Hudbay Minerals posted a net profit of US$22.8 million in its third quarter results and announced the acquisition of Nevada-focused copper miner Mason Resources.

Wednesday’s reveal of Hudbay’s acquisition plans might have come as a surprise for those to have been following the company closely.

Hudbay is in the midst with a disagreement with one of its larger shareholders – Waterton Global Resource Management, a resource investment firm – over the company’s plans to acquire new assets. When a Oct. 4 Bloomberg article reported Hudbay was considering purchasing Chilean miner Mantos Copper for US$1 billion, Waterton released a letter calling for an “acquisition moratorium” until Hudbay’s annual shareholder meeting in 2019.

On Oct. 19, Waterton followed up with another letter, calling for a special meeting of shareholders to halt future acquisition plans. In the letter, Waterton CIO Isser Elishis accused Hudbay’s board of directors of mismanaging the company’s current assets and engaging in a “destructive empire building exercise.” In response, Hudbay stated that it had arranged a meeting with Waterton for either Nov. 1 or 2 and would consider the special meeting of shareholders.

Waterton has not yet to responded to the news, though Hudbay’s purchase of Mason and its Ann Mason project in Nevada for US$15 million sports a much cheaper price tag than its rumoured investment in Mantos. The announcement, made after the market closed on Wednesday, caused Hudbay’s share price to rise sharply, increasing approximately 21 per cent to $6.27 per share at time of writing.

Mason Resources is a Canadian junior mining company mainly focused on its Ann Mason copper-gold porphyry, which it says is the fourth largest undeveloped copper porphyry in the United States and Canada. 

“The acquisition of the Ann Mason project is another step in Hudbay’s consistent strategy of accretive acquisitions of scarce, high-quality copper resources in mining-friendly jurisdictions,” Hudbay president and CEO Alan Hair said in a statement. “Ann Mason is an ideal fit for Hudbay’s development pipeline and is at the stage where we can apply our exploration expertise, advance technical studies and leverage our proven mine development team to create value for our shareholders.”

Related: Controlled lab testing points to the right dust suppressant dosage at Hudbay

Hudbay already owned 14 per cent of Mason before the announcement. In August 2017, Mason reported Mantos Copper had bought shares in the company as well. When asked during the company’s third quarter conference call whether there was some confusion in the initial rumors between the two companies, Hair said that the company “does not comment on speculation.”

Ore mined at the company’s Manitoba operations was 15 per cent lower and zinc production was 28 per cent lower in comparison to the third quarter of 2017, due to lower grades at the Lalor and 777 mines as well as the closure of its Reed mine. However, the company also reported record copper production at its Constancia mine in Peru as a result of “several metallurgical initiatives intended to improve copper recoveries,” which helped to offset those losses, and Hudbay said it will still be within guidance for its metals production in Manitoba for the year.

The company announced that it would be focusing on refurbishing its New Britannica gold mill at Lalor, which it believes is the “optimal processing scenario” for the property. It also provided updates for its stalled Rosemont project in Arizona, saying that permitting and community engagement is progressing.