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Jul 10, 2019

Hudbay CEO steps down after weathering Waterton proxy fight

Hudbay Minerals

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Just months after withstanding a hard-fought proxy battle, the chief executive officer of Hudbay Minerals Inc. (HBM.TO) is leaving the Toronto-based miner.

Alan Hair, who has been with the company for more than 20 years, has stepped down, the company said Wednesday in a statement. Board member Peter Kukielski will step in as interim CEO while Hudbay searches for a permanent replacement.

It’s been a tumultuous year for Hudbay, which saw one its largest shareholders, Waterton Global Resource Management, wage a public battle for sweeping changes to the miner, including, originally, Hair’s resignation. Waterton had sought to install Kukielski as CEO.

In May, the miner reached an agreement that saw the activist get three of its nominees on the board, including Kukielski, the former CEO of Nevsun Resources Ltd. At the time the company said Hudbay’s chairman, Alan Hibben, would also resign once a replacement is found.

‘Strong’ Team

“We have a strong management team and an experienced leader in Peter Kukielski, who will ably lead the company in the interim while we complete our search for the best possible permanent leader for Hudbay,” Hibben said in the statement.

Hudbay rose 3.8 per cent to $6.54 at 2:55 p.m. in Toronto. On May 7, the shares tumbled 11 per cent after the company’s first-quarter earnings missed analysts’ expectations. The stock had not been able to recover and slid a further 18% through Tuesday.

“While the CEO change adds some uncertainty in the near term, we do not anticipate a major change in strategy from the company,” Sam Crittenden, an analyst with RBC Dominion Securities, said in a research note.

In addition to Kukielski, the former CEO of Lundin Mining Corp., Paul Conibear, might be a logical successor for Hair, Ralph Profiti, an analyst with Eight Capital, said in a note. Hudbay’s current Chief Operating Officer Cashel Meagher and current Chief Financial Officer David Bryson could also be candidates, Profiti said.