Toronto's Hudbay Minerals has reached an agreement with United Copper and Moly to buy out UCM's 7.95% interest in the Rosemont copper project 50 km southeast of Tucson. The purchase includes termination of all UCM's remaining earn-in and offtake rights.
The price of the deal is $45 million in cash now plus three annual installments of $10 million beginning on July 1, 2022.
The arrangement simplifies the ownership structure and removes the current governance structure with UCM, which was inherited from the previous owner of Rosemont. This allows Hudbay to have greater strategic flexibility with respect to capital structure and project financing options.
Hudbay intends to evaluate a variety of options, including the addition of a new, committed joint venture partner for the development of Rosemont. The company will to carry out this process in parallel with advancing the initial development of Rosemont. Hudbay said it wants to ultimately hold an approximate 70% interest in the project and maintain operatorship.
Hudbay received the final permit for Rosemont construction earlier this week.
This article first appeared in the Canadian Mining Journal.