TORONTO (miningweekly.com) – TSX-listed HudBay Minerals has agreed to subscribe for shares and warrants in MacDonald Mines Exploration, which is exploring for base metals in the Ring of Fire area of Ontario.

HudBay will buy 19,06-million units in a private placement for about C$3,43-million; each unit comprises one class A share and one half of a share-purchase warrant.

The shares alone represent almost 10% of MacDonald's issued and outstanding shares, and together with the warrants the private placement represents about 14,15% of the issued and outstanding shares on a partially diluted basis.

MacDonald has also granted HudBay the right to participate in future equity financings for as long as HudBay holds at least 5% of the issued and outstanding shares, on a basis that would permit HudBay to maintain its then current percentage equity ownership of MacDonald.

The companies have also signed a memorandum of understanding on potential future cooperation.

"The HudBay Minerals investment in MacDonald Mines is a very important step in highlighting the growing potential of the mineral wealth in the James Bay Lowlands Ring of Fire region,” MacDonald CEO Kirk McKinnon commented.

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