HudBay Minerals Inc. (HBM-T10.88-0.28-2.51%) and VMS Ventures Inc. (VMS-X0.21----%) are forming a joint venture to develop properties in the Flin Flon area of Manitoba, , the companies announced Tuesday.
HudBay, which has other mining and processing operations in northern Manitoba, will be the operator of the joint venture and have exclusive rights to buy and market the ore produced at the copper-rich properties.
VMS, which has several properties adjacent to HudBay's Reed Lake property, will own 30 per cent of the joint venture and HudBay will own the rest.
HudBay will make a $2.6-million cash payment to VMS and VMS will transfer its southern claims to the joint venture.
HudBay also has the right to earn a 70 per cent interest in four adjacent claim parcels held by VMS over the next two to three years, at which time a new joint venture would be created as a successor to the Reed Lake joint venture.
“We are very pleased to be entering into a joint venture with VMS Ventures and we are optimistic that the Reed Lake property can be developed into a source of copper feed for our Flin Flon concentrator,” said Warren Holmes, HudBay's executive vice-chairman and interim chief executive officer.
“We intend to commence drilling on the Reed Lake property as soon as possible and we are also looking forward to conducting exploration on a number of promising targets on the option properties.”
