cnw


HUDBAY'S COMBINED ANNUAL COPPER PRODUCTION EXPECTED TO INCREASE BY
APPROXIMATELY 145% FROM 2011 LEVELS


Editors Note: All amounts listed are in Canadian dollars unless
otherwise indicated


Highlights



Norsemont shareholders will receive 0.2617 HudBay shares and $0.001 in
cash, or $4.50 in cash, subject to a maximum aggregate cash
consideration of $130 million.




HudBay's offer represents a premium of 33%(1), based on the volume weighted average trading prices of HudBay and
Norsemont on the TSX for the 20 trading days ended January 7, 2011 of
$17.76 and $3.49, respectively.




Norsemont's Constancia copper project has excellent infrastructure in an
established mining district in Peru.




HudBay's future combined copper production is expected to grow by
approximately 145% between 2011 and 2016, as a result of bringing
Constancia into full production. Constancia will also contribute to
HudBay's gold equivalent production, which is expected to increase 130%
during the same period(2).




The Norsemont acquisition is expected to increase HudBay's mineral
exposure on a per share basis and is expected to deliver per share
growth in HudBay's net asset value and long term earnings and cash
flow.




The transaction is consistent with HudBay's strategy of acquiring
porphyry or VMS deposits with exploration upside in mining-friendly
jurisdictions in the Americas, with the opportunity to add value
through exploration, mine development and operational expertise.




With $1.2 billion of available cash and credit lines, and strong cash
flow from existing operations, HudBay is in an excellent position to
finance construction of the Constancia project.





(1)


Assuming holders of Norsemont's outstanding common shares elect to
receive the maximum number of HudBay shares issuable in connection with
the bid.





(2)


Anticipated production for 2011 based on midpoint of forecasted
production released on December 13, 2010. Anticipated production for
2016 is based on existing mines together with Constancia, Lalor
(including, for gold equivalent production, inferred resources and
conceptual gold and copper-gold zones) and the 777 North expansion.
Constancia 2016 expected production sourced from preliminary results of
the optimization study released by Norsemont on December 30, 2010.
Silver converted to gold equivalent at 60:1 ratio.





TORONTO, Jan. 10 /CNW/ - HudBay Minerals Inc. ("Hu

dBay") (TSX:HBM) (NYSE:HBM) and Norsemont Mining Inc. ("Norsemont")
(TSX:NOM) (BVL:NOM) announced today that they have entered into an
agreement pursuant to which HudBay has agreed to acquire all of the
outstanding common shares of Norsemont ("Norsemont Shares") that HudBay
does not already own by way of formal take-over bid. The transaction values the equity of
Norsemont at approximately $520 million, on a fully-diluted basis.


Terms of the Transaction



Pursuant to the take-over bid, holders of Norsemont Shares who tender
their shares to the bid and elect to receive the maximum equity
consideration will receive consideration with a value of $4.65 per
share, based on the volume weighted average trading price on the
Toronto Stock Exchange ("TSX") for the 20 trading days ended January 7,
2011 of $17.76 per HudBay common share ("HudBay Share").






The consideration to be paid pursuant to HudBay's bid represents a
premium of 33% (assuming election of maximum equity consideration),
based on the volume weighted average trading price of the Norsemont
Shares on the TSX for the 20 trading days ended January 7, 2011 of
$3.49 per share.






Under HudBay's bid, holders of Norsemont Shares will have the ability to
elect, on an individual basis, to receive 0.2617 HudBay Shares and
$0.001 in cash, $4.50 in cash, or a combination of cash and HudBay
Shares (with the share consideration based on a price per HudBay Share
of $17.19), subject to proration necessary to effect maximum aggregate
cash consideration of $130 million. This will provide an opportunity
for Canadian holders of Norsemont Shares to defer Canadian tax that
otherwise might be payable as a result of their acceptance of the bid.






The election mechanism benefits Norsemont shareholders by providing an
embedded option between the announcement and shortly before the closing
date of the transaction that effectively underpins the value of the
share consideration while providing upside potential.






Assuming HudBay acquires all of the Norsemont Shares pursuant to the bid
(and assuming holders of Norsemont Shares elect to receive the maximum
number of HudBay Shares issuable in connection with the bid) current
holders of HudBay Shares will represent approximately 83% of the
outstanding HudBay Shares and the former holders of Norsemont Shares
will represent approximately 17% of the outstanding HudBay Shares.






