Toronto-based junior company OntZinc (OTZ-V) has closed its purchase of Hudson Bay Mining and Smelting from South African mining house Anglo American (AAUK-Q), after completing large equity and debt financings.
OntZinc raised $143.8 million in an issue of 1.9 billion shares early this month, and has arranged an issue of senior secured notes for another $175 million. The purchase price from Anglo was $325 million, of which Anglo took $13 million in shares after additional security for reclamation plans had to be posted.
On Dec. 15, OntZinc announced that the governments of Manitoba and Saskatchewan had notified the company that they would require a review of the reclamation plan for Hudson Bay’s mine operations in the Flin Flon area, which straddles the border between the two provinces. The company has agreed to conduct a feasibility study to provide an updated estimate of closure and reclamation costs, and will post an additional $13 million letter of credit as security for reclamation obligations.
The current estimate on the reclamation plan is $51 million.
The company has consolidated its shares at a 30-for-1 ratio, giving it about 77 million shares issued and outstanding. The consolidated shares have been accepted for trading on the Toronto Stock Exchange. OntZinc has been renamed HudBay Minerals (HBM-T) and will begin trading on Dec. 24.
Peter Jones, who had headed the Hudson Bay operation for Anglo, will take over as president and chief executive officer, replacing lawyer Gregory Peebles, who resigned on Dec. 13. Peter George, who had served as interim chief executive, remains on the board of directors.
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