Hudbay Minerals Inc. and Arizona Sonoran Copper Company Inc. announced that they have entered into a definitive agreement pursuant to which Hudbay has agreed to acquire all of the issued and outstanding common shares of ASCU, not already owned by Hudbay, for consideration of 0.242 of a common share of Hudbay per common share of ASCU. The Transaction will result in Hudbay owning a 100% interest in ASCU’s Cactus project.
The Transaction brings together two highly complementary copper growth assets in Arizona and strengthens Hudbay’s position as a premier Americas-focused copper company with a pipeline of long‑life, low‑cost assets located in tier-one jurisdictions. The acquisition is expected to enhance Hudbay’s long‑term copper production profile, expand its U.S. growth pipeline, and benefit from increasing demand for domestically produced critical minerals in the U.S.
Peter Kukielski, Hudbay’s President and Chief Executive Officer, commented: “The acquisition of ASCU is a highly compelling transaction that further enhances Hudbay’s copper growth platform in the U.S. Cactus is a high-quality, large‑scale copper development asset in a mining jurisdiction that we know well. Together with the advancement of Copper World, this transaction creates one of the most significant copper districts in North America and reinforces Hudbay’s position as a premier copper growth company, while preserving financial flexibility and delivering long‑term value for shareholders.”
George Ogilvie, ASCU’s President and Chief Executive Officer, stated: “This transaction delivers ASCU shareholders compelling value today while preserving meaningful exposure to the long‑term upside of Cactus. Through ownership in Hudbay, our shareholders will gain immediate exposure to strong cash flow generation from a larger, diversified and well‑capitalized operating platform, while continuing to participate in the long‑term value of Cactus and adding exposure to Hudbay’s Copper World project as part of a new major copper hub in Arizona. Hudbay’s strong balance sheet, proven track record in Arizona, and disciplined approach to project development meaningfully de‑risks the development of Cactus and positions it for long‑term success. I would like to thank our whole team for their tremendous efforts advancing the Cactus project and creating lasting benefits for all stakeholders.”
David Laing, ASCU’s Chair of the Board of Directors, added: “We are delighted to have the opportunity for our Cactus project to be sequenced into Hudbay’s portfolio of long-life and high-quality assets in the Americas. As part of Hudbay, the financial dilution and execution risks of constructing Cactus are significantly lessened, providing a clear path to copper cathode production. More importantly, in joining with Hudbay, we put the project in the good hands of the 3rd largest copper producer listed on the New York Stock Exchange, and in what will become the 3rd largest copper district in North America. Thank you to George and the whole Arizona Sonoran team for their tireless and methodical approach to delivering value for the ASCU stakeholders.”
Under the terms of the Arrangement Agreement, each ASCU shareholder will receive 0.242 of a Hudbay common share for each ASCU common share held, which represents approximately C$9.35 per ASCU common share and a US$1,480 million equity value based on Hudbay’s closing share price on the TSX on February 27, 2026.
Hudbay currently owns 20.8 million common shares, representing approximately 9.99% of the outstanding basic shares of ASCU. The enterprise value to Hudbay net of existing equity ownership is approximately US$1,278 million. Following the closing of the transaction, existing Hudbay and ASCU shareholders will own approximately 89% and 11% of Hudbay, respectively.
The Arrangement Agreement provides for customary deal protection provisions, including a non‑solicitation covenant on the part of ASCU subject to customary “fiduciary out” rights for ASCU, a right for Hudbay to match any Superior Proposal (as defined in the Arrangement Agreement), as well as a termination fee payable by ASCU under certain circumstances. The directors and senior officers of ASCU owning in aggregate approximately 1.1% of ASCU’s voting securities have entered into voting support agreements pursuant to which they have agreed to vote all the securities they own or control in favour of the Transaction.
Further details regarding the terms of the Transaction are set out in the Arrangement Agreement, which will be publicly filed by Hudbay and ASCU under their respective profiles on SEDAR+ at www.sedarplus.ca. Additional information regarding the terms of the Arrangement Agreement, the background to the Transaction, the rationale for the recommendations made by the ASCU Board of Directors and how ASCU securityholders can participate in and vote at the special meeting to be called to consider the Transaction will be provided in the management information circular for the special meeting of ASCU securityholders (the “ASCU Circular”) which will also be filed at www.sedarplus.ca. ASCU securityholders are urged to read these and other relevant materials when they become available.
After consultation with its financial and legal advisors, the Board of Directors of Hudbay unanimously approved the entering into of the Arrangement Agreement.
After consultation with its financial and legal advisors and receiving the unanimous recommendation of the independent directors of ASCU, the Board of Directors of ASCU has unanimously approved entering into the Arrangement Agreement. The Board of Directors of ASCU recommends that ASCU shareholders vote in favour of the Transaction.
Scotiabank and Origin Merchant Partners have each provided a fairness opinion to the ASCU Board of Directors to the effect that, as of the date of such opinion and based upon and subject to the assumptions, limitations and qualifications stated in such opinion, the consideration to be received by the ASCU shareholders is fair, from a financial point of view, to such shareholders.
TD Securities Inc. is acting as financial advisor to Hudbay and Goodmans is acting as legal counsel to Hudbay. Additionally, National Bank Financial Inc. has been retained as strategic advisor to Hudbay.
Scotiabank is acting as financial advisor to ASCU. Origin Merchant Partners was engaged by the independent directors of the Board to provide an independent fairness opinion in respect of the Transaction. Osler, Hoskin & Harcourt LLP and Paul, Weiss, Rifkind, Wharton and Garrison LLP are acting as legal counsel to ASCU.