The boards of directors of Norsemont, upon the recommendation of a
Special Committee of the board, and HudBay have approved HudBay's
acquisition of Norsemont pursuant to the bid. The board of directors of
Norsemont is recommending that holders of Norsemont Shares tender their
Norsemont Shares to HudBay's bid.






Officers, directors and other shareholders of Norsemont holding
approximately 34.4% of the Norsemont Shares, on a fully-diluted basis,
have entered into lock-up agreements with HudBay under which they have
agreed to tender their Norsemont Shares to the bid. Together with
HudBay's 1.1% interest, these shares represent approximately 35.6% of
the fully-diluted Norsemont Shares.



Norsemont owns 100% of the Constancia copper project in southern Peru.
As of September 2009, the Constancia project had proven and probable
mineral reserves containing 277 million tonnes grading 0.43% copper,
0.012% molybdenum, 0.05 g/t gold and 3.7 g/t silver. Based on the
preliminary results of the optimization study released on December 30,
2010, the proposed Constancia project is expected to produce annually
172 million pounds of copper and 2 million pounds of molybdenum in
concentrate at attractive cash costs over a 15 year mine life.


"This transaction helps solidify HudBay's position as one of the leading
mid-tier mining companies with an enhanced growth pipeline in stable,
mining-friendly jurisdictions," said David Garofalo, President and
Chief Executive Officer of HudBay. "Our reliable operations in low-risk
jurisdictions combined with our strong financial position complement
our ability to execute a focused growth strategy of acquiring porphyry
and VMS deposits with exploration upside in the Americas."


"Bringing Constancia into operation will significantly increase HudBay's
copper production and contribute to HudBay's precious metals production
growth. In addition, this acquisition is expected to increase our
mineral exposure on a per share basis, and deliver per share growth in
net asset value and long term earnings and cash flow," added Mr.
Garofalo. "Our offer permits Norsemont's shareholders to continue to
participate in the development of the Constancia project with the added
benefit of exposure to HudBay's profitable operations and world class
Lalor development project."


"HudBay is a highly respected mining company with a long record of more
than 80 years of successful base metals mining and processing
operations in Canada," said Patrick Evans, Chief Executive Officer of
Norsemont. "With its strong balance sheet and exceptional technical
expertise HudBay is well placed to accelerate the development of the
Constancia project far sooner than Norsemont could have achieved
independently. The HudBay offer provides Norsemont shareholders with an
attractive opportunity to continue to participate in Constancia's
success without the dilution that the independent funding of
Constancia's development would have required."


"Besides presenting Norsemont shareholders with an exciting
diversification and growth opportunity, Peru will benefit significantly
through HudBay's participation in that country's well-established and
rapidly growing mining industry," added Mr. Evans.


Benefits to HudBay Shareholders


The transaction is expected to provide the following benefits to the
holders of HudBay Shares:



Constancia is an attractive copper project with excellent infrastructure
in an established mining district. HudBay's future combined copper
production is expected to grow by approximately 145% between 2011 and
2016, as a result of bringing the project into full production.






The transaction will increase HudBay's mineral exposure on a per share
basis and is expected to be accretive to HudBay's net asset value per
share as well as long-term earnings and cash flow per share;






The transaction will enhance HudBay's position as a leading mid-tier
mining company with increasing leverage to both base and precious
metals for its shareholders;






The combined company will have a robust portfolio of long-life assets
with low cash costs and significant copper, gold and zinc production
growth;






HudBay has significant financial resources to finance the strong
development pipeline of the combined companies, including highly
prospective projects such as Constancia and HudBay's Lalor project in
northern Manitoba; and,






The transaction is consistent with HudBay's strategy, which includes a
focus on porphyry and VMS deposits with exploration upside in the
Americas, with the opportunity to add value through technical expertise
and financial capacity.



Benefits to Norsemont Shareholders


The transaction is expected to provide the following benefits to the
holders of Norsemont Shares:



Delivery of an attractive and immediate premium;






Tax-deferral opportunity for Canadian holders of Norsemont Shares, with
the option to elect significant cash consideration;






Realize Constancia's full production potential by leveraging HudBay's
development expertise;






Minimal dilution since HudBay can fund Constancia through existing
financial resources;






Diversification benefits through HudBay's portfolio of producing mines
and development projects; and,






Participation in a high-growth, mid-tier mining company.



