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Conyers Dill & Pearman advises HudBay Minerals Inc. on US$750,000,000 transaction

November 2012 Cora S. Miller

On September 28, 2012, HudBay Minerals Inc. (“HudBay”) and its affiliates closed its previously announced precious metals stream transaction with Silver Wheaton Corp. (TSX:SLW)(NYSE:SLW) (“Silver Wheaton”). At closing, HudBay received an upfront deposit payment of US$500 million and will receive a further US$250 million in deposit payments in two equal installments once US$500 million and US$1.0 billion, respectively, in capital expenditures have been incurred at its Constancia project. In connection with the granting of certain security to Silver Wheaton at closing, HudBay also entered into an amendment to its existing US$300 million credit facility.

The US$750 million of deposit payments are in respect of (i) 100% of payable gold and silver from HudBay’s 777 mine until the later of December 31, 2016 and satisfaction of a completion test at Constancia, and thereafter 50% of payable gold and 100% of payable silver, and (ii) 100% of payable silver from the Constancia project. In addition to the deposit payments, for gold and silver delivered, the company will receive cash payments equal to the lesser of (i) the market price and (ii) US$400 per ounce (for gold) and US$5.90 per ounce (for silver), subject to 1% annual escalation after three years.

The stream transaction does not include gold production at Constancia, precious metals production from the company’s Lalor project or the company’s land package in Peru outside of the Constancia and Pampacancha deposits or any other metals or minerals, including copper or zinc, from any of the company’s properties.

HudBay (TSX, NYSE: HBM) is a Canadian integrated mining company producing copper concentrate (containing copper, gold and silver) and zinc metal. With assets in North and South America, HudBay is focused on the discovery, production and marketing of base and precious metals. A member of the S&P/TSX Composite Index and the S&P/TSX Global Mining Index, HudBay is committed to high standards of corporate governance and sustainability.

Cora Miller of Conyers’ British Virgin Islands office and Olivaire Watler of Conyers’ Cayman Islands advised HudBay in addition to, amongst others, Goodmans LLP, Cassels Brock & Blackwell LLP, Nino Coppero and Rodrigo, Elias & Medrano Abogados and Walkers.


Cora S. Miller

British Virgin Islands, Cayman Islands   +1 284 346 1112


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