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The takeover battle between HudBay Minerals Inc. and Augusta Resource Corp. hinges on a key question: how far is Augusta from getting its permits?
When Toronto-based HudBay made its $428-million hostile bid for Augusta two weeks ago, it said Augusta’s management is being “overly optimistic” about when it will receive required permits for its Rosemont copper project in Arizona. Augusta expects to get its last permit by the end of the second quarter, allowing it to move right to construction.
Augusta formally rejected the HudBay bid on Monday, and in doing so, it provided a detailed breakdown of its permitting in order to convince investors that the timing for that final permit really is imminent.
The HudBay bid was launched “right before transformational events — events that our shareholders have been anticipating for years,” chief executive Gil Clausen said on a conerence call.
He noted that the draft Record of Decision (ROD) and environmental impact statement (EIS) for Rosemont were both published late last year by the U.S. Forest Service. The filing of the ROD in December triggered a 90-to-120-day objection and resolution period that should wrap up at the end of April.
“Outside of the one-time option to extend the review period by 30 days, this timeframe can’t be prolonged,” he said.
Once that period is over, he expects Augusta to receive a clean water permit. It is the last of the eight major permits the company needs.
“So truly as you can see, we are just months from a catalyst that our patient, loyal and long-term shareholders have been waiting for,” he said.
For the rest of this article, click here: http://business.financialpost.com/2014/02/24/augusta-resource-urges-shareholders-to-reject-hudbays-buyout-offer/