Hudbay to acquire Rockcliff in $13 million deal
Hudbay Minerals Inc. [HBM-TSX, NYSE] has agreed to acquire 100% of the shares it does not already own in Rockcliff Metals Corp. (RCLF-CSE, ROO Frankfurt, A2H60G-WKN).
Rockcliff is a Canadian resource development and exploration company with several advanced stage high-grade copper and zinc dominant VMS deposits in the Snow Lake area of Manitoba. The company is a major landholder in the belt (with approximately 1,800 square kilometres across all properties), which is the largest Paleoproterozoic VMS district in the world, hosting high-grade mines and deposits containing copper, zinc, gold and silver.
Rockcliff is a 49% joint venture partner on Hudbay’s Talbot project and also owns 100% of six additional deposit in the Snow Lake region. The company has measured and indicated resources of 7.9 million tonnes of grade 3.60% copper equivalent (CuEq) and inferred resources of 5.1 million tonnes of grade 3.19% CuEq.
“This is a logical transaction that has the potential to further extend the mine life at our Snow Lake operations by consolidating our ownership of the Talbot copper-gold deposit and more than tripling our prospective land package in the Snow Lake region,’’ said Hudbay President and CEO Peter Kukielski. The Talbot deposit and additional Rockcliff satellite deposits provide further optionality and potential future feed sources for our Stall and New Britannia mills.’’
Under the arrangement, Rockcliff shareholders will receive 0.006776 of a Hudbay common share for each Rockcliff share price. The enterprise value to Hudbay, net of Rockcliff’s cash, is approximately $13 million.
Rockcliff shareholders owning 65% of the company have agreed to vote their shares in favour of the deal, which was announced after the close of trading on June 19, 2023, when Rockcliff shares closed at $0.02. The shares trade in a 53-week range of $0.045 and $0.01.
Hudbay shares closed at $6.94 and trade in a 52-week range of $8.47 and $4.07.
On Tuesday Hudbay completed a previously announced merger with Copper Mountain Mining Corp. [CMMC-TSX] in a transaction worth $2.67 a share or US$439 million.
The companies said the deal 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 organic growth from a pipeline of copper expansion and development projects.
The combined company represents the third largest copper producer in Canada (150,000 tonnes annually), based on 2023 estimated copper production.
Copper Mountain’s key asset is the 75%-owned Copper Mountain Mine in British Columbia, which currently produces approximately 100 million pounds of copper equivalent per year, with average annual production expected to increase to approximately 140 million pounds of copper equivalent at a cash cost of US$1.19 per- pound over the first 10 years of its 21-year mine life.