Canadian securities regulations require publicly-traded companies like Augusta Resource Corporation to release quarterly Financial Statements and accompanying Management Discussion & Analysis reports within 45 days of the end of the quarter.
Augusta’s second quarter ended on June 30. Therefore, Augusta should have released the two reports by Tuesday, August 13.
But as of 3 p.m. today, August 14, the company has not posted the reports on its website, nor have they appeared on SEDAR.com, the Canadian national depository of publicly traded financial records.
Prior to releasing the financial reports, Augusta announced Tuesday it has agreed to borrow an additional $40 million from RK Mine Finance Trust I, increasing the total amount borrowed from RK to $83 million. Under an amended agreement, RK has agreed to purchase 20 percent of the gross annual production of copper until 1.5 million tons have been delivered.
Until Augusta releases its financial reports, it’s impossible to determine the long term impact of the additional $40 million RK loan. But at the previous rate of expenditures, the RK loan could carry Augusta into early next year.
Augusta has pledged all of its Rosemont Copper Company assets as collateral for the original RK loan. If the same terms are in place with the expanded loan and Augusta fails to repay the $83 million loan by July 14, 2014, then London-based RK Capital Management, a copper hedge fund, could assume control of Rosemont Copper Company.
The 2nd quarter financial statement and MD&A should provide crucial insight into Augusta’s deteriorating cash flow situation prior to the RK loan expansion.
At the end of the 1st Quarter on March 30, Augusta had less than $20 million cash on hand and was faced with more than $40 million in ongoing engineering and permitting expenses through the end of 2012.
Augusta continues to state that it will begin construction of the mine in early 2013.
However, ongoing permitting issues, particularly with the U.S. Forest Service review of public comments on the Draft Environmental Impact Statement and U.S. EPA’s concerns over the mine design raise significant questions as to when or even if this misguided project will ever materialize beyond Rosemont’s press releases and slick PR.
The financial condition is grim, but million dollar salaries are paid to executives. What does that tell you?
IT IS APPARENT THAT AUGUSTA IS DOING WHAT IT CAN DO BEST AND THAT IS TO DECEIVE THE AUTHORITIES RESPONSIBLE FOR ISSUING PERMITS INTO BELIEVING THAT IT HAS BEEN ABLE TO SECURE INVESTORS WHO WILL FUND THEM AS REQUIRED . IS AUGUSTA A SAFE VEHICLE FOR INVESTORS ? THERE APPEARS TO BE AN ELEMENT OF ” INSIDER TRADING ” TAKING PLACE WHICH IS DRIVING THE STOCK MARKET . THERE SHOULD BE ” RED FLAGS ” POPPING UP ALL OVER REGARDING ” RED KITE ” THROWING ” GOOD MONEY AFTER BAD ” . UNFORTUNATELY , POLITICS WILL WIN OUT IN THE END WHERE A DECISION WILL BE TAKEN THAT WILL ” BUY ” VOTES . AFTER ALL , THIS IS AN ELECTION YEAR . AUGUSTA’S TECHNICAL POSITION IS IN A STATE OF TATTERS FOLLOWING THEIR DECISION TO DELETE THE OXIDE ” ORE ” FROM THEIR MINE PLAN . DEMAND AN EXPLANATION FROM THE SECURITIES COMMISSION AS TO THE FAILURE OF AUGUSTA TO REPORT AS REQUIRED .