HudBay board admits defeat

The meeting scheduled for tomorrow for shareholders of the Toronto-based mining company has been cancelled.

HudBay's board members yesterday acknowledged their defeat in the proxy campaign waged by SRM Global Master Fund LP, a hedge fund based in Monaco that itself controls 11% of the issuer's stock.

Faithful readers will remember my post of March 11th in which I described the incumbent board's efforts to maintain control by sacrificing the CEI, Allen Palmiere.

It obviously didn't work. Here is the statement of capitulation.

HudBay is traded on the Toronto Stock Exchange with the ticker symbol HBM. Its price rose 17 cents yesterday on the news of the incoming SRM-nominated board members.

The one-year chart above shows a deterioration of price through most of last year and a slow recovery through the first quarter of 2009, perhaps in anticipation of this result of the ongoing proxy contest.

Palmiere resigns at HudBay Minerals

HudBay Minerals is a mining company working copper and zinc deposits especially in Manitobe. It trades on the Toronto Stock Exchange.

Its chief executive, Allen Palmiere, has resigned in the face of shareholder discontent resulting from a failed effort to acquire Lundin Mining, another Toronto-listed compamy, last year.

SRM Global Master Fund LP is seeking to replace the whole board at HudBay, and a special meeting has been called for March 25 at SRM's request for the purpose of this vote.

The official announcement of Palmiere's departure says the usual nice things: "The Board of Directors thanks Allen for his service to HudBay, first as chairman, then as chief executive officer and director." But there is no effort to answer the obvious question: why?

SRM doesn't call the shots yet, surely, so its discontent can't be the only operating factor here. Did Palmiere jump or was he pushed?

Let's get the Sccoby-Doo gang to work on this mystery. Maybe the new interim CEO, Colin Benner, will end up telling them "I would have gotten away with it too, if not for you meddling kids!"

Probably not. I'm just free associating.