Hudbay's Arizona Acquisition Poised to Create Major Copper District and Double Production

Strategic Expansion Makes Hudbay a Force in North American Copper

Hudbay Minerals (TSX, NYSE: HBM) is set to acquire Arizona Sonoran Copper Company, consolidating ownership of the Cactus project and establishing the third largest copper district in North America. This strategic move comes as part of Hudbay’s drive to scale up its U.S. copper operations, as increasing demand for domestically produced critical minerals puts a premium on American-sourced copper.

The acquisition includes a significant stake in the Cactus project, which joins forces with Hudbay's adjacent Copper World development. Once fully integrated, the combined Arizona hub is projected to more than double Hudbay’s annual copper output from approximately 125,000 tonnes today to over 250,000 tonnes by 2030—with the potential to grow even further with continued optimization.

Deal Details Deliver Compelling Value and Scale for Shareholders

Arizona Sonoran shareholders will receive 0.242 of a Hudbay share for each share owned, implying a C$9.35 value per ASCU share and a 30% premium over the closing price as of February 27, 2026. The all-share transaction, valuing Arizona Sonoran at a US$1.48 billion equity stake, will see existing Hudbay and ASCU shareholders own approximately 89% and 11% of the merged entity, respectively.

Alongside the immediate premium, ASCU shareholders get ongoing exposure to the Cactus project's growth and Hudbay’s broader portfolio, which is already generating significant free cash flow. Hudbay’s strong capital markets profile and diversified North American operations enhance shareholder value and reduce financing risks for the combined projects.

Operational and Regional Synergies Strengthen U.S. Copper Pipeline

The union of Copper World and Cactus unlocks operational efficiencies and regional synergies—such as shared development teams, utilization of by-products like sulphuric acid across sites, and an estimated $5 to $10 million in annual cost synergies. Hudbay's proven track record in the Arizona mining jurisdiction further de-risks project development and positions the company as a steady domestic source of refined copper cathode, critical for meeting U.S. industrial demand and supply chain policies.

This acquisition also expands Hudbay’s industry-leading growth pipeline, setting the stage for further output expansion and securing its place among the continent's top copper producers.

Transaction Terms and Shareholder Path Forward

The transaction, structured as a court-approved plan of arrangement, awaits regulatory and shareholder approvals. The key steps include a special meeting for ASCU securityholders (expected May 2026), and regulatory clearance on both sides of the border, with closing anticipated in Q2 2026. Once complete, Arizona Sonoran shares will be de-listed and the merged group will debut as a copper powerhouse.

The boards of both companies have unanimously approved the deal, with fairness opinions supporting the value proposition for ASCU shareholders. The particulars and rationale will be detailed in publicly filed documents ahead of the shareholder vote, and stakeholders are encouraged to review these closely.

Hudbay Emerges as a Leading U.S. Copper Producer

With this acquisition, Hudbay strengthens its position as a premier Americas-focused copper company, boasting a pipeline of long-life, low-cost assets in Canada, Peru, and the U.S. The expanded Arizona hub will be among the most significant copper districts on the continent, supporting strategic U.S. supply chains and offering a blueprint for sustainable, large-scale mineral development.

As copper demand continues to climb, Hudbay's new Arizona platform sets the company and its shareholders on a path toward industry leadership and robust long-term growth, while advancing critical minerals supply crucial to the North American economy.

Conference Call Information

Hudbay and Arizona Sonoran stakeholders can follow the transaction’s progress and listen in on the upcoming joint conference call to learn more about the strategic vision for America’s next copper giant.

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