NEW YORK Augusta Resource Corp. blasted HudBay Minerals Inc.s petition to cease trade in its shareholder rights plan as "a deliberate attempt by HudBay to deny Augustas shareholders of their ability to make one of the most critical decisions in respect of their investment in Augusta," Gil Clausen, president and chief executive officer, said April 15.
"We are actively running a robust process to maximize value for shareholders, and we are pleased with the progress so far as well as with the numerous high-quality participants involved," he said in a statement. "We are putting the ultimate power directly in the hands of shareholders by giving them the opportunity to make the decision on reaffirming the rights plan on May 2, three days before the expiry of HudBays low-ball bid."
Toronto-based HudBay earlier this week petitioned the British Columbia Securities Commission to cease trade in Augustas shareholder rights plan, which would allow a vote on its takeover offer (amm.com, April 14).
HudBay said Augusta hasnt received any proposals superior to its own, which gives Augusta shareholders 0.315 of a HudBay common share for each Augusta share. HudBays offer expires May 5 and wont be extended unless Augustas "poison pill" plan is waived or ceases trade.
Augusta had moved its annual shareholders meeting to May 2 to allow the plan to be considered (amm.com, April 8).
HudBay also doubts Vancouver, British Columbia-based Augustas ability to proceed with its Rosemont copper project in Utah by itself, stating the plan "carries significant risk, given its financial situation and its history of misleading shareholders by being overly optimistic about its achievement of significant milestones."
Augustas funding from Silver Wheaton and its Korean joint-venture partners depends on its other project financing and permits being in place, which HudBay doesnt believe it will be able to accomplish by its given deadline.
"HudBays comments on the status of Rosemonts permitting and project financing are misleading and unfounded, as both have significantly advanced over the last several months. We are on track to complete the permitting process this quarter and project financing early next quarter, both of which represent substantial near-term value implications for our shareholders," Clausen said. "We will argue our position forcefully before the (British Columbia) Securities Commission in order to protect the rights of Augusta shareholders."