Canadian miner HudBay Minerals Inc (HBM.TO: Quote) 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)