In an open letter to Hudbay shareholders on Thursday, Waterton chief investment officer Isser Elishis lamented Hudbay's "shockingly abysmal" track record compared with its peers over the past five years, which saw Hudbay shareholder returns dive 23.4% while its peer group collectively gained 44.2%.

According to Waterton, Hudbay currently traded at a material discount to its peer group on multiple key valuation metrics. Year to date, Hudbay's share price had declined 41.5%.

"We believe the share price would have declined even more had Waterton not purchased in excess of 26 million shares of the company over the exchanges in the past five months; Waterton not publicly opposed the potentially value destructive Mantos Copper transaction; and Waterton not initiated the narrative of board refreshment," Elishis said. 

Waterton, which recently lifted its stake in Hudbay to 10%, accused the incumbent board and management entrenchment, saying underperformance at Hudbay must end to preserve shareholder value.

"As a result, we are pleased to report that Waterton is finalising its recruitment of a majority slate of highly qualified director candidates, including a transformational potential CEO, to nominate for election at the 2019 annual meeting," Waterton said.

Waterton urged Hudbay to refrain from committing to any material transaction that may impact the future of the company until the 2019 annual meeting. Waterton said it expected Hudbay to schedule its 2019 annual meeting with the early-to-mid May timeframe.