HudBay Chief Exec. Allen Palmiere saidhe was not too surprised by the market's reaction to the deal, but said the takeover was necessary to expand and diversify HudBay's assets beyond the company's operational center in Manitoba's Flin Flon greenstone belt. "Mining companies can only be made so efficient.
What really dictates the economics are the quality of the ore reserves."
https://www.stockhouse.com/Bullboards/MessageDetail.aspx?s=HBM&t=list&m=23843815&l=0&pd=0&r=0
There's nobody posting on any message board anywhere that has a better understanding or had a better opportunity to value what Lundin has to offer than the man who made the offer.
"With Lundin, HudBay will acquire five operating mines, including the lucrative Neves-Corvo copper and zinc operation in Portugal and the Zinkgruvan mine in Sweden, as well as a 25 percent stake in the massive Tenke-Fungurume copper deposit being developed in the Democratic Republic of Congo."
"Palmiere, however, said
the combined company should be cash flow positive if metal prices stay at current levels."
"The cheap price paid for Lundin illustrates just how dramatic the selloff in mining stocks has been of late."
This guy is a career mining industry bean counter.
Mr. Palmiere is a Chartered Accountant, and has served in senior management financial supervisory capacities in the mining industry most of his career. In the past, Mr. Palmiere has been Treasurer of Northgate Exploration Ltd.; Chief Executive Officer and Chief Financial Officer of Breakwater Resources Ltd.; Chief Financial Officer of Zemex Corporation and Executive Chairman of Barplats Investments Limited.
Obviously it's wise to be shopping down here at multi-year lows and so what if Lundin isn't exactly the cream of the crop. They're cheap in part out of desperation as well as this market brutality and panic.
Long term this is golden. Short term, in this market, who knows.