Augusta Resource Adopts Shareholder Rights Plan and Advance Notice Policy
VANCOUVER, April 19, 2013 /CNW/ - Augusta Resource Corporation (TSX: AZC) (NYSE MKT: AZC) ("Augusta" or "the Company") announced today that its board of
Directors (the "Board") has adopted a shareholder rights plan (the
"Rights Plan") and an advance notice policy.
Rights Plan
The Rights Plan is intended to ensure, to the extent possible, that all
holders of common shares of the Company and the Board have adequate
time to consider and evaluate any unsolicited take-over bid for the
common shares of the Company, provide the Board with adequate time to
identify, solicit, develop and negotiate value-enhancing alternatives,
as considered appropriate, to any unsolicited take-over bid and
encourage the fair treatment of the Company's shareholders in
connection with any unsolicited take-over bid.
The Rights Plan became effective at 8:00 a.m. (Toronto time) today (the
"Effective Time"), and one right will be issued in respect of each
common share of the Company outstanding at 5:00 p.m. (Vancouver time)
on April 30, 2013 and each common share issued thereafter. The rights
will become exercisable if at any time following the Effective Time a
person, together with its affiliates, associates and joint actors,
acquires or announces an intention to acquire beneficial ownership of
common shares which, when aggregated with its holdings, total 15% or
more of the outstanding common shares of the Company (determined in the
manner set out in the Rights Plan). Following the acquisition of 15%
or more of the outstanding common shares, each right held by a person
other than the acquiring person and its affiliates, associates and
joint actors would, upon exercise, entitle the holder to purchase
common shares at a substantial discount to the market price of the
common shares at that time.
The Board has the discretion to defer the time at which the rights
become exercisable and to waive the application of the Rights Plan.
The Rights Plan permits the acquisition of control of the Company
through a "permitted bid", a "competing permitted bid" or a negotiated
transaction. A permitted bid is one that, among other things, is made
to all holders of common shares for all of their shares, is open for a
minimum of 60 days and is subject to an irrevocable minimum tender
condition of at least 50% of the common shares held by independent
shareholders.
The Board is aware of the recent accumulation of common shares of the
Company by HudBay Minerals Inc. ("HudBay Minerals"). To the best
knowledge of the Board, HudBay Minerals currently beneficially owns
approximately 15.03% of the outstanding common shares of the Company.Â
Although that existing share ownership is grandfathered under the terms
of the Rights Plan, any share acquisitions by HudBay Minerals following
the Effective Time will be required to be completed in compliance with
the provisions of the Rights Plan. The Company is not aware of any
specific take-over bid for the Company that has been made or is
contemplated, either by HudBay Minerals or any other party.
The Board considered a number of factors in adopting the Rights Plan
and, in particular, its 15% triggering threshold. At this time of
global market uncertainty, the Board believes that there is a much
greater risk of a predatory acquisition timed to take advantage of
share price weakness tied to fluctuations in the copper price. The
Board believes that the Rights Plan's 15% triggering threshold will
give the Board a substantially greater opportunity to run a value
maximizing auction process in the event that the Company is put in play
through a hostile take-over bid than would be the case if one or more
shareholders held share positions approximating 20%.
Richard Warke, Executive Chairman of Augusta, commented, "Various
members of our Board are highly experienced in public company change of
control transactions. We understand the need to have a more level
playing field if Augusta is put in play, especially in these difficult
market conditions, ensuring that we have a real opportunity to run an
auction and capture value for our shareholders. We are not aware of
any pending hostile bid, but in our view it is incumbent on our Board
to be prepared. 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."
The Rights Plan will be submitted to the shareholders of the Company for
ratification at a meeting to be held within the next six months of the
date of adoption. If the Rights Plan is not ratified by the
shareholders, the Rights Plan and any rights issued pursuant to it will
terminate. If the Rights Plan is ratified, it will continue in effect
until the third annual meeting of shareholders thereafter. The Rights
Plan is subject to acceptance by the Toronto Stock Exchange. A copy of
the Rights Plan will be available on SEDAR at www.sedar.com.
