RE: Copper and zinc up over 2%NP says HudBay awash in cash, plans note buyback
HudBay Minerals Inc (C:HBM)
Shares Issued 124,983,013
Last Close 11/23/2006 $19.60
Friday November 24 2006 - In the News
The National Post reports in its Friday edition that HudBay Minerals is raking in piles of cash thanks to record metals prices. The Post's Drew Hasselback writes in the Trading Desk column that, as a result, HudBay is offering to buy back $45.1-million (U.S.) in senior secured notes. Once the buyback closes on Dec. 20, Wellington West Capital Markets analyst Catherine Gignac estimates that HudBay will still have another $200-million (Canadian). HudBay plans to spend about $30-million (Canadian) on exploration over the next three years. Beyond that, Ms. Gignac says HudBay has several options for the remaining cash. The company could start paying dividends. Senior producers are offering dividends that yield about 2 per cent. If HudBay follows that pattern, it could pay about $32-million (Canadian) a year. HudBay may wish to consider an underground mining acquisition. Ms. Gignac thinks New Gold or Aurizon Mines would complement HudBay. If those options do not fit, HudBay should consider returning money to shareholders, says Ms. Gignac. Ms. Gignac rates HudBay "buy." She targets the stock at $25. HudBay stock closed up 60 Canadian cents at $19.60 (Canadian) in Toronto Thursday.
© 2006