Vancouver's Skye Resources inc. (TSX:SKR) plans to merge with Toronto's HudBay Minerals Inc. (TSX:HBM) in an all-share deal worth approximately $460.3 million.
Skye shareholders will receive 0.61 HudBay share for each of their Sky common shares, representing a 35% premium over Sky's 20-day volume weighted average trading price.
HudBay shares closed at $14.79 June 20.
The deal will give HudBay the Fenix Nickel Project in Guatemala, Skye's main development project with 41.4 million tonnes of reserves, which has been delayed due to the challenges Skye has had in obtaining financing. HudBay, on the other hand, has $758 million in cash.
Upon completion of the transaction, Skye shareholders will own approximately 20.3% of the new HudBay.
As part of the deal, HudBay will pay Skye $95.2 million in a private placement of 12.7 million Skye shares. Proceeds will be used to ramp up full engineering, procurement and construction at the Fenix Project.
Skye's share price range during the past week: between $7.47 and $7.72; 52-week high: $17.20; 52-week low: $3.85.