https://www.miningweekly.com

Hudbay applies to cease trade Augusta’s ‘poison pill’

Hudbay applies to cease trade Augusta’s ‘poison pill’

Photo by Bloomberg

15th April 2014

By: Henry Lazenby

Creamer Media Deputy Editor: North America

  

Font size: - +

TORONTO (miningweekly.com) – Base metals miner Hudbay Minerals on Monday applied to the British Columbia Securities Commission to cease trade project developer Augusta Resources’ shareholder rights plan, or ‘poison pill’, before its C$540-million offer expires on May 5.

As long as the rights plan remained in effect, Hudbay could take up any shares without triggering the rights plan, which broadly entailed that new shares would be issued if a shareholder exceeded a 15% interest.

Augusta had previously said that its ‘poison pill’ was put in place in April last year, at a time when Hudbay was aggressively buying Augusta shares.

Hudbay stressed that it would not extend the offer deadline again.

"The time for Augusta shareholders to support our offer is now. Sixty-four days have passed since we announced our offer and Augusta has failed to produce any alternative transactions. Meanwhile, Augusta continues to make unachievable promises with respect to permitting, financing and project construction,” Hudbay president and CEO David Garofalo said.

Hudbay contended that Augusta's standalone plan was not viable given Augusta's financial position, and no superior proposals have been made to Augusta shareholders.

“As long as Augusta continues as a standalone entity, its shareholders face significant risk of value erosion and dilution,” Hudbay alleged.

Toronto-based Augusta last month said that its review process had generated “strong” interest and remained “very active”, drawing nine interested parties to its data room.

However, no firm alternative offer had been tendered.

Hudbay contended that construction of Augusta’s flagship Rosemont copper project was imminent, and the company’s plan carried “significant risk” given its financial situation and “its history of misleading shareholders by being overly optimistic about its achievement of significant milestones”.

Hudbay believed that Augusta was four years behind schedule on its original permitting guidance and had revised this guidance 11 times, suggesting that there was no basis for any confidence in Augusta's current guidance regarding the timing for receiving permits by midyear, and completing related legal challenges.

Augusta had also previously conceded that it would need to raise capital in the third quarter to continue with the project, and that it could not guarantee obtaining the required funds.

Canada-based Hudbay in February said it would offer Augusta shareholders 0.315 of a Hudbay share for each Augusta share held, representing about C$2.96 per Augusta share, or a 62% premium to Augusta’s 20-day volume-weighted average share price on the TSX on February 7, or an 18% increase over the stock’s closing price on that date.

Edited by Creamer Media Reporter

Comments

Latest News

Ironveld smelter
Ironveld ramp-up slower than expected
28th March 2024 By: Darren Parker

Showroom

Flameblock
Flameblock

FlameBlock is a proudly South African company that engineers, manufactures and supplies fire intumescent and retardant products to the fire...

VISIT SHOWROOM 
Aqs image
AQS Liquid Transfer

AxFlow AQS Liquid Transfer (Pty) Ltd is an Importer and Distributor of Pumps in Southern Africa

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Hyphen, Eva mine, ferrochrome price make headlines
Hyphen, Eva mine, ferrochrome price make headlines
27th March 2024
Resources Watch
Resources Watch
27th March 2024

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.17 0.208s - 92pq - 2rq
Subscribe Now