Less than a month after a boardroom coup led by an overseas hedge fund installed a new slate of directors and management, HudBay Minerals Inc. has hired outside advisers to explore the miner's strategic options including a potential sale of the company.

HudBay chief executive officer Peter Jones confirmed that the zinc and copper producer has hired an investment bank to help it identify and evaluate potential acquisition targets for HudBay. It will also consider possible suitors for the company and its historic mining and smelting operations in and around Flin Flon, Man.

“We have hired investment bankers to assist us in the creation of a strategic plan,” Mr. Jones said yesterday.

HudBay is looking for ways to create value for shareholders that could include internal growth projects, acquisitions or a sale.

“Any strategic plan will look at all options and not one more than the other,” Mr. Jones said.

The Toronto-based zinc and copper producer is understood to have awarded a mandate to TD Securities last week after considering the credentials of several other investment banking firms, according to sources familiar with the situation. Mr. Jones would not identify the advisers.

Officials from TD's investment banking group would not comment.

HudBay chairman Wes Voorheis played down the likelihood of HudBay putting itself up for sale. Rather, he said the company has to be on the “radar screens” of international mining firms that could take a run at cash-rich HudBay, which has about $700-million on its balance sheet.

“We need to be ready for that,” Mr. Voorheis said in an interview.

HudBay's previous management and board had been in talks with potential buyers before they were ousted last month.

The company's previous CEO Allen Palmiere and board of directors stepped aside after a disastrous attempt to take over rival base metals miner Lundin Mining Corp. backfired. Investors revolted at the company's plan to double its share count to pay for the acquisition of cash-strapped Lundin without giving HudBay shareholders a vote on the deal.

HudBay's largest shareholder, SRM Global Master Fund LP, a hedge fund based in Monaco that owns 11 per cent of the company's shares, launched a proxy battle in response to the Lundin bid.

With support from other major shareholders including mutual fund manager Goodman & Co., SRM's slate of directors seized control of HudBay after winning the resignation of the board ahead of what would have been a humiliating defeat at a public meeting last month.

The former management team and board warned that SRM and its director slate would gut the company by initiating a major share buyback, special dividend or putting the company on the auction block.

Mr. Jones has said that HudBay will consider returning money directly to shareholders only after all other avenues of creating shareholder value have been exhausted.

Industry sources have identified state-controlled mining firms from China as potential suitors for HudBay.

The world's largest metals buyer is taking advantage of the worst commodities downturn in half a century, spending more than $20-billion in recent months to buy into mining companies and mineral deposits to secure metals supply at fire sale prices.

“It's game on … there are buyers for HudBay,” said an industry source close to the situation.

HudBay's battered shares have jumped 127 per cent so far this year following the resolution of the proxy battle and a rebound in copper prices. But the impressive returns aren't much better than some other base metals miners. First Quantum Minerals Ltd.'s stock has gained 119 per cent since Jan. 1 and Inmet Mining Corp. has added 82 per cent in the same period.

HudBay may still have difficulty completing an acquisition using its shares, which remain undervalued compared with its peers. The market prescribes a lower relative value for HudBay's assets compared with many other base metals miners.

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