TORONTO (miningweekly.com) – Dual-listed Augusta Resource, which is developing the Rosemont copper project, in Arizona, said its board had on Friday adopted a shareholder rights plan and an advance notice policy.
The company said its board was aware of a recent accumulation of common shares of the company by miner HudBay Minerals. Augusta said to the best of its knowledge, HudBay Minerals already owned 15.03% of the outstanding common shares of the company.
Augusta said the rights plan was intended to ensure as far as possible, that all holders of common shares of the company and the board had enough time to consider and evaluate any unsolicited take-over bids and to provide the board with enough time to seek value-enhancing alternatives.
The rights plan became effective at 08:00 on Friday morning and would be triggered when any shareholder accumulated more than 15% of the company’s outstanding shares. If exercised, the rights plan would entitle shareholders to buy shares at a substantial market discount.
Augusta said despite HudBay’s existing share ownership being grandfathered under the terms of the rights plan, any more share acquisitions by HudBay would be required to be completed in compliance with the provisions of the rights plan.
The company added it was not aware of any specific take-over bid for the company.
Augusta said it believed the 15% triggering threshold would give the board a substantially greater opportunity to run a value-maximising auction process in the event that the company was put in play through a hostile take-over bid, than would be the case if one or more shareholders held 20% share positions.
“We are not willing to allow a predatory buyer to take advantage of these market conditions to acquire our world class Rosemont copper project at less than fair value," executive chairperson Richard Warke said in a statement.
The rights plan still had to be approved by shareholders and the TSX.
The company also on Friday adopted an advance notice policy to improve company/shareholder communications.
Augusta in January received the air quality permit for its Rosemont copper project from the Arizona Department of Environmental Quality.
The company said the permit, which stipulates the operating, monitoring and reporting parameters that Rosemont must comply with to meet all federal, state and local air quality requirements, represented the seventh critical permit required to start construction.
Only one more permit remained to be obtained, which is the Clean Water Act Section 404 permit from the US Army Corp of Engineers, which Augusta expects to receive upon the issuance of the record of decision on the plan of operations from the US Forest Service.
The company’s TSX-listed stock rose 4.20% on Friday to close at C$2.48 apiece.