The Monaco-based fund launched a proxy battle to replace the miner's board, after HudBay announced a friendly, but ill-fated merger late last year with Lundin Mining.

The proposed transaction drew shareholders' ire, because they believed HudBay was paying too much for Lundin, and particularly because HudBay investors were not to be given a vote on the deal.

However, HudBay and Lundin terminated their agreement after the Ontario Securities Commission ruled that HudBay shareholders must approve the transaction, as feedback from investors left no doubt that the deal would be killed in a vote.

Last week, HudBay CEO Allen Palmiere stepped down, and was replaced on an interim basis by Colin Benner.

However, the resignation failed to placate 11% shareholder SRM, which will now reinstate former HudBay CEO Peter Jones into the position, after accepting Benner's resignation.

Wesley Voorheis has been appointed chairperson, and joins J. Bruce Barraclough, Brian D. Gordon, Alan Roy Hibben, W. Warren Holmes, Jones, John Knowles and Alan Lenczner on the new board of directors of HudBay Minerals.

A shareholders meeting scheduled for Wednesday has been cancelled.

SRM has lambasted HudBay's board and management for its handling of negotiations for a now-defunct merger with Lundin Mining, and the way it responded to shareholders opposition to the deal.

HudBay owns mines, concentrators and a metal production complex in northern Manitoba and Saskatchewan, in Canada, as well as a zinc oxide production facility in Ontario, the White Pine copper refinery in Michigan, and a zinc mine in New York.

Battling slumping zinc and copper prices, the firm has closed some assets and also is facing the prospect of declining production over the next few years from ageing mines.

The firm's best growth prospect is the Lalor zinc prospect in Manitoba, but Palmiere and Benner have both indicated a mine would be uneconomic at current prices because of the depth of the deposit.

However, the firm is studying gold mineralisation discovered at Lalor, which might improve the viability of developing the project.