Advance Notice Policy
The Board has adopted an advance notice policy (the "Policy") in order
to facilitate an orderly and efficient annual general or, where the
need arises, special meeting, ensure that all shareholders receive
adequate notice of director nominations and sufficient information with
respect to all nominees, and allow shareholders to register an informed
vote having been afforded reasonable time for appropriate deliberation.
Among other things, the Policy fixes a deadline by which holders of
record of common shares of Augusta must submit director nominations to
the Secretary of the Company prior to any annual or special meeting of
shareholders and sets forth the specific information that a shareholder
must include in the written notice to the Secretary of the Company for
an effective nomination to occur. No person will be eligible for
election as a director of the Company unless nominated in accordance
with the provisions of the Policy.
In the case of an annual meeting of shareholders, notice to the Company
must be made not less than 30 nor more than 65 days prior to the date
of the annual meeting; provided, however, that in the event that the
annual meeting is to be held on a date that is less than 50 days after
the date on which the first public announcement of the date of the
annual meeting was made, notice may be made not later than the close of
business on the 10th day following such public announcement
In the case of a special meeting of shareholders (which is not also an
annual meeting), notice to the Company must be made not later than the
close of business on the 15th day following the day on which the first
public announcement of the date of the special meeting was made.
The Policy is effective and in full force and effect as of April 18,
2013. In accordance with the terms of the Policy, the Policy will be
put to shareholders of the Company for approval at the next annual
meeting which is currently scheduled for June 20, 2013, and if the
policy is not confirmed at the annual meeting by ordinary resolution of
shareholders, the Policy will terminate and be of no further force and
effect following the termination of the annual meeting. A copy of the
Policy will be available on SEDAR at www.sedar.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 US 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. The Company trades 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 information contained herein may
contain forward-looking statements within the meaning of the United
States Private Securities Litigation Reform Act of 1995 and
forward-looking information within the meaning of applicable Canadian
securities laws. Such forward-looking statements and forward-looking
information include, but are not limited to statements concerning:
expectations surrounding, short term financing, future project
financings or refinancing; the Company's plans at the Rosemont Project
including timing for final permits and construction; estimated
production; and capital and operating and cash flow estimates.
Forward-looking statements or information include statements regarding
the expectations and beliefs of management. Often, but not always,
forward-looking statements and forward-looking information can be
identified by the use of words such as "plans", "expects", "is
expected", "budget", "scheduled", "estimates", "forecasts", "intends",
"anticipates", or "believes" or the negatives thereof or variations of
such words and phrases or statements that certain actions, events or
results "may", "could", "would", "might" or "will" be taken, occur or
be achieved.
Forward-looking statements or information are subject to a variety of
risks and uncertainties which could cause actual events or results to
differ from those reflected in the forward-looking statements or
information, including, without limitation, risks and uncertainties
relating to: history of losses; requirements for additional capital;
dilution; loss of its material properties; interest rates increase;
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 matters;
regulatory restrictions; permitting and licensing; volatility of the
market price of Common Shares; insurance; competition; hedging
activities; currency fluctuations; loss of key employees; as well as
those factors discussed in the section entitled "Risk Factors" in the
Company's Annual Information Form dated March 25, 2013. Should one or
more of these risks and uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially from
those described in forward-looking statements or information.
Accordingly, readers are advised not to place undue reliance on
forward-looking statements or information. The Company disclaims any
intent or obligation to update forward-looking statements or
information except as required by law, and you are referred to the full
discussion of the Company's business contained in the Company's reports
filed with the securities regulatory authorities in Canada and the
United States.
SOURCE: Augusta Resource Corporation
For further information: Contact Information
Augusta Resource Corporation
Letitia Cornacchia, Vice President,
Investor Relations and Corporate Communications
Tel: (416) 860 6310
Email:Â lcornacchia@augustaresource.com