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HudBay Minerals Inc. is asking Canadian regulators to get rid of Augusta Resource Corp.’s defense plan so that it can acquire Augusta’s copper project in Arizona.
HudBay already owns a 16 per cent stake in Augusta. But the Toronto-based company is blocked from acquiring more shares because Augusta adopted a shareholder rights plan, also known as a poison pill, when it found out HudBay had accumulated such a large position.
The plan allows non-HudBay shareholders to buy additional shares at a discount, which would make it prohibitively expensive for the Toronto miner to acquire the rest of Augusta. On Monday, HudBay asked the British Columbia Securities Commission to make a decision before its hostile offer expires May 5.
Vancouver-based Augusta is scheduled to hold a meeting May 2 where shareholders will get to vote on whether they want to keep their poison pill in place. HudBay’s chief executive David Garofalo said if regulators strike down the poison pill, that would make the shareholder vote moot.
Augusta’s Rosemont copper asset holds nearly six billion pounds of copper reserves and will be the third-largest copper mine in the United States once in production. It would push HudBay closer to the big leagues if the company succeeds in buying Augusta.
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