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HudBay Minerals and Augusta Resource Corp. agree to friendly deal

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TORONTO - HudBay Minerals Inc. reached a friendly deal Monday to acquire Augusta Resource Corp. (TSX:AZC) after it improved its bid in an offer valued at $555 million.

Under the deal, HudBay (TSX:HBM), which had earlier been rebuffed by the junior company, will give Augusta shareholders 0.17 of a warrant in addition to its original offer of 0.315 of a HudBay share per Augusta share.

Each whole warrant, which will have an initial four-year term, entitles the holder to acquire a HudBay share for $15.

The companies valued the offer at $3.56 per Augusta share.

Augusta shares closed at $3.20 on the Toronto Stock Exchange on Friday, while HudBay shares last traded for $10.29.

Augusta is developing the Rosemont copper-molybdenum project near Tucson, Ariz.

The company had originally rejected the HudBay offer and used a shareholder rights plan to block the hostile takeover offer.

However, the B.C. Securities Commission placed a limit on the rights plan last month. If HudBay extended its offer to July 16, the rights plan would be blocked on July 15.

HudBay already owns about a 16 per cent stake in Augusta.

Augusta had said that nine potential buyers had signed confidentiality agreements and were reviewing its books.

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