August 6, 2011 / 12:16 AM / in 6 years

UPDATE 1-HudBay Minerals to sell Fenix project for $170 mln

* To record a $212.7 mln charge in June quarter

* Expects deal to close in Q3

Aug 6 (Reuters) - Canadian miner HudBay Minerals Inc (HBM.TO) said it would sell its Fenix ferro-nickel project in Guatemala to Russia’s Solway Group for $170 million in cash.

The Fenix project does not fit HudBay’s strategy of focusing on volcanogenic massive sulfide (VMS) and porphyry deposits, the company said in a statement.

HudBay said on Friday it expects to record a non-cash charge of about $212.7 million related to its investment in Fenix, in its financial results for the three months ended June 30.

Solway will pay the company $140 million in cash at the closing of the deal, and $30 million after certain conditions are satisfied, the company said.

HudBay expects the transaction to close in the third quarter of 2011. (In U.S. dollars) (Reporting by Divya Sharma in Bangalore; editing by Carol Bishopric) (divya.sharma@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters Messaging: divya.sharma.reuters.com@reuters.net))

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