Augusta Resource Corporation is continuing the mantra in its annual proxy statement released last week that the final major permit for its Rosemont copper project will be issued before July and that construction will begin later this year.
And, once again, Augusta’s Board of Directors urges shareholders to reject an unsolicited takeover offer from HudBay Minerals Inc.
Vancouver, B.C.-based Augusta continues to state in filings to Canadian and U.S. regulators that it is “confident” the U.S. Army Corps of Engineers will issue a Clean Water Act 404 permit by the end of the second quarter to its Rosemont Copper Company subsidiary, despite serious concerns the Corps raised in February about Augusta’s permit application.
Augusta’s April 7 proxy, formally known as the Management Information Circular (MIC), is the fourth consecutive regulatory filing the Company has made without disclosing a Feb. 28 Army Corps letter sent to Rosemont president Rodney Pace.
In the letter, the Corps warned Rosemont that its mitigation plan to compensate for damage to Waters of the United States (WUS) from its proposed open-pit copper mine did not meet federal regulations.
The Corps told Rosemont that it will inform the U.S. Forest Service on April 16 whether Rosemont’s mitigation plan to compensate for the destruction of wetlands, springs and seeps that will result from construction of the massive open pit mine meets federal regulations.
The Coronado National Forest is reviewing written objections to its Final Environmental Impact Statement and is expected to provide written responses by the end of the month as part of its process in determining whether to issue a Final Record of Decision approving the mine.
The U.S. Environmental Protection Agency, which has veto authority over the Corps permitting, has repeatedly stated that it has serious concerns over issuing the Clean Water 404 permit. EPA has long warned that the Rosemont project is a “candidate” for additional review by the Army Corps and EPA headquarters in Washington, D.C. before a decision is made on whether to issue the permit. Last November, EPA asked the Army Corps to deny Rosemont’s permit.
Rather than disclosing serious issues concerning the Army Corps permit, Augusta is claiming that it is essentially a foregone conclusion the company will receive the last of eight major permits it needs to begin construction on the massive open-pit mine planned for the Santa Rita Mountains on the Coronado National Forest 35 miles southeast of Tucson.
“The reality remains that after nearly six years of effort, Augusta is on the cusp of finalizing the permitting process for the construction of its Rosemont project with the understanding that when the last permit and approval are obtained, there are obvious and significant positive value implications for the Shareholders,” the company’s MIC states.
“Augusta,” the MIC states, “is confident that the last major permit, the Army Corps of Engineers’ Clean Water Act 404 permit, will be issued by the end of the second quarter of 2014.”
The company’s Board of Directors claims that once the permit is in hand, that it “is confident that the Rosemont project will be fully financed, and that construction will commence, in mid-2014.”
Augusta is asking shareholders to ratify its “shareholder protection plan” at its Friday, May 2, 2014 annual meeting in Vancouver. Augusta’s shareholders approved the plan last fall. The plan triggers a series of actions designed to thwart HudBay’s hostile takeover bid. HudBay’s offer expires the following Monday.
HudBay is already Augusta’s largest single shareholder with a 15.86 percent stake in the company controlling 23 million of the 145 million shares outstanding.
“The HudBay Offer,” Augusta states, “fails to recognize the strategic value of Augusta’s world-class Rosemont project.” Augusta touts Rosemont as a “scarce, large scale, construction ready copper asset” in a “safe, politically stable” jurisdiction. Augusta says the Rosemont is a “low cost project” and “offers expansion and exploration potential.”
The HudBay offer, Augusta states, is “highly predatory and coercive, in addition to being grossly inadequate and highly opportunistic.”
Augusta reports that 10 “interested parties” including “significant industry players” have signed confidentiality agreements with Augusta to review the company’s finances that could lead to additional bids for the company. Augusta states that it is conducting site visits for the potential bidders that will continue over the next two weeks.
HudBay senior management will host a conference call on Thursday, May 1, 2014 to discuss the company’s first quarter 2014 results and provide an update on development activities that presumably will include a discussion on its bid for Augusta.