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TORONTO,
ONTARIO--(Marketwire - March 13, 2009) - HudBay Minerals Inc. ("HudBay",
"the company") (TSX:HBM) announces that Glass Lewis &
Co., a leading independent proxy advisory firm owned by Ontario
Teachers Pension Plan and whose recommendations are relied upon by
hundreds of clients worldwide, formally recommends that shareholders
vote against SRM Global Master Fund Limited Partnership's
("SRM") resolution to remove HudBay's current board of
directors.
In recommending that HudBay shareholders vote AGAINST SRM's resolution,
Glass Lewis states that:
- "We are concerned that the replacement of the entire board is a
drastic step that could disrupt the board and/or management's
operations, depriving the Company of much-needed leadership amid a
major financial downturn."
- "Further, we are concerned that the Dissident has failed to
outline a substantial strategic plan for improvement at the Company,
other than appointing Dissident nominee (Peter) Jones as CEO. Instead,
the Dissident reports that such a plan could only be finalized after
the Dissident nominees were elected to the board and provided with
access to requisite information regarding the Company. As such, we do
not believe the Dissident has provided any reason to believe that its
own strategy would yield better results for the company's performance
than management's current strategy."
- "In our view, giving the Dissident one or two seats on the board
(out of a total of eight board seats) would be more appropriately
aligned with the Dissident's equity interest in the Company."
- "We believe that incumbent management, with access to more and
better information regarding the company, should be given the benefit
of the doubt regarding strategic business directions."
Glass Lewis & Co. concluded that:
- "...the removal of the entire board at this time could
potentially disturb the Company's operations and have a detrimental
impact on shareholder value. Accordingly, we recommend that
shareholders vote AGAINST this proposal on the Company's BLUE proxy
card."
"We are pleased that Glass Lewis & Co., after a careful review
of the facts, supports our position that shareholders vote against the
SRM resolution," said Colin K. Benner, Interim CEO of HudBay
Minerals. "This independent recommendation reaffirms our belief
that we have the right strategy to create value for all of our shareholders.
We urge all HudBay shareholders to vote their blue proxy against the
SRM resolution to prevent its hand-picked slate of nominees from
seizing control of your company."
HudBay further announces that it has made available an updated
presentation that refutes SRM's claims and raises additional questions
about the foreign hedge fund's ongoing motives in its attempt to
acquire control of HudBay. The presentation is posted to the company's
website at www.hudbayminerals.com.
SRM's circular relies on half-truths, innuendo and selective disclosure
of the facts to further mislead HudBay's shareholders. For example SRM
criticizes HudBay's acquisition of Skye Resources Inc.
("Skye"), even though SRM supported the transaction when it
was announced. In fact, SRM went so far as to advocate for support of
the transaction on management's behalf, as noted in correspondence
between SRM and HudBay:
"Our line is that the (Skye acquisition) is a good move for the
company and we support the growth strategy."
- A June 24, 2008 email from SRM to HudBay.
"We fully support the Company's highly accretive actions in the
development of Laylor (sic) Lake, further exploration in the Flin Flon
belt and the acquisition of Skye's Fenix Nickel Project in
Guatemala."
- A July 30, 2008 letter from SRM to HudBay.
Although SRM claims to advocate for shareholders, this is little more
than posturing. Unlike SRM, HudBay's current Board of Directors is
committed to governance leadership in Canada. It plans to introduce
amendments to the Company's bylaws that address shareholder concerns
and enhance its governance practices. SRM has made no such commitment.
In addition, SRM's circular selectively quotes from GMP Securities LP's
("GMP") evaluation of HudBay's now-terminated acquisition of
Lundin Mining Corporation, but neglects to inform shareholders that the
results quoted in the circular were from "stress test"
scenarios requested by HudBay's Board of Directors. The "stress
test" was intended to assess the ability of the combined company
to weather an extended period of depressed base metal prices in a
prolonged economic downturn. What SRM fails to mention is that the
results using consensus expectations support GMP's fairness opinion.
SRM goes on to suggest that GMP was unable to render a valid opinion as
it did not have access to enough information about HudBay, an
allegation that is blatantly false. HudBay disclosed to GMP all
information relevant to its fairness opinion.
HudBay believes SRM still has not been forthright and transparent about
its true intentions for the company. SRM rejected HudBay's compromise
offer of two board seats, which is completely reasonable for a 10%
shareholder. HudBay's only condition in making this offer was that SRM
would effectively agree to cease its hostilities towards HudBay.
