BASE METALS

HudBay Minerals looking for new CEO, acquisitions

According to the company's acting CEO Warren Holmes, the search for a new CEO has taken longer than expected

Posted: Thursday , 06 May 2010

TORONTO (Reuters) - 

HudBay Minerals (HBM.TO: Quote) is looking for acquisitions, even as it struggles to find a new chief executive to replace Peter Jones, who stepped down late last year, the company's acting CEO said on Wednesday.

Speaking on a conference call, Warren Holmes said the search for a new CEO has taken longer than expected, but he reiterated the company's desire to use its C$900 million ($874 million) cash hoard for expansion.

"We continue to look at opportunities for acquisitions. We're focused very much on copper zinc opportunities in North America in particular, but also South America, and when we have progress to report on that area, we shall do so," he said.

HudBay's shares were down 6.8 percent at C$11.21 after it reported a weaker than expected first-quarter profit late on Tuesday.

The company has been seen as a possible buyer for Anglo American's (AAL.L: Quote) $1 billion-plus zinc business. which Anglo is selling as part of an asset disposal program.

HudBay officials did not address the Anglo assets on the conference call.

HudBay attempted to take over rival Lundin Mining (LUN.TO: Quote) in late 2008, but ran into opposition from its own shareholders and eventually abandoned the deal.

That failure led to the departure of then-CEO Allen Palmiere. He was replaced by Peter Jones, who promised to seek acquisitions and drive organic growth, but he stepped down in December.

Holmes had been hoping to announce a replacement by April, but said HudBay would take the time necessary to find the "right" person for the job.

"It will be when it will be," he said.

Holmes also said the company was still looking for a joint-venture partner for its $1 billion Fenix nickel project in Guatemala. HudBay acquired the project in mid-2008, but soon after halted its development due to plunging nickel prices.

HudBay has not yet made a decision to proceed with construction, but Holmes said he expects it will be built eventually.

"I am convinced that this is going to be a mine, and we are doing the work ... to improve the economics of the project," he said.

Company officials said the partnership for Fenix could include an offtake agreement for the nickel.

($1=$1.03 Canadian) (Reporting by Cameron French)

© Thomson Reuters 2010 All rights reserved