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Goodmans Deals & Cases

This section contains brief summaries of selected significant cases and transactions.  You'll also find representative lists  - by year - of major transactions and cases where Goodmans' involvement is a matter of public record or where inclusion in the list has been authorized by our clients.

HudBay Minerals Completes US$750 Million Precious Metals Stream Transaction as part of US$1.5 Billion Investment in its Constancia Copper Mine

2012

Areas Banking and Finance Law, Corporate Finance and Securities, Debt Issuances and High Yield Debt, Mining and Natural Resources

Summary

Goodmans represented HudBay Minerals Inc. (Hudbay) (TSX:HBM)(NYSE:HBM) in connection with its US$1.5 billion investment to fund the development and construction of its Constancia copper mine in Peru. The $1.5 billion investment included the completion on September 13, 2012 of an offering of US$500 million aggregate principal amount of 9.50% senior unsecured notes due 2020; and the completion on September 28, 2012 of a 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 instalments 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 Hudbay's Lalor project or Hudbay'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 Hudbay’s properties.