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Message: Lenders Refuse to Renew $80 Million Credit Facility Due to SRM's Actions
| February 27, 2009 |
| HudBay Lenders Refuse to Renew $80 Million Credit Facility Due to SRM's Actions |
| TORONTO, ONTARIO--(Marketwire - Feb. 27, 2009) - HudBay Minerals Inc. ("HudBay", "the company") (TSX:HBM) announces that its lenders have refused to renew an $80 million credit facility that is due to expire February 28, 2009. The facility is currently undrawn, and HudBay continues to have a strong balance sheet with $686 million in cash on hand at February 25, 2009 and no indebtedness. The lenders have advised that their decision to not renew the facility was caused by SRM Global Master Fund Limited Partnership's ("SRM") requisition of the upcoming meeting on March 25, 2009 of HudBay shareholders to consider the removal the board of directors of HudBay and replacing them with a slate nominated by SRM. The lenders noted the uncertainty regarding the future direction of HudBay, and expressed concern that a new board may distribute much of HudBay's cash balances to shareholders rather than maintain them for ongoing development. SRM has made repeated requests to HudBay's management that HudBay utilize its cash balances to conduct a major share repurchase program. "It is clear that the uncertainty regarding SRM's intentions is already affecting HudBay Minerals," said Allen J. Palmiere, the company's chief executive officer. "HudBay remains financially strong given our cash balances, and the expiry of our credit facility is not expected to impact the strategy of the current board and management. However, we believe that SRM's proposed strategy of spending cash on a major share repurchase program would be misguided and not in the best interests of HudBay or its shareholders." HudBay Minerals Inc.: Strength to Build the Future HudBay Minerals Inc. (TSX:HBM) is a Canadian integrated mining company with assets in North and Central America principally focused on the discovery, production and marketing of base metals. The company's objective is to increase shareholder value through efficient operations, organic growth and accretive acquisitions, all while maintaining its financial strength. A member of the S&P/TSX Composite Index and the S&P/TSX Global Mining Index, HudBay Minerals is committed to high standards of corporate governance and sustainability. |
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