NICKEL SALE: HudBay unloads Guatemalan ferro-nickel project

GUATEMALA - Toronto-based HudBay Minerals announced the sale of its Fenix ferro-nickel project to the Russians. The Solway Group has agreed to pay US$140 million in cash at closing and US$30 million upon the satisfaction of certain conditions during development.

HudBay president and CEO David Garofalo explained that Fenix was sold because it does not fit his company's strategy of focusing on VMS and porphyry deposits. Both the Lalor gold-zinc project in Manitoba and the Constancia copper-gold-molybdenum project in Peru are under development.

Solway (www.Solway.ru) is the owner and operator of the Pobugsky ferro-nickel plant in Ukraine. It also mines zinc, lead and copper in Macedonia. The company's Aquila nickel project in Indonesia is under construction.

The Fenix mine and plant were originally built by Inco in the mid-1970s. It operated for four years under the name Exmibal before high energy costs and low nickel prices forced its shutdown. The property was mothballed in 1982 and Inco wrote off its entire $220-million investment.