The Special Committee of the board of directors of Norsemont was advised
by Cutfield Freeman & Co. Ltd. ("Cutfield Freeman"), as financial
advisor, and Fraser Milner Casgrain LLP, as legal advisor. Cutfield Freeman and Wellington West Capital Markets
Inc. have provided opinions to the Special Committee and board of
directors of Norsemont that, as of January 9, 2011, the consideration
to be received by holders of Norsemont Shares under HudBay's take-over
bid is fair, from a financial point of view, to the holders of
Norsemont Shares (other than HudBay and its affiliates). A copy of each
fairness opinion, the factors considered by the board of directors and
its Special Committee in recommending that holders of Norsemont Shares
tender their Norsemont Shares to HudBay's bid, and other relevant
background information, will be included in the directors' circular
that will be sent to the holders of Norsemont Shares in connection with
the bid.


RBC Capital Markets is acting as financial advisor to HudBay in
connection with the transaction. Goodmans LLP is legal counsel to
HudBay and Minvisory Corp. is acting as HudBay's strategic advisor.


HudBay has retained Kingsdale Shareholder Services Inc. to act as both
its Information Agent and Depositary in connection with the Offer.


The support agreement that has been entered into by Norsemont and HudBay
contains customary "non-solicitation" provisions that permit the board
of directors of Norsemont to terminate the support agreement and enter
into an agreement in respect of an unsolicited, superior proposal under
certain circumstances, subject to, among other things, "matching
rights" in favour of HudBay and payment of a termination payment of
$21.6 million.


Full details of the offer will be included in HudBay's take-over bid
circular, which is expected to be mailed to holders of Norsemont Shares
before the end of the month. The bid will be open for acceptance for a
period of not less than 35 days and will be subject to certain
customary conditions (which may be waived by HudBay in its discretion),
including there being deposited under the take-over bid and not
withdrawn at the expiry time of the take-over bid such number of
Norsemont Shares that represent at least 50% (calculated on a
fully-diluted basis) plus one of the Norsemont Shares.


Copies of the support agreement, take-over bid circular, directors'
circular, and certain related documents will be filed with securities
regulators and will be available at the Canadian SEDAR website at >www.hudbayminerals.com





Dial in: 416-644-3414 or 1-800-814-4859





Replay: 416-640-1917 or 1-877-289-8525





Replay Passcode: 4400540#









Media Conference Call


Members of the media are invited to participate on a conference call
with HudBay management to discuss the transaction.







Date: Monday, January 10, 2011





Time: 10:30 a.m. ET





Dial in: 416-644-3415 or 1-877-974-0445





Replay: 416-640-1917 or 1-877-289-8525





Replay Passcode: 4400548#









HudBay Minerals Inc.


HudBay Minerals Inc. (TSX:HBM) (NYSE:HBM) is a Canadian integrated
mining company with assets in North and Central America principally
focused on the discovery, production and marketing of metals. The
company's objective is to maximize shareholder value through efficient
operations, organic growth and accretive acquisitions, while
maintaining its financial strength. A member of the S&P/TSX Composite
Index and the S&P/TSX Global Mining Index, HudBay is committed to high
standards of corporate governance and sustainability.




Norsemont Mining Inc.


Norsemont Mining Inc. (TSX:NOM) (BVL:NOM) is a Canadian mineral
exploration and development company focused on the 100
percent-controlled Constancia Cu-Mo-Ag-Au deposit in southern Peru.
Norsemont's Constancia project is located approximately 100 kilometres
south of Cusco, Peru. Results of an independent definitive feasibility
study on the Constancia deposit were announced in September 2009.
Please refer to the Company's website for the full 43-101 Technical
Report.


Questions and requests for assistance may be directed to the Information
Agent and Depositary for the Offer, Kingsdale Shareholder Services
Inc., at 1-800-775-3159 toll free in North America, or at 416-867-2272
outside of North America, or by e-mail at contactus@kingsdaleshareholder.com.




Qualified Person




Robert. W. Baxter (MAusIMM), the President, COO and a director of
Norsemont is a qualified person within the meaning of National
Instrument 43-101, and has reviewed and approved the scientific and
technical information referred to in this news release.


