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Mining industry

Mining Dealmaking to Continue Amid Commodity Price Declines, Says HudBay CEO

Strategic Insights

— 1 min read

HudBay Minerals Inc. CEO David Garofalo sees a continuation of mining dealmaking in the coming year as cash-rich miners seize opportunities presented by falling commodity prices and global growth concerns. The company isn't planning to make a competing bid for Quadra FNX Mining Ltd. but is open to further acquisitions after its $524 million purchase of Norsemont Mining Inc. earlier this year. Falling metal prices have weakened the share prices of mining companies, offering a chance for established producers to buy assets at a relative bargain.

Key Takeaways:

  • HudBay Minerals Inc. CEO David Garofalo expects to see more mining deals in the coming year as cash-rich miners consolidate the sector.
  • Falling commodity prices and global growth worries have weakened the share prices of mining companies, creating opportunities for cash-rich competitors to buy assets at a relative bargain.
  • HudBay is open to further acquisitions after its $524 million purchase of Norsemont Mining Inc. earlier this year.
  • The company has $871 million in cash at the end of September, providing it with a strong financial position to pursue dealmaking.
  • Garofalo believes there are opportunities for established producers to pick up early-stage development projects from struggling junior mining companies.
  • HudBay mines copper, zinc, silver, and gold in Canada and is developing mines in Peru and the US.

Statistics:

  • HudBay has $871 million in cash at the end of September.
  • The company acquired Norsemont Mining Inc. for $524 million earlier this year.
  • KGHM Polska Miedz SA made a $2.83 billion friendly cash offer for Quadra FNX Mining Ltd.
  • HudBay is developing mines in Peru and the US.

Sources:

  • Dow Jones Commodities News via Comtex
  • Dow Jones Newswires
  • Copyright (c) 2011 Dow Jones & Company, Inc.

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