TORONTO, March 17, 2014 /PRNewswire/ - Augusta Resource
Corporation (TSX/NYSE MKT: AZC) ("Augusta" or the "Company")
responds to the announcement made last Friday by HudBay Minerals
Inc. ("HudBay") that it has extended its offer to acquire common
shares of Augusta and has waived the minimum tender condition under
the offer.
HudBay's unprecedented coercive tactic of dropping
its minimum tender condition part way through its initial bid
period is an ill-considered reaction to an obviously failing
offer:
- The HudBay offer has received virtually no support from
Augusta's shareholders (at less than one half of one percent of
Augusta's common shares tendered), or from the analysts who cover
Augusta;
- Augusta's share price has consistently traded at a significant
premium to the implied offer price since the announcement of the
HudBay offer, with the premium currently over 27%; and
- The early extension of the offer and waiver of the minimum
tender condition by HudBay are a clear acknowledgment that its
offer was not going to succeed.
As Augusta advances the permitting for its world class
Rosemont project and the prospect
of Augusta's shares being re-rated moves closer, the pressure is
mounting on HudBay to dramatically improve its offer or go away.
Augusta confirms that its permitting process is progressing as
planned with previous guidance remaining unchanged for receipt of
both the 404 permit from the Army Corps of Engineers and the Final
Record of Decision from the U.S. Forest Service in the second
quarter of this year.
Richard Warke,
Augusta's Executive Chairman, stated, "HudBay started this
process with a low ball bid, which the market clearly has rejected.
Now, when their bid is failing, HudBay drops their minimum tender
condition in a desperate attempt to give life support to their bid.
Their tactics are just appalling. Our Board understands its
fiduciary obligation to protect the interests of our shareholders,
and we intend to do just that."
Gil Clausen, Augusta's
President and Chief Executive Officer, commented, "Rather than
making a proper offer that Augusta shareholders would view as fair,
HudBay is opting to proceed with plan 'B', which is to try and
secure a minority blocking position to thwart any future strategic
alternatives. That is exactly what our shareholder rights plan is
there for – to prevent this sort of highly coercive tactic from
being used by HudBay. Our strategic process is well under way
and we have no doubt that our shareholders will continue to support
the efforts of our Board to protect their interests."
Shareholders are reminded that as long as Augusta's shareholder
rights plan remains in effect, HudBay cannot take up any shares
that might be tendered to its offer without triggering the rights.
Augusta's Board of Directors intends to meet during the week of
March 24, 2014 to receive an update
regarding the Company's strategic process and discuss the Company's
response to HudBay's coercive attempt to deprive Augusta
shareholders of the full value of their shares. Augusta will issue
a press release following that Board meeting to update its
shareholders. Shareholders are advised to take no actions in
response to the HudBay offer pending the issuance of that press
release.
Reject HudBay's Offer– No Action Required
The Board of Directors' recommendation to Augusta shareholders
that they REJECT the unsolicited offer and NOT TENDER their Augusta
shares, as well as a more detailed discussion of the reasons for
rejecting the unsolicited offer is contained in the Directors'
Circular of the Board of Directors that was mailed to Augusta's
shareholders and filed with securities regulatory
authorities. Shareholders are advised to read the Directors'
Circular carefully and in its entirety, as it contains important
information regarding Augusta, HudBay and the unsolicited
offer. The Directors' Circular is available on SEDAR at
www.sedar.com and on the Augusta website at
www.augustaresource.com.
How to Withdraw
If you have already tendered your common shares to the HudBay
offer, you can withdraw your shares by contacting your broker or
Laurel Hill Advisory Group, the Information Agent retained by
Augusta. Laurel Hill can be reached at 1-877-452-7184 (Toll
Free within North America), or by
bank and brokers and collect calls outside North America at 416-304-0211 or via email at
assistance@laurelhill.com.
