Hudbay has reached a deal to buy another mining company, this time one with operations around Snow Lake.
Hudbay and Rockcliff Metals have entered into an agreement in which Hudbay will buy 100 per cent of Rockcliff’s issued and outstanding common shares, aside from ones it does not already own. Both companies confirmed the deal June 19, issuing their own statements confirming that terms had been met.
Under those terms, Hudbay will issue a fraction of a common share - about .0068 of a Hudbay share - for each Rockcliff common share. That value puts the deal at about $13 million in enterprise value.
“We are delighted that Hudbay views Rockcliff as an important and strategic acquisition for their operations in the Snow Lake camp,” said Rockcliff interim president, chief executive officer (CEO) and director Ken Lapierre.
“As a junior explorer, it is a fitting result to be able to complete a transaction with a producer such as Hudbay. It is also a testament to the work completed and prospectivity of our assets that one day these deposits may become mines in the camp.”
The deal’s announcement came one day before final approval was given for Hudbay’s purchase of B.C.-based mining company Copper Mountain.
Hudbay and Rockcliff have already worked together on the Talbot project at Talbot Lake, about 100 kilometres south-south-east of Snow Lake, which was owned 51/49 by the two companies with Hudbay holding the majority. Rockcliff also has full ownership of other deposits around the Snow Lake area, which will now be owned by Hudbay. That includes the Bur property northeast of Snow Lake, the Rail property north of Simonhouse Lake and the Tower property, located near Highway 6 north of Grand Rapids.
In all, Rockcliff owns about 1,800 square kilometres in mineral properties, most of which is around Snow Lake.
Hudbay president and CECO Peter Kukielski said the deal would help the company extend the life of its Snow Lake-area operations, thanks to Rockcliff’s package of land around the region.
“This is a logical transaction that has the potential to further extend mine life at our Snow Lake operations by consolidating our ownership in the Talbot copper-gold deposit and more than tripling our prospective land package in the Snow Lake region,” said Kukielski.
“The Talbot deposit and the additional Rockcliff satellite deposits provide further optionality and potential future feed sources for our Stall and New Britannia mills.”
Since the closure of its Flin Flon-area 777 mine and much of its local operations last summer, Hudbay has focused much of its exploration work and purchases around the Snow Lake area. The company operates several facilities near the community, including the Lalor mine, the New Britannia mill, Stall concentrator and several exploratory project sites. The company estimates it employs just over a thousand workers in its Manitoba operations, the vast majority of which work in the Snow Lake area.