More damaging information is emerging about Augusta Resource Corporation’s executive leadership, this time for Augusta President and CEO Gil Clausen.
Angry shareholders of Jaguar Mining Company, Inc. are seeking Clausen’s resignation from Jaguar’s Board of Directors at the June 29 annual meeting. Jaguar is a Canadian incorporated gold mining company with operations in Brazil and corporate headquarters in Concord, NH.
Bristol Investment Partners, LLC, the largest shareholder of Jaguar, released a sharply worded letter today (click here) criticizing Clausen and two other Jaguar directors for “exceedingly poor decision-making and gross failures of judgment” and “serious conflicts of interest that impugn” their abilities to serve as directors.
Bristol 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 Clausen and directors Gary German and John Andrews stood to reap millions of dollars in stock benefits if Jaguar was sold for $10 a share or more. Clausen, German and Andrews are the “Lead Directors” of Jaguar.
“Clearly, the interest of the Lead Directors were substantially misaligned with the interests of shareholders as the Lead Directors assessed the US$9.30 change of control proposal from Shandong,” the letter states.
The Jaguar shareholder revolt could raise problems for Augusta, where Clausen is the highest profile executive of the company whose subsidiary, Rosemont Copper, is seeking to a build a massive open pit copper mine in the Santa Rita Mountains south of Tucson.
Augusta has been unsuccessful in a more than two-year effort to secure $400 million in long term debt financing for the Rosemont project.