TORONTO, March 28, 2014 /PRNewswire/ - Augusta Resource
Corporation (TSX and NYSE MKT: AZC) ("Augusta" or the
"Company") today announced that its ongoing strategic review
process has generated strong interest and that it will be holding a
meeting of its shareholders on May 9,
2014 to re-affirm the continuation of its existing
shareholder approved rights plan.
Strategic Review Process
The strategic review process
initiated by Augusta in response to the unsolicited offer from
HudBay Minerals Inc. ("HudBay") has generated strong interest and
remains very active. Nine interested parties, including a
number of significant industry players, have signed confidentiality
agreements and have been conducting an extensive review of the
materials in Augusta's electronic data room. The Company will
commence the process of site visits to its Rosemont Copper Project
next week and expects that the site visits will take place largely
over the next three to four week period.
Gil Clausen, Augusta's
President and Chief Executive Officer, stated, "As we anticipated,
our strategic review process has proven to be very robust and we
are pleased with the quantity and quality of the interested
parties. There is no doubt that potential buyers recognize
that our near-construction Rosemont Copper Project is a unique,
world-class asset that has true scarcity value. With the conclusion
of the permitting process which is on track for the second quarter
this year, we are on the verge of a significant value-creating
milestone. The Board is fully committed to maximizing value for our
shareholders by carefully considering all available alternatives to
HudBay's low-ball bid."
Shareholders' Meeting to Approve Continuation of Shareholder
Rights Plan
Augusta has set its annual and special meeting
of shareholders for May 9, 2014, and
shareholders will be asked to determine whether to continue the
shareholder rights plan or have it terminate. The Board has
determined that if shareholders authorize the continuation of the
rights plan at the meeting, on an annual basis thereafter,
shareholders will be given the opportunity at each annual meeting
to determine whether to continue the rights plan or require the
Board to have it terminated. The rights plan in its current form
has a three-year term.
Richard Warke, Augusta's
Executive Chairman, commented, "Our Board takes seriously our
fiduciary obligation to protect our shareholders against the
predatory and coercive tactics of HudBay. We respect the
rights and interests of Augusta's shareholders and are putting the
power directly in their hands. We are confident that they will
strongly support our Board for putting this critical decision to
them."
HudBay's unprecedented tactic of dropping its minimum tender
condition part way through its initial bid period is a highly
coercive attempt by a shareholder with over 15% of Augusta shares
to try to secure a minority blocking position in order to thwart
strategic alternatives that might be available for the benefit of
all other shareholders. Augusta's rights plan was put in
place to prevent exactly this sort of predatory tactic from being
used to the detriment of the Company's shareholders. As long
as the rights plan remains in effect, HudBay cannot take up any
shares without triggering the rights.
Augusta's Board of Directors has determined that it is
reasonable, fair and consistent with best practices in corporate
governance to seek the views of its shareholders on whether they
would like the rights plan to continue in the face of the HudBay
offer, based on the following:
- the serious threat of value expropriation posed by HudBay's
predatory coercive tactic of dropping its minimum tender
condition;
- to ensure that de facto control is not transferred
without Augusta shareholders having a full and fair opportunity to
receive an adequate change of control premium;
- the fact that HudBay's offer has been almost universally
condemned by Augusta's shareholders and the analysts who cover
Augusta as a low-ball bid that does not come close to recognizing
the value of Augusta's world-class Rosemont Copper Project;
- the reality that after nearly six years of effort, Augusta is
on the cusp of finalizing the permitting process for the
construction of its Rosemont Copper Project with the understanding
that when the last permit and approval is obtained, there are
obvious and significant positive value implications for Augusta's
shareholders;
- the fact that Augusta's shares have consistently traded at a
significant premium to the implied value of the HudBay offer since
it was announced, with the premium currently at 27%;
- the fiduciary obligation of the Board to ensure that a
comprehensive value-maximizing process is completed;
- the fact that any shareholder of Augusta seeking to sell its
shares can easily do so in the market at a substantially higher
price than that offered by HudBay and thus is in no way prejudiced
by the continuation of the rights plan; and
- the rights plan will continue to allow any party to make a
non-coercive "Permitted Bid" which, among other things, includes a
non-waivable minimum tender condition of more than 50% of the
shares held by independent shareholders.
Augusta's rights plan was adopted on April 19, 2013, specifically in response to the
threat posed by HudBay continuing its aggressive accumulation of
Augusta shares. The rights plan was ratified by shareholders on
October 17, 2013 with over 88% of our
outstanding shares, excluding those held by HudBay, voted in
approval.
If shareholders other than HudBay do not approve the continuance
of the rights plan, the Board will take the necessary steps to
terminate it on the day following the shareholder meeting.
Reject HudBay's Offer – No Action Required
To REJECT
the HudBay offer no action is required on the part of the
shareholders. The Board of Directors' recommendation that Augusta
shareholders REJECT HudBay's unsolicited offer and NOT TENDER their
Augusta shares thereto, as well as a more detailed discussion of
the reasons for rejecting HudBay's offer is set forth in the
Directors' Circular issued by 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 HudBay
offer. The Directors' Circular is available on SEDAR at
www.sedar.com and on Augusta's website at
www.augustaresource.com.
How to Withdraw
If you have already tendered your
Augusta 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
U.S. 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. Augusta's shares are listed
and posted for trading 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 and the strategic review process of Augusta, 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