Hudbay Minerals Inc. (HBM.TO) is in talks to buy Mantos Copper SA, a Chilean miner seeking a buyer to finance its expansion plans, people familiar with the matter said.

Mantos could fetch as much as C$1 billion (US$780 million) in a sale, said two of the people, who asked to not be identified because the matter isn’t public. While talks are advanced, they could still fall apart and other bidders may emerge, they said.

Hudbay’s shares fell more than 7 per cent to US$4.74 at 1:40 p.m. in New York trading, giving the Toronto-based company a market value of about US$1.34 billion.

Mantos Copper, backed by Audley Capital Advisors and Orion Mine Finance, has been seeking a buyer for all or part of itself to raise $1 billion to dig for copper and gold in two of its mines in northern Chile. The company, based in the coastal city of Antofagasta, is working with Bank of Nova Scotia to evaluate “the full range of strategic alternatives,” according to a statement in May.

A representative for Hudbay declined to comment. Mantos Copper didn’t respond to requests for comment.

Mantos has said its Mantoverde mine will require a US$780 million investment and will produce an average of 106,000 metric tons of copper and 33,000 ounces of gold per year. Its Mantos Blancos expansion will extend the mine’s life through 2035 and will require a capital injection of $210 million, the company has said.

Hudbay mines for zinc and copper, primarily in Canada’s Manitoba province. Its shares have been under pressure this year, falling about 40 percent year to date, giving the company a market value of about $1.7 billion.