Arizona Sonoran Secures C$19.9 Million with Hudbay Investment

Strategic Investment by Hudbay Minerals

Arizona Sonoran Copper Company Inc. (TSX:ASCU | OTCQX:ASCUF) is excited to announce a strategic investment that promises to bolster its growth initiatives. Hudbay Minerals Inc. (NYSE: HBM), a respected name in the mining sector, has stepped forward to subscribe for a substantial 11,852,064 common shares in a private placement deal. Each share is priced at C$1.68, culminating in an impressive total of C$19,911,467 for the investment. This influx of capital is expected to close on or around January 30, 2025, pending regulatory approvals and standard closing conditions.

Utilization of Funds

The proceeds from this private placement are earmarked for several critical initiatives. Key allocations include drilling, exploration activities, and technical studies associated with the advancement of the Cactus copper project. The project has shown promising potential and is geared towards establishing a consistent output of copper cathodes, ultimately contributing to the U.S. supply chain.

Ownership Implications for Hudbay

Upon completion of this transaction, Hudbay will hold a significant interest in Arizona Sonoran, amounting to 9.99% of the company's common shares. This strategic stake indicates Hudbay's confidence in the potential of Arizona Sonoran's upcoming projects, particularly Cactus.

Investor Rights Agreement Details

An investor rights agreement will accompany the private placement, establishing operational coherency between Hudbay and Arizona Sonoran. This agreement will grant Hudbay customary rights, enabling it to maintain its ownership percentage amid future equity financings and allowing it to participate actively in key company meetings.

Comments from Leadership

George Ogilvie, President and CEO of Arizona Sonoran, expressed his excitement about this partnership: "We welcome the endorsement from Hudbay. Our goal with the Cactus Project is to establish a prominent copper cathode producer in Arizona, and Hudbay's involvement enriches our team's capabilities with their vast experience in the mining industry."

Peter Kukielski, President and CEO of Hudbay, remarked, "This investment aligns with our strategy to enhance our footprint in tier-1 mining jurisdictions. We are proud to support the development of the Cactus copper project, which holds substantial potential."

Current Stake Overview

Before this private placement, Hudbay owned 2,870,800 shares of Arizona Sonoran, equating to a 2.12% ownership stake. After the placement, Hudbay's shareholding will substantially increase as its interest in the company evolves.

Future Outlook

Looking ahead, Arizona Sonoran aims to finalize the private placement by the end of January, subject to necessary approvals from relevant regulatory bodies. The common shares from this investment will carry a statutory hold period in line with current securities regulations.

The financial and legal aspects of the private placement are being managed by Scotiabank and Bennett Jones LLP, respectively. Their expertise will ensure that this transition into a strengthened financial position occurs smoothly.

About Arizona Sonoran Copper Company

Arizona Sonoran is focused on copper exploration and development, proudly holding a 100% interest in the Cactus Project. The project site is not only strategically located but also features a vast porphyry copper resource. The development of Cactus is poised to transform the company into a mid-tier copper producer. By leveraging existing infrastructure, the project promises not only a robust economic return but also a commitment to sustainability and responsibility towards the community and stakeholders.

Frequently Asked Questions

1. What is the amount of the investment from Hudbay?

Hudbay is investing C$19.9 million in Arizona Sonoran through a strategic private placement.

2. What will the funds from the investment be used for?

Funds will primarily be allocated for drilling, exploration, technical studies, and progression of the Cactus copper project.

3. How much of Arizona Sonoran will Hudbay own post-investment?

Following the investment, Hudbay will own approximately 9.99% of Arizona Sonoran's common shares.

4. When is the expected closing date for the investment?

The private placement is expected to close on or around January 30, 2025, subject to regulatory approvals.

5. What is the significance of the investor rights agreement?

The investor rights agreement will provide Hudbay with rights to maintain its ownership percentage and to participate in governance activities of Arizona Sonoran.

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