Hudbay Minerals Inc. has entered discussions to acquire Mantos Copper S.A., Bloomberg News reported Oct. 5, citing people familiar with the matter.

Mantos can generate as much as US$780 million in a sale, two of the sources told Bloomberg. Mantos has been looking for a buyer to raise US$1 billion to help finance its development plans for two of its copper and gold mines in northern Chile.

The sources also noted that while discussions have progressed, these could still be canceled to make room for other potential bidders.

Hudbay said in a statement that "while company's policy is to avoid comment on speculation and rumours, Hudbay emphasizes that it has had a consistent strategy of optimizing the value of its current operations and evaluating growth opportunities that are complementary to its current business".

The company also stated that "this may include acquisitions that fit Hudbay's stringent criteria, ranging from early stage exploration to producing mines, provided they are accretive to shareholder value."

Meanwhile, Canadian private equity firm Waterton Global Resource Management, one of Hudbay's largest shareholders, called for a moratorium on any mergers and acquisitions. "As a top-five shareholder in the company, we call on the board of directors of Hudbay to immediately terminate any discussions or plans to execute the Mantos transaction or any other material acquisitions in the near term," Waterton's chief investment officer Isser Elishis said in a letter obtained by Bloomberg. The company owns a 4.8% stake in Hudbay.

"However, we must reserve our rights to take any and all actions that we may deem warranted in order to ensure the best interests of shareholders are paramount in the boardroom," he added.