HudBay Minerals has sold 100% of its 98.2% interest in the Fenix ferronickel project in eastern Guatemala to the Solway Group. HudBay received $140 million in cash at closing in early September 2011 and will receive an additional $30 million upon satisfaction of certain conditions during the course of Solway’s development of the project.
Solway is a Russian private investment group that has its headquarters at Larnaca, Cyprus. Its businesses include the Pobugsky ferronickel plant in Ukraine and the Sasa zinc-lead mine and Buchim copper mine in the Republic of Macedonia.
HudBay President and CEO David Garofalo said, “While we believe Fenix is a robust project that warrants development, the project does not fit our strategy of focusing on VMS and porphyry deposits. We believe the sale proceeds will further strengthen our balance sheet as we develop our Lalor and Constancia projects. We are also pleased to see the project in the hands of an experienced ferronickel operator, such as the Solway Group, which is committed to the development of Fenix.”
The Fenix project has been on care and maintenance since 1980. HudBay acquired it as a result of its business combination with Skye Resources in August 2008.