We advised our client in connection with the granting of an option to acquire several mining concessions to Hudbay Peru (a subsidiary of Hudbay Minerals Inc.) near Hudbay’s Constancia Mine. The transaction consisted of an Option and Mining Assignment Agreement and a separate Royalty Agreement to be executed upon exercise of the option. This transaction had special challenges, first because our longtime client, a family-owned company, was selling all their assets for a substantial consideration and also because the transaction was subject to Peruvian law for certain matters related to the mining concessions (title, encumbrances, transfer formalities, environmental and tax liabilities), while all other aspects of the transaction (including the royalty agreement) were governed by Canadian law. This implied among other challenges, a special effort for the overall coordination of the transaction since it involved the work of two different law firms acting in two different jurisdictions.
Matter value: An aggregate amount of US$46 million over a 5-year period, plus a 3% net smelter returns (NSR) royalty up to a maximum of US$125 million and a 1.50% uncapped NSR royalty thereafter.