HudBay's current Board of Directors continues to believe SRM's
objective is to gain control of HudBay without compensating the
company's shareholders.
HudBay will host a conference call on Monday, March 16, 2009 at 10:00
a.m. ET in which Mr. Benner will review HudBay's corporate strategy and
answer questions about his interim appointment (please see details
below):
Conference Call and Webcast Date: Monday, March 16, 2009 Time: 10:00 a.m. (Eastern Time) Webcast: www.hudbayminerals.com Dial in: 416-644-3424 or 800-732-0232 Replay: 416-640-1917 or 877-289-8525 Replay Passcode: 21301062#
The conference call replay will be available
until midnight (Eastern Time) on March 25, 2009. An archived audio
webcast of the call also will be available on HudBay Minerals' website.
HudBay's current Board of Directors haslkurges shareholders to vote the
BLUE proxy AGAINST the resolution to remove the current HudBay Board of
Directors and replace them with nominees of SRM at the company's
special meeting of shareholders scheduled for 10:00 a.m. ET on March
25, 2009 at the Design Exchange in Toronto.
(i) Permission to quote from Glass Lewis & Co. was neither sought
nor obtained.
Voting Instructions for BENEFICIAL (NON-REGISTERED) SHAREHOLDERS
If your common shares are held in a brokerage account a BLUE voting
instruction form or BLUE proxy was mailed to you. Only vote the BLUE
voting instruction form or BLUE proxy as follows:
Canadian Shareholders: Visit www.proxyvote.com and
enter your 12 digit control number or call 1-800-474-7493 or fax your
BLUE proxy to (905) 507-7793 or toll free at 1-866-623-5305 to ensure
it is received before the deadline.
U.S. Shareholders: Visit www.proxyvote.com and
enter your 12 digit control number or call 1-800-454-8683.
Voting Instructions for REGISTERED SHAREHOLDERS
If the common shares are held in your own name, fax the BLUE proxy to
Equity Transfer & Trust Company at 416-595-9593 or Kingsdale at
416-867-2271 or 1-866-545-5580 or visit www.voteproxyonline.com and
enter your control number.
For assistance in voting your BLUE proxy, please contact HudBay's proxy
solicitation agent, Kingsdale Shareholder Services Inc., at toll-free
1-866-581-0508 or 1-416-867-2272.
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.
Forward Looking Information
This news release and its attachments contain "forward-looking
information" within the meaning of applicable securities laws.
Forward looking information includes but is not limited to information
concerning the shareholders' meeting scheduled for March 25, 2009, the
intentions of SRM, and the strategy and intentions of HudBay and its
board of directors. Generally, forward-looking information can be
identified by the use of forward-looking terminology such as
"plans", "expects", or "does not expect",
"is expected", "budget", "scheduled",
"estimates", "forecasts", "intends",
"anticipates", "understands" or "does not
anticipate", or "believes" or variations of such words
and phrases or statements that certain actions, events or results
"will", "may", "could", "would",
"might", or "will be taken", "occur", or
"be achieved". 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 who have agreed to do certain things and
the approval of certain regulatory bodies).
Many of these assumptions are based on factors and events that are not
within the control of HudBay and there is no assurance they will prove
to be correct. Factors that could cause actual results or events to
vary materially from results or events anticipated by such forward-looking
information include court and/or other regulatory approval, action by
an intervening party or parties, future agreements reached with third
parties, changes in market conditions, variations in ore grade or
recovery rates, risks relating to international operations, fluctuating
metal prices and currency exchange rates, changes in project
parameters, the possibility of project cost overruns or unanticipated
costs and expenses, labour disputes and other risks of the mining
industry, failure of plant, equipment or processes to operate as
anticipated as well as those risk factors discussed in the Annual
Information Form for the year ended December 31, 2007, and as contained
in the Management Discussion and Analysis for the three and nine month
period ended September 30, 2008, which risks may cause actual results
to differ materially from any forward-looking statement.
Although HudBay has attempted to identify important factors that could
cause actual actions, events or results to differ materially from those
described in forward-looking information, there may be other factors
that cause actions, events or results not to be anticipated, estimated
or intended. 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
undertakes no obligation to update forward-looking information if
circumstances or management's estimates or opinions should change
except as required by applicable securities laws. The reader is
cautioned not to place undue reliance on forward-looking information.
This news release and the information contained herein does not
constitute an offer of securities for sale in the United States and
securities may not be offered or sold in the United States absent
registration or exemption from registration.
(HBM-P)
(HBM-G)
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