Production at Hudbay flagship mine, the 777 in Flin Flon, Man.
Some deals happen in the blink of an eye, like Franco-Nevada's bid for Gold Wheaton. The target's CEO David Cohen even acknowledged the deal was effectively put together over a weekend.
Then there are deals like HudBay's bid for Norsemont . It's now clear the two companies first initiated talks about a year and a half before HudBay finally took the plunge and agreed on a takeover earlier in January.
As outlined in the deal's circular, talks between the two companies got under way back in the summer of 2009. In the first meeting Norsemont outlined its Constancia copper project in Peru and the two discussed the possibility of an acquisition, going so far as to sign a confidentiality agreement.
But after some due diligence HudBay deferred, telling Norsemont it would keep its eye on new developments. For some context: the price of copper at that time was around $2.80 (U.S.) a pound.
The two companies revisited each other in October, 2010, when HudBay reached out to introduce new members of its senior management team. A technical analysis of the Constancia project came soon after, followed by a site visit to Peru.
Then, in late December, the wheels were really set in motion when HudBay sent over a non-binding offer, which prompted Norsemont to reach out to its largest shareholders to get their take on the deal. Ultimately, Norsemont was able to identify about 40 per cent of shareholders who were ready to back it, which gave the company enough confidence to back the bid.
In the end, Norsemont found itself a buyer a year and a half after the first talks begin. As for timing, copper prices today are around $4.20, about $1.40 higher than during the initial discussions.
Tim Kiladze