HudBay, Lundin To Create Second Largest Base Metals Firm In Canada

November 21, 2008 8:02 p.m. EST

Toronto, Ontario (AHN) - HudBay Minerals and Lundin Mining Corporation announced on Friday the merger of their firms through an $814 million stock deal. The corporate wedding of the two firms will create the second largest base mining company in Canada.

Under the deal, HudBay will be the surviving company. The Toronto-based firm has mining operations in northern Manitoba and Saskatchewan and Central America. Its mines produce zinc and copper.

Lundin, based in Vancouver, has copper, nickel, lead and zinc mining operations in Portugal, Spain, Sweden and the Democratic Republic of Congo.

HudBay offered 0.3919 common shares for every Lundin stock or a total offering of $2.08 per Lundin share.

Because of weak zinc prices, Lundin announced recently the suspension of zinc production at its two mines in Portugal. The Aljustrel zinc mine will undergo maintenance, while the Nieves-Corvo copper-zinc mine will be placed on hold until prices rise once again.