TORONTO, May 2 (Reuters) - The CEO of Canadian miner

Hudbay Minerals ( HBM ) said BHP Group's ( BHP ) $39 billion offer for

Anglo American has increased the valuation of copper assets and

could underscore companies' willingness to pay a premium to buy

existing copper mines.

Hudbay expects to launch a formal sale process for a

minority stake in its Arizona Copper World project in the United

States later this year after already holding talks with

companies.

BHP offered to buy Anglo last week, though

Anglo rejected the proposal that would create the world's

biggest copper miner, saying it undervalues the company.

"The deal has increased the valuation of copper assets and

highlights that major mining companies believe the price for

copper will be significantly higher than current levels and they

are willing to pay a premium to acquire existing copper

production today," Hudbay CEO Peter Kukielski told Reuters.

Three-month copper prices on the London Metal Exchange

hit a two-year high above $10,200 a metric ton on

Tuesday, although have since retreated to $9,750.

Hudbay is currently building Copper World, where it

anticipates approximately 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 ($950.6 million).

Kukielski said Hudbay will launch the process to bring in

joint-venture partners after receiving permits.

"There will continue to be strong interest from potential

joint venture partners as many industry participants are focused

on increasing exposure to copper," he said.

Canada's copper miners are seen by analysts as potential

acquisition targets for large mining groups with a shortage of

new copper mines and demand for the metal in electrification.

Toronto-based Hudbay has been one of the few Canadian miners

active in domestic acquisition, buying Vancouver based Copper

Mountain last year for C$439 million. RBC Capital Markets last

year marked Hudbay as a potential acquisition target itself if

the copper prices fell.

"I am never worried about Hudbay being a takeout target as

our primary focus is to continue delivering on our plan to

create shareholder value," said Kukielski.

($1 = 1.3676 Canadian dollars)