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Shareholders of both Hudbay Minerals Inc. [HBM-TSX, NYSE] and Copper Mountain Mining Corp. [CMMC-TSX] have approved the previously announced merger of the two companies.

“The overwhelming shareholder support solidifies the alignment of the Copper Mountain mine [in British Columbia] with Hudbay’s strategic and financial objectives and the combined company is well positioned to create meaningful value for all shareholders,’’ said Hudbay President and CEO Peter Kukielski.

The announcement comes after Hudbay recently agreed to acquire Copper Mountain in a transaction worth $2.67 a share or US$439 million. At a special meeting, 93.43% of Copper Mountain shareholders voted to accept the transaction, which is expected to take effect on June 20, 2023.

As of the effective date, each Copper Mountain shareholder will receive 0.381 of a Hudbay share for each Copper Mountain share or Copper Mountain CDI held. As a result, Copper Mountain will become a wholly-owned subsidiary of Hudbay.

News that the deal has been approved came after the close of trading on June 13, 2023, when Hudbay shares closed at $6.49. The shares are currently trading in a 52-week range of $8.47 and $4.07.

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.

These assets are expected to deliver US$30 million annually in operating efficiencies and corporate synergies.

The combined company represents the third largest copper producer in Canada (150,000 tonnes annually), based on 2023 estimated copper production.

Hudbay’s Constancia operations in Cusco, Peru, produce copper, with gold, silver and molybdenum by-products. Its Snow Lake operations in Manitoba produce gold with copper, zinc and silver by products. Its organic pipeline includes the Copper World project in Arizona and Mason project in Nevada.

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.

The company has been drilling a satellite deposit known as New Ingerbelle in a bid to define sufficient reserves to add another 10 years of production to Copper Mountain’s life of mine plan.

On October 6, 2022, Copper Mountain said it had agreed to sell its other key asset, the Eva Copper Project in the Mount Isa region of Queensland to Harmony Gold Mining Co. for US$230 million. The deal called for an upfront cash payment of US$170 million.

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