HudBay launched a hostile bid for Rosemont project partner, Augusta Resource, claiming it is in a much better position to develop the Arizona copper mine.
RENO (MINEWEB) – HudBay Minerals announced Sunday that it intends to make a C$540 million hostile all-share bid for Augusta Resource Corporation.
HudBay owns 15% of Augusta Resource’s Rosemont copper project in Arizona. Augusta Resource said its board of directors would discuss the bid offer this coming week. Under the terms of the HudBay offer, Augusta shareholders will receive 0.315 of a HudBay share for each common share held, estimated at C$2.96 per Augusta common share.
“Since our initial investment in August in 2010, we have been excited about the potential of the Rosemont project. We view the Rosemont project as an attractive complement to our existing portfolio of high quality, long-life assets that fits well with our construction timeline at Constancia,” said HudBay CEO David Garofalo.
HudBay contends the company “has the technical and operational expertise and financial capacity to efficiently develop and operate the Rosemont project to the benefit of all stakeholders.” In addition to what HudBay called “proven experience in project development,” the company asserted it has the “greater capacity to advance Rosemont to production.”
“…Based on its extensive due diligence independent of Augusta, HudBay believes Augusta’s management continues to be overly optimistic about the permitting timeline and Augusta’s ability to complete the required engineering and raise the necessary financing to construct the Rosemont project,” HudBay claimed.
“With HudBay’s significant technical expertise and superior financial capacity, HudBay believes it is better positioned than Augusta to advance the Rosemont project through the final stages of permitting and into construction without the risk currently facing Augusta that further delays may result in liquidity shortfalls or require dilutive financings which would materially impair the value of August shareholders’ investments,” said HudBay.
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