Diversified Canadian miner Hudbay on Thursday announced it would buy Copper Mountain Mining in an all-share transaction valued at $439-million, creating an Americas-focused, 150 000 t/y copper producer.

“We estimate that this combination could unlock $30-million per year in operating efficiencies and corporate synergies, and it is accretive to Hudbay’s key per share metrics," said Hudbay president and CEO Peter Kukielski.

Under the terms of the arrangement agreement, each Copper Mountain shareholder will receive 0.381 of a Hudbay common share for each Copper Mountain common share held.

The transaction consideration represents about C$2.67 a Copper Mountain common share, which Hudbay pointed out was a 23% premium to Copper Mountain shareholders based on the respective companies' ten-day volume-weighted-average share prices on April 12.

Copper Mountain’s and Hudbay’s respective officers and directors have entered into voting support agreements pursuant to which they have agreed, among other things, to vote their shares in favor of the transaction.

Hudbay pointed out that the combined company would be the third biggest copper producer in Canada, based on 2023 estimated output.

"With an expanded copper production profile, a low-cost position on the copper curve and an enviable copper growth pipeline, the combined company is expected to generate robust cash flows through the cycle and achieve attractive returns by efficiently allocating capital to the highest risk-adjusted return opportunities in the combined project portfolio," said Kukielski.

Copper Mountain owns a namesake mine near Princeton, British Columbia. The company's CEO, Gil Clausen, noted that the Copper Mountain mine was as at a point where it would benefit from the additional support available from Hudbay’s strong in-house technical services team. 

Copper Mountain chairperson Edward Dowling added that the transaction provided shareholders with an attractive premium and the opportunity to participate in a more diversified portfolio of three operating assets and a leading organic copper growth pipeline.

“The strategic rationale of the transaction is compelling on many levels, and the combined company is well-positioned to create sustainable value for all stakeholders," said Dowling.

In recent months, the mining sector has seen a flurry of deal making activity as companies jostle to position themselves for growth, particularly in metals required for the energy transition.