HudBay CEO Peter Jones to retire, president resigns effective immediately

By The Canadian Press

TORONTO - HudBay Minerals Inc. (TSX: HBM.TO), a Toronto-based zinc miner, says Peter Jones will retire as chief executive of the company at the end of the year, only nine months after he returned in the wake of a corporate and board shakeup.

Jones, a former CEO who took over again after a failed takeover by HudBay of Lundin Mining (TSX: LUN.TO) last year, will remain on the board after his retirement.

Meanwhile, Michael Winship, president and chief operating officer, has resigned, effective immediately, the company said.

The miner did not say why the executive changes were made or whether there is friction between the board and the company's executive team over the future direction of HudBay.

There had been some speculation that some directors and shareholders of the company want to sell HudBay Minerals to a larger miner in an increasingly consolidating global mineral industry.

Reports earlier this year said HudBay could be the target of a takeover bid by Indian company Vedanta Resources PLC.

It's not known whether Jones supports the idea of a sale of the company.

Jones returned to HudBay in March after a failed attempt by former CEO Allen Palmiere to acquire Lundin last November in a big share-swap transaction without holding a shareholder vote on the deal.

Shareholders opposed the takeover in part because it would have led to the issuing of nearly 158 million new HudBay shares, doubling HudBay's share capital and diluting the value of their own stock.

After the deal fell apart, dissident shareholder SRM Global Master Fund LP nominated a new slate of directors to replace Palmiere and his board.

Facing defeat, the board resigned in March, clearing the way for the appointment of the new board and Jones, who was CEO of HudBay from 2002 until early 2008.

Jones has said he is evaluating opportunities for expansion through acquisitions and internal growth, including the development of the Fenix nickel project in Guatemala and the Lalor deposit in the Flin Flon region of northern Manitoba.

In a related development Thursday, HudBay announced it has appointed Warren Holmes as executive vice-chairman of the company effective immediately to help in the transition to a new chief executive and has begun a search for a replacement for Jones.

"On behalf of the board of directors, I would like to thank Mr. Jones for his tireless efforts and leadership and for the significant appreciation in shareholder value realized under his watch," Wesley Voorheis, HudBay's chairman, said in a release.

"While he is retiring, we will continue to benefit from his leadership and expertise in his ongoing role as director. I would also like to take this opportunity to thank Mr. Winship for his valuable contributions to HudBay."

"HudBay is well positioned to build on the momentum of its recent initiatives and to execute on its strategic plan. I look forward to seeing the company through to new strong leadership," added Holmes.

HudBay Minerals Inc. has mines, mills and other assets in North and Central America.

Shares in the company lost 76 cents or 4.6 per cent to $15.74 in Thursday trading on the Toronto Stock Exchange.