Hudbay announced last week that it has reached an agreement to sell its 51 per cent interest in the Back Forty Project in Michigan.
Hudbay’s joint venture partner in the project, Aquila Resources, will purchase the interest.
Hudbay is to receive common shares of Aquila, milestone payments tied to the development of the Back Forty Project and a net smelter return royalty on a portion of the property.
Completion of the transaction is conditional upon the completion of a business combination transaction between Aquila and REBgold Corporation, an equity financing by REBgold and other customary conditions.
Hudbay currently owns and controls 14,367,565 Aquila common shares, representing about 14.6 per cent of the issued and outstanding shares.
Upon completion of the transaction, Hudbay will be issued Aquila common shares based on a formula set out in the purchase agreement; however, in no event will the number of Consideration Shares issued to Hudbay result in Hudbay having ownership or control of more than 19.9 per cent of the Aquila common shares that will be issued and outstanding immediately following the completion of the transaction.
Upon closing of the transaction and the issuance to Hudbay of the Consideration Shares, Hudbay expects to own approximately 17.4 per cent of the issued and outstanding Aquila common shares.
Hudbay may in the future increase or decrease its ownership of securities of Aquila from time to time depending upon the business and prospects of Aquila, future market conditions and Hudbay’s investment objectives.
– Compiled from a Hudbay news release
