AUGUSTA RESOURCE’S CEO GIL CLAUSEN TENDERS RESIGNATION FROM JAGUAR MINING BOARD OF DIRECTORS

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Shareholders cite Clausen’sexceedingly poor decision-making”, “gross failures of judgment” and “serious conflicts of interest”

Augusta Resource Corporation CEO Gil Clausen submitted his resignation from the board of directors of Jaguar Mining Corporation last Friday following a shareholder revolt aimed at forcing Clausen and two other directors off the board.

Mr. Clausen is the highest profile executive of Augusta Resource, whose subsidiary, Rosemont Copper Company, is seeking to a build a massive open pit copper mine in the Santa Rita Mountains on the Coronado National Forest south of Tucson.

Mr. Clausen’s offer to resign as Jaguar’s director could complicate Augusta’s efforts to avert a cash flow crisis and secure $404 million in long-term loans needed to construct the Rosemont mine.

Jaguar has gold mining operations in Brazil.

Bristol Investment Partners, LLC, Jaguar’s largest single investor, led the shareholder insurrection that resulted in more votes being withheld for Mr. Clausen, Gary German and John Andrews than were cast in favor of their reelection to the board.

All three offered their resignation following the meeting, with Mr. German stepping down immediately as Jaguar’s chairman.

The resignations, however, are not immediately effective.

“During the next 90 days, following receipt of a recommendation from Jaguar’s Corporate Governance Committee, the Board of Directors will consider each such resignation and announce its decision,” the company stated in a press release.

Jaguar has a six-member board of directors and it is unclear what role Messrs. Clausen, German and Andrews will have in determining whether to accept their individual resignations.

In a June 13 letter to Jaguar, Bristol Investment sharply criticized the three directors for “exceedingly poor decision-making and gross failures of judgment” and “serious conflicts of interest that impugn” their abilities to serve as directors.

Last week, prior to the June 29 Jaguar annual meeting, Bristol released a second letter it had sent to Jaguar and included excerpts from Glass Lewis, an independent proxy advisory firm, that also sharply criticized the actions of the three Jaguar directors.

Glass Lewis stated: “After review, we believe that shareholders should be troubled by the complaints brought forth by Bristol, as they certainly raise questions regarding the board’s ability to act in shareholders’ best interests.”

Bristol Investment cites the three directors’ handling of an all-cash offer last November by Shandong Gold Group to buy Jaguar for $9.30 a share. The offer represented a 73 percent premium over Jaguar’s share price of $5.39.

Jaguar did not accept the Shandong offer, which Bristol says was an “ill-advised and reckless gamble” that “backfired completely, inflicting enormous damage on Jaguar’s shareholders.”

Bristol claims that Mesrrs. Clausen, German and Andrews stood to reap millions of dollars in stock benefits if Jaguar was sold for $10 a share or more. Jaguar was trading at $1.19 at midday Tuesday.

Jaguar is generating negative free cash flow, and has serious balance sheet concerns with just $50-million of remaining cash and more than $300-million in debt, the Financial Post reported Tuesday.

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