About Augusta
Augusta is a base metals company focused on advancing the
Rosemont Copper deposit near Tucson, Arizona. Rosemont hosts a large copper/molybdenum
reserve that would account for about 10% of US copper output once
in production (for details refer to www.augustaresource.com).
The exceptional experience and strength of Augusta's management
team, combined with the developed infrastructure and robust
economics of the Rosemont project,
propels Augusta to becoming a solid mid-tier copper producer.
The Company trades on the Toronto Stock Exchange and the NYSE MKT
under the symbol AZC.
Cautionary Statements Regarding Forward Looking
Information
Certain of the statements made and the information contained in
this news release constitutes "forward-looking statements" under
United States federal securities
laws or "forward-looking information" under Canadian securities
laws. These statements and information relate to future
events and Augusta's future performance, business prospects or
opportunities, including information concerning the unsolicited
offer of HudBay, which are subject to certain risks, uncertainties
and assumptions. Such forward-looking statements and
forward-looking information include, but are not limited to
statements concerning Augusta's plans at the Rosemont project, including the timing for
obtaining final permits, construction and estimated production,
expectations surrounding future financings and refinancings,
capital and operating cash flow estimates, changes in market
conditions, changes or disruptions in the securities markets and
market fluctuations in the prices for Augusta's securities, the
lack of any alternative transactions or the terms and conditions of
any alternative transactions not being acceptable.
Forward-looking statements or information is frequently, but not
always, characterized by words such as "will", "plan", "expect",
"project", "intend", "believe", "anticipate", "budget", "forecast",
"schedule", "estimate" and similar expressions, or statements that
certain events or conditions "may", "should", "could", "might" or
"will" occur. The forward-looking statements or information
contained in this news release is based on the reasonable
expectations and beliefs of management and involves numerous
assumptions, known and unknown risks and uncertainties, both
general and specific to Augusta and the industry in which the
Company operates. Such assumptions, risks and uncertainties
include, but are not limited to Augusta's history of losses,
requirements for additional capital, dilution, loss of material
properties, interest rate increases, global economy, no history of
production, speculative nature of exploration activities, periodic
interruptions to exploration, development and mining activities,
environmental hazards and liability, industrial accidents, failure
of processing and mining equipment, labour disputes, supply
problems, commodity price fluctuations, uncertainty of production
and cost estimates, the interpretation of drill results and the
estimation of mineral resources and reserves, legal and regulatory
proceedings and community actions, title and tenure matters,
regulatory restrictions, permitting and licensing, volatility of
the market price of the Company's common shares, insurance,
competition, hedging activities, currency fluctuations, loss of key
employees, as well as those factors disclosed in Augusta's
documents filed from time to time with the securities regulators in
the provinces of British Columbia,
Alberta, Saskatchewan, Manitoba, Ontario, New
Brunswick and Newfoundland
and Labrador. Should one or more of these risks and
uncertainties materialize, or should underlying assumptions prove
incorrect, actual results, performance or achievements of the
Company, or industry results, may vary materially from those
described in this presentation. For further details,
reference is made to the risk factors discussed or referred to in
Augusta's annual and interim management's discussion and analyses
and Annual Information Form on file with the Canadian securities
regulatory authorities and available under Augusta's issuer profile
on SEDAR at www.sedar.com.
Although Augusta has attempted to identify important factors
that could cause actual actions, events, results, performance or
achievements to differ materially from those described in the
forward-looking statements or information contained in this news
release, there may be other factors that cause actions, events,
results, performance or achievements not to be as anticipated,
estimated or intended. There can be no assurance that
forward-looking statements or information will prove to be
accurate, as actual results and future events could differ
materially from those anticipated in such statements. Such
forward-looking statements and information are made or given as at
the date of this news release and Augusta disclaims any intention
or obligation to update or revise any forward-looking statements or
information, whether as a result of new information, future events
or otherwise, except as required under applicable securities law.
The reader is cautioned not to place undue reliance on
forward-looking statements or information.
SOURCE Augusta Resource Corporation