Forward-Looking Information


Certain of the statements made and information contained herein may
contain forward-looking statements or forward-looking information
within the meaning of applicable securities laws, including the
anticipated timing of the transaction and the anticipated impact of the
transaction on HudBay and Norsemont. Forward-looking information is
based on the views, opinions, intentions and estimates of management at
the date the information is made, and is based on a number of
assumptions and subject to a variety of risks and uncertainties and
other factors that could cause actual events or results to differ
materially from those anticipated or projected in the forward-looking
information (including the actions of other parties). Many of these
assumptions are based on factors and events that are not within the
control of HudBay or Norsemont and there is no assurance they will
prove to be correct. The timing and completion of the proposed
transaction is subject to customary conditions, termination rights and
other risks and uncertainties. Accordingly, there can be no assurance
that the proposed transaction will occur, or that it will occur on the
timetable or on the terms and conditions contemplated. The proposed
transaction could be modified, restructured or terminated. There can
also be no assurance that the strategic benefits and competitive,
operational and cost efficiencies expected to result from the
transaction will be fully realized. There can be no assurance that
forward-looking information will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such information. HudBay and Norsemont undertake no
obligation to update forward-looking information except as required by
applicable securities laws, or to comment on analyses, expectations or
statements made by third parties. The reader is cautioned not to place
undue reliance on forward-looking information.


This press release does not constitute an offer to buy any securities or
a solicitation of any vote or approval or a solicitation of an offer to
sell any securities.


All amounts listed are in Canadian dollars unless otherwise indicated.


Note to U.S. Investors


Information concerning the mineral properties of HudBay and Norsemont
has been prepared in accordance with the requirements of Canadian
securities laws, which differ in material respects from the
requirements of SEC Industry Guide 7. Under SEC Industry Guide 7,
mineralization may not be classified as a "reserve" unless the
determination has been made that the mineralization could be
economically and legally produced or extracted at the time of the
reserve determination, and the SEC does not recognize the reporting of
mineral deposits which do not meet the SEC Industry Guide 7 definition
of "Reserve". In accordance with National Instrument 43-101 - Standards
of Disclosure for Mineral Projects ("NI 43-101") of the Canadian
Securities Administrators, the terms "mineral reserve", "proven mineral
reserve", "probable mineral reserve", "mineral resource", "measured
mineral resource", "indicated mineral resource" and "inferred mineral
resource" are defined in the Canadian Institute of Mining, Metallurgy
and Petroleum (the "CIM") Definition Standards for Mineral Resources
and Mineral Reserves adopted by the CIM Council on December 11, 2005.
While the terms "mineral resource", "measured mineral resource",
"indicated mineral resource" and "inferred mineral resource" are
recognized and required by NI 43-101, the SEC does not recognize them.
You are cautioned that, except for that portion of mineral resources
classified as mineral reserves, mineral resources do not have
demonstrated economic value. Inferred mineral resources have a high
degree of uncertainty as to their existence and as to whether they can
be economically or legally mined. Under Canadian securities laws,
estimates of inferred mineral resources may not form the basis of an
economic analysis. It cannot be assumed that all or any part of an
inferred mineral resource will ever be upgraded to a higher category.
Therefore, you are cautioned not to assume that all or any part of an
inferred mineral resource exists, that it can be economically or
legally mined, or that it will ever be upgraded to a higher category.
Likewise, you are cautioned not to assume that all or any part of
measured or indicated mineral resources will ever be upgraded into
mineral reserves. For more information on the technical terms as they
are used under NI 43-101, please see Schedule A "Glossary of Mining
Terms" of HudBay's Annual Information Form for the fiscal year ended
December 31, 2009, available on SEDAR at
filed on October 19, 2010 (File No. 001-34244).






For further information: John Vincic, Vice President, Investor Relations & Corporate Communications HudBay Minerals Inc. Tel: 416-362-0615 john.vincic@hudbayminerals.com Patrick Evans Chief Executive Officer Norsemont Mining Inc. Tel: 416-408-4088 investors@norsemont.com
Further Information for Norsemont Mining Shareholders: Kingsdale Shareholder Services Inc. Toll Free 1-800-775-3159 (English or French) Outside North America, Bankers and Brokers Call Collect: 416-867-2272 Facsimile: 416-867-2271, Toll Free Facsimile: 1-866-545-5580 Email: contactus@kingsdaleshareholder.com