HudBay Minerals has signed a definitive agreement with the Solway Group for the sale of 100% interest in the Fenix project.
This is an iron and nickel-based project located in Guatemala. In accordance with the agreement terms, HudBay will be given cash of US$140 million at the closing phase and US$30 million upon the fulfillment of the definite conditions during the project development course of the Solway Group.
The CEO and President of HudBay, has stated that the company is considering Fenix as a robust project, which needs development and the project is not coincident with company’s focusing plan on the porphyry and VMS deposits. It is considered that this sale will additionally reinforce the balance sheet of the company as it expands the Constancia and Lalor projects. Moreover, the company is delighted to see the project with the Solway Group, which is a skilled ferro-nickel operator, and Solway has the experience and commitment to develop the Fenix project.
HudBay is expecting to document a non-cash charge associated with the investment in the Fenix project of around $212.7 million in its combined fiscal results for June, 2011. It is predicting that the transaction closing to happen in the third quarter of 2011.
Goodmans LLP and Morgan Stanley & Co. are the legal and financial advisors on the transaction for HudBay Minerals.