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HudBay Minerals and Lundin Mining Agree to Terminate Arrangement Agreement

18:30 EST Monday, February 23, 2009

TORONTO, ONTARIO--(Marketwire - Feb. 23, 2009) - HudBay Minerals Inc. ("HudBay Minerals", "the company")(TSX:HBM) has entered into a termination agreement with Lundin Mining Corporation ("Lundin Mining") (TSX:LUN)(OMX:LUMI)(NYSE:LMC) whereby the companies have agreed to terminate the previously announced arrangement agreement in which HudBay Minerals agreed to acquire all of the outstanding shares of Lundin Mining, subject to the satisfaction of certain conditions (the "Transaction").

HudBay Minerals entered into the Transaction because it met the company's criteria for accretive acquisitions: long-term shareholder value creation, superior cash operating costs, long reserve life, enhanced production profile and geographical diversity. However, the company believes that, due to current market conditions, its shareholders will not approve the Transaction in the vote required by the Ontario Securities Commission's ("OSC") January 23, 2009 decision. The company has had very strong feedback from many of its shareholders indicating that they would vote against the Transaction. This negative shareholder sentiment is further evidenced by the market reaction to the announcement of the signing of the arrangement agreement and the subsequent rebound in HudBay Minerals' share price following the OSC's decision. In addition, HudBay Minerals' advisors have indicated that, based on discussions with significant and influential HudBay Minerals shareholders and their experience in similar situations, the shareholders of HudBay Minerals would not approve the Transaction if put to them.

"The decision to terminate the Transaction was not an easy one for the board," said Allen J. Palmiere, HudBay Minerals' chief executive officer. "However, after hearing from many of our shareholders over the last three months and considering the market reaction to the OSC decision, we believe this is in the best interests of the company and its stakeholders in the current circumstances. We remain financially strong, and are resolved to use our strengths to build HudBay Minerals into a Canadian globally diversified major base metals mining company."

HudBay Minerals will retain its 19.9% ownership stake in Lundin Mining that it acquired in December 2008. In consideration of terminating the Transaction and in recognition of HudBay Minerals' ownership position, HudBay Minerals received the following favourable concessions from Lundin Mining, which would not have been otherwise available to HudBay Minerals had the Transaction proceeded to a shareholder vote and was subsequently voted down:

- As long as HudBay Minerals owns ten per cent (10%) or more of the outstanding common shares of Lundin Mining, HudBay Minerals shall be entitled to have one nominee on the Board of Directors of Lundin Mining;

- As long as HudBay Minerals owns ten per cent (10%) or more of the outstanding common shares of Lundin Mining, HudBay Minerals shall have the right to maintain its then current level of ownership of the common shares of Lundin Mining in the event of any public or private distribution of Lundin Mining common shares by Lundin Mining, subject to certain limited exceptions;

- HudBay Minerals shall have a right of first offer in the event of any proposed sale or transfer of material assets of Lundin Mining during the six month period following the date of termination of the arrangement agreement; and

- Each of HudBay Minerals and Lundin Mining releases the other in respect of any and all claims arising from the arrangement agreement. Neither party will be liable for the payment of any termination fees to the other.

As a result of the agreement to terminate the Transaction, the company will not ask its shareholders to approve the Transaction at the previously announced special meeting of shareholders scheduled for March 25, 2009 ("the Meeting"). The business of the Meeting will be to consider the removal of HudBay Minerals' existing Board of Directors and elect a slate of replacement directors proposed by SRM Global Master Fund Limited Partnership. HudBay Minerals intends to mail a proxy circular with respect to the Meeting shortly.