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Canadian copper miner Hudbay Minerals plans to raise $300.2-million in an equity offering to help fund near-term growth initiatives at its Copper Mountain unit among other purposes, the company said on Tuesday.

Underwriters led by RBC Capital Markets and BMO Capital Markets will buy 31.6-million shares of Hudbay at $9.50 each under a bought deal.

The company could raise as much as $345.2-million in gross proceeds if the underwriters exercise an over-allotment option to purchase up to an additional 15% of the shares.

Hudbay said it also intends to use the proceeds to improve balance sheet flexibility and evaluate mill throughput enhancement opportunities at the Constancia mine in Peru and its New Britannia mill in Manitoba, Canada.

US-listed shares of the company were down 8.4% in extended trading.

Copper hit a record $11 104.50 on Monday on the London Metals Exchange as a rally triggered by short covering created momentum for speculators and funds to bet on a potential long-term shortage of the metal in the transition to green energy.

Additionally, despite demand remaining weak in top consumer China, the higher prices have moved companies to restart older mines.

Toronto-based Hudbay bought Vancouver-based Copper Mountain in 2023 for C$439-million, where it anticipates roughly 92 000 metric tons of average copper production over the first ten years.

Total initial cost for phase 1 is expected to be C$1.3-billion.