17/03/09

TORONTO (Reuters) - HudBay Minerals will pursue an aggressive acquisition strategy and could even take another stab at buying Lundin Mining if top shareholder SRM Global Master Fund succeeds in replacing the company's board, the possible replacement CEO said on Tuesday.

Peter R. Jones, a former HudBay chief executive who will take up the job again if SRM's slate wins a shareholder vote on March 25, also said HudBay could be open to a takeover overture from a larger player if the opportunity arises.

He said the company will try to expand through acquisition before it would consider returning a portion of its nearly C$700 million ($551 million) cash position to shareholders via a buyback or dividend.

"On the acquisition approach. I think intensely we're going to look at it in the first three months, and I would certainly be disappointed if we can't identify some significant targets within the first six months," he said.

"I'm already getting calls, by the way, by people who are interested in the acquisitions process."

Jones stepped down as CEO in January 2008, making way for Allen Palmiere, who left the job last week in the wake of a disastrous attempt to take over rival Lundin.

The bid, deemed too pricey and dilutive by some shareholders, prompted the proxy war by SRM, and eventually fell apart after the Ontario Securities Commission ruled HudBay would have to get shareholder approval to issue the stock it was using to buy Lundin.

However, Jones said that Lundin's key assets -- including a 24.75 percent stake in Freeport-McMoRan's Tenke-Fungurume copper-cobalt deposit in the Democratic Republic of Congo -- were still attractive to HudBay.

"There's always the potential of a reengagement of a merger or acquisition with Lundin," he said.

Colin Benner is currently interim CEO at HudBay.

SRM holds 11 percent of HudBay, while Goodman & Company Investment Counsel, which also supports the SRM slate, holds just over 10 percent.

HudBay's shares were up 2 Canadian cents at C$5.85 on the Toronto Stock Exchange on Tuesday