HudBay Minerals Inc. and Skye Resources Inc. announced that they have entered into a definitive agreement to combine their respective businesses. The Transaction will be structured as a Plan of Arrangement under the Business Corporations Act (British Columbia) between HudBay and Skye. On completion of the Transaction, all Skye common shares will be automatically exchanged on the basis of 0.61 HudBay common shares for each Skye common share. The consideration to Skye shareholders pursuant to the Plan of Arrangement represents approximately a 35.0% premium over Skye's 20 day volume weighted average trading price based on HudBay's 20 day volume weighted average trading price on the TSX and approximately a 17.0% premium over Skye's closing price as at June 20, 2008.As part of the Transaction, HudBay will acquire approximately 12,679,266 common shares of Skye at a price of CDN$7.51 per share in a private placement for total gross proceeds to Skye of approximately C$95,221,285, representing approximately 19.9% of Skye's outstanding common shares on a pro-forma basis. The Transaction is subject to Skye obtaining the required shareholder approval at a special shareholders' meeting of Skye and to the receipt of court and all necessary regulatory approvals. Upon completion of the Transaction, HudBay will have approximately 160.9 million common shares outstanding, of which current HudBay shareholders will own 79.7% and former Skye shareholders will own 20.3%