HudBay Minerals Inc said on Wednesday it will hold a special meeting of shareholders on March 31 to vote on a proposal to remove its current board of directors and elect a new slate.

HudBay, whose planned purchase of Lundin Mining has come under fire from some investors, did not say who requested the meeting, but said they had not yet proposed an alternative board.

The Canadian miner turned down a previous requisition from Jaguar Financial Corp , which has been trying to derail the mis-priced Lundin deal by replacing HudBay's board in hopes of canceling the all-stock transaction.

We're not that important here, we're only a 1 percent shareholder ... We're trying to be a catalyst and a facilitator to genuinely articulate the opposition from the Street, Jaguar Chief Executive Vic Alboini said in an interview.

If a shareholder meeting were held today, there is zero doubt in my mind, not a scintilla of doubt, that the (HudBay) board would be removed.

A spokesperson for HudBay was not available for comment.

Alboini said this latest request came from an investor holding more than 5 percent of HudBay. He said he is fielding board candidates for the shareholder, which he would not name.

Jaguar argues the Lundin deal should be viewed as a related-party transaction, a type of arrangement that requires shareholder approval.

In its efforts to block the deal, the boutique bank has also proposed buying HudBay, saying it would distribute its excess cash through dividends and keep its operating assets as a going concern. It has said legal action is another option.

HudBay's stock has dropped about 40 percent since the deal was announced on Nov. 21 as shareholders worry about the addition of Lundin's debt and money-losing zinc mines to HudBay's stronger balance sheet.

HudBay says the deal is needed to ensure future growth because Lundin assets, while more expensive and risky, will greatly expand its resources and produce sturdy cash flow as metal prices recover from recent declines.

Under the planned transaction, HudBay will issue 0.3919 of a share for each Lundin share. With HudBay stock up 4 Canadian cents at C$3.12 on Wednesday, the share ratio values Lundin at about C$1.22 a share. Lundin stock lagged that value on Wednesday, at C$1.19.

Worth about C$800 million ($660 million) when announced, the deal is now valued at approximately C$477 million. It is expected to close by May 30.

Lundin, whose shareholders vote on the transaction on Jan. 26, has agreed to pay HudBay a C$24.25 million break fee under certain circumstances. ($1=$1.21 Canadian) (Reporting by Susan Taylor; editing by Rob Wilson)

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