Rosemont copper project in Arizona in early February. The bid proved to be 16% lower than the target’s closing price in Toronto on March 10, implying that investors are most likely expecting a better offer. According to data compiled by Bloomberg, the bid represented the widest discount for any current acquisition on the Canadian market.
HudBay is prepared to move to other projects whether or not it finalizes the deal with Augusta, Garofalo said, adding that his company has already carried out “extensive” due diligence on a number of potential targets. The company plans to focus on purchases in Canada, the US, Mexico, Chile and Peru and will seek to buy projects that already have resource estimates.
There are several projects that match those criteria, but they are at an earlier phase than Rosemont and would likely require a lower amount of upfront capital, the CEO commented.
Last year, the level of M&A activity across the mining industry declined overall. The number of deals made in the sector amounted to 948 and their combined value stood at $50.8 billion, compared to more than 1,000 transactions with a total size of $109.7 billion sealed in 2012.
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