Canadian mining corporation, Hudbay Minerals Inc. has reportedly signed an ‘Arrangement Agreement’ with mining firm, Mason Resources Corp., under which it will acquire Mason’s remaining 86% issued and outstanding common shares.
Sources close to the deal state that Mason’s shareholders will receive $0.40 in cash for each of Mason common share they own. In addition, all currency will be stated in Canadian dollars, unless otherwise specified in the agreement.
The Arrangement values Mason at $31 million, representing an attractive bonus on the recent Mason trading. Moreover, the enterprise value to Hudbay, including Mason’s net cash reserve and Hudbay’s current 14% ownership, is estimated at approximately $15 million, claim sources.
According to Nasdaq, Stephen Scott, President and CEO of Mason, said that the company is thrilled to be announcing this transaction and pleased with the progress it has made in establishing the Ann Mason project as a highly prospective copper deposit.
The acquisition by well-diversified base metal producer with cash flow will ensure a faster and low risk development track for the Ann Mason project, said Scott. The acquisition will provide shareholders an opportunity to realize the immediate value from their investment in Mason, he added.
Alan Hair, President and CEO of Hudbay, was quoted saying that the acquisition of the Ann Mason project is the next step in Hudbay’s strategy of accretive acquisitions of rare, high-quality copper resources in mining-friendly jurisdictions.
The Ann Mason project is a perfect fit for Hudbay’s development pipeline, which currently is at the stage where the company can apply its exploration expertise, advanced technical studies and leverage its proven mine development team to create value for its shareholders, Hair added.
Reliable sources claim that the Arrangement Agreement will provide a customary non-solicitation covenant on the part of Mason and a right in favor of Hudbay to match any unwanted superior proposal. Moreover, Mason has agreed to pay Hudbay a $1.6 million termination fee, if the Arrangement is not completed in certain circumstances, claim sources.