TORONTO, April 23, 2014 /CNW/ - Augusta Resource
Corporation (TSX and NYSE MKT: AZC) ("Augusta" or the
"Company") today provided an update on its strategic review process
which continues to be robust. The Company also provided an
update on permitting and project financing, with both processes
advancing well and on track for completion in the second and third
quarter of 2014, respectively.
Augusta's President and CEO, Gil
Clausen, said, "Augusta and its advisors are actively
engaged in discussions with several third parties who are
continuing their due diligence on Rosemont, including comprehensive site
visits. We are fully committed to maximizing value for
Augusta shareholders by pursuing and evaluating alternatives to
HudBay's offer. HudBay's tactics and recent statements on our
permitting and project financings are self-serving and without
merit. Both processes are on track and as
guided."
For further details on the strategic review process, permitting
and project financing please see Augusta's April 2014 Presentation available on the
Company's website at www.augustaresource.com under the HudBay Offer
page.
Strategic Review Process
The strategic review process
initiated by Augusta in response to the unsolicited offer from
HudBay Minerals Inc. ("HudBay") continues to be active with ten
signed confidentiality agreements related to the current
process. Potential bidders remain actively engaged in due
diligence and ongoing management discussions. Five site tours with
detailed management meetings have been conducted or are scheduled
to be completed by the end of this week.
Permitting Update
Augusta is in the final stages for
the two outstanding federal regulatory approvals required to
commence construction at its Rosemont Copper Project ("Rosemont"):
the final Record of Decision from the U.S. Forest Service ("USFS")
and the Clean Water Act Section 404 Permit ("404 Permit") from the
U.S. Army Corps of Engineers ("ACOE"). The important
precursors to both of these approvals have been completed and
submittals are pending with the agencies for action.
The USFS continues to work on responses to the approximately 100
comments and objections received on the draft Record of Decision
during the objection period which concluded on February 14, 2014. The USFS must complete written
responses to the objections and comments received prior to the
conclusion of the review period which ends on April 30, 2014. Following the response from
the USFS, the final Record of Decision is required to be issued and
is expected to be published before the end of the second quarter of
2014, as previously guided.
On April 1, 2014, Augusta
submitted the mitigation plans for Rosemont for the 404 Permit to the ACOE.
Subsequently, on April 16, 2014, the
ACOE requested some technical clarifications and a response in the
form of a final mitigation and monitoring plan by April 24, 2014. The ACOE reaffirmed that it
intends to notify the USFS of mitigation plan adequacy by
April 30, 2014 to enable the USFS to
proceed in accordance with itsschedule. Augusta fully expects
that the submission of the final Rosemont mitigation plan will allow the ACOE
to complete its process and issue the 404 Permit by the end of the
second quarter of 2014, as previously guided.
In other permitting matters, on April 10,
2014, an administrative law judge issued an order affirming
the Air Quality Permit and dismissing the appeal based on over 300
findings of fact and 15 conclusions of law.
Project Financing Update
Following the execution of a
project financing mandate letter signed in August 2013 by a syndicate of international
financial institutions, export credit agencies and development
banks, significant progress has been made towards the completion of
the project financing debt facility for the construction of
Rosemont. The lenders' due diligence is substantially
complete and the final term sheet is in an advanced stage of
discussion. The lender group, Augusta and its financial
and legal advisors are on track for completing the project
financing process in the third quarter of 2014.
The project financing package is part of Augusta's financing
plan for the construction of Rosemont that includes payments from Silver
Wheaton Corp. ("Silver Wheaton") and Augusta's joint venture
partners, LG International Corp. and Korea Resources Corporation,
and which is expected to provide sufficient funding for the
construction of Rosemont,
including the repayment of the Red Kite loan facility. The
initial proceeds from the Silver Wheaton stream and the remaining
joint venture partner funding are expected to be used by Augusta to
retire the Red Kite loan. Funding under the project financing
will be contingent upon, among other conditions, the advance of the
payment from Silver Wheaton and the remaining payment from the
joint venture partners. The availability of the Silver
Wheaton payment requires Augusta to demonstrate to Silver Wheaton,
acting reasonably, that all permits necessary to construct and
operate Rosemont are expected to
be obtained in the ordinary course of business by the time they are
necessary. The Company anticipates being able to satisfy this
condition by the end of the second quarter of 2014 with the
issuance of the 404 Permit and final Record of Decision.
Vote For Continuation of Shareholder Rights
Plan
Shareholders are reminded to vote their proxy FOR the
continuation of the shareholder rights plan. Augusta urges
shareholders to submit their proxies for the shareholders meeting
to consider the continuance of the shareholder rights plan prior to
April 29, 2014 so that their proxy
votes can be considered by the British Columbia Securities
Commission at the hearing that has been scheduled for April 29, 2014.
For assistance in voting, shareholders can contact Laurel Hill
Advisory Group toll-free at 1-877-452-7184 or by email at
assistance@laurelhill.com. Shareholders are encouraged to
review Augusta's management information circular dated April 7, 2014, which provides a detailed
discussion of the continuation of the shareholder rights plan, a
copy of which is available on SEDAR at www.sedar.com and on
Augusta's website at www.augustaresource.com.
Reject HudBay's Offer – No Action Required
To REJECT
HudBay's offer no action is required on the part of 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 HudBay's 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 HudBay's 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 banks 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