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Hudbay Minerals Inc. has a new CEO, who auctioned off the last mining company he worked for, after long-time boss Alan Hair stepped down on Wednesday following a lengthy proxy battle with a private equity investor.

Hudbay, a copper and zinc producer with a $1.7-billion market capitalization, announced that former Nevsun Resources Ltd. chief executive Peter Kukielski is its new interim CEO. He takes over from Mr. Hair, who spent more than 20 years at the Toronto-based company before departing as president, CEO and a director.

Last year, private equity fund Waterton Global Resource Management Inc., which owns a 12.9-per-cent stake in Hudbay, waged a proxy fight at the company that put forward Mr. Kukielski as CEO. Waterton’s campaign for seats on Hudbay’s board and the removal of Mr. Hair ended in May with a settlement that saw the election of an agreed group of 11 directors, including Mr. Kukielski, who is 62 years old.

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“Alan’s departure does not affect our strategic or financial outlook,” said Hudbay chair Alan Hibben in a news release on Wednesday. “We have a strong management team and an experienced leader in Peter Kukielski, who will ably lead the company in the interim while we complete our search for the best possible permanent leader for Hudbay.” The search will include internal and external candidates.

Mr. Kukielski said Wednesday in a Hudbay news release: “I look forward to working with our experienced and dedicated management team to deliver on our 2019 strategic priorities and near-term catalysts.”

In a two-year run as CEO of Nevsun, a copper and gold miner, Mr. Kukielski played off rival bidders against a hostile takeover offer from Lundin Mining Corp. He ultimately sold the Vancouver-based company for $1.9-billion to China’s state-backed Zijin Mining Group Co. Ltd. Mr. Kikielski also previously worked for private equity fund Warburg Pincus LLC and several global mining companies.

Private equity funds typically acquire an entire business, attempt to improve its performance, then sell the company. In contrast, Toronto-based Waterton acquired a minority position in Hudbay last year and waged an activist-style campaign for board seats and management changes. Numerous rival fund managers and mining analysts say Waterton’s goal is likely to see Hudbay sold at a premium price to a global mining company. In January, during the proxy battle, Hudbay said in a news release: “Waterton, a relatively recent shareholder, is a mining private equity firm that competes with Hudbay for mining assets and may not have interests aligned with other shareholders.”

Waterton has US$1.75-billion of assets under management and focuses its investments on mining plays. The fund’s chief investment officer is former HSBC investment banker Isser Elishis. When Waterton and Hudbay announced their settlement two months ago, Mr. Elishis said: “We are confident that the refreshed Hudbay board is well-positioned to add value and deliver long-term value for all shareholders.”

Founded in 1927, Hudbay has operating mines in Manitoba, Saskatchewan and Peru, along with a project in Arizona that is expected to cost $1.9-billion and begin producing in 2022. In a recent report, CIBC World Markets Inc. analyst Oscar Cabrera said Hudbay stock currently trades at a significant discount to that of rival mining companies, due to delays in development of properties in Peru and Arizona. Mr. Cabrera said that discount could narrow as new mines begin contributing to the company’s financial results, and he has a $9 target price on the stock. Hudbay shares closed Wednesday at $6.58 on the Toronto Stock Exchange, up 28 cents, following announcement of the executive changes.

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