Conceptual Rosemont operations, Arizona.
Photo by: Augusta Resource Corp
TORONTO (miningweekly.com) – Global investment research and proxy advisory firm Glass Lewis & Co has recommended that shareholders of copper project developer Augusta Resource Corp vote to keep the rights plan in place at the shareholders meeting on May 2.
In its report, Glass Lewis stated, “…we believe that in a matter as important as a shareholder rights plan, shareholders ought to have a say as to whether or not they support such a plan's implementation…. Its potential impact on and relation to shareholders is direct and substantial.”
“We are pleased that Glass, Lewis & Co supports our position that the shareholder rights plan should continue. Our intention is to put the power of this important decision in the hands of Augusta shareholders by giving them the opportunity to vote on the rights plan on May 2, three days before the expiry of Hudbay’s bid,” Augusta president and CEO Gil Clausen said.
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.
On Tuesday, Augusta affirmed that it would argue its position “forcefully” before the British Columbia Securities Commission in order to protect shareholder rights.
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.
Hudbay is seeking control over Augusta's sizeable Rosemont copper deposit, near Tucson, Arizona, which could account for about 10% of US copper output once in full production.
If shareholders, other than Hudbay, did not vote to keep the poison pill in place at the shareholder meeting, the rights plan would be terminated before Hudbay’s offer expires.