TORONTO, July 17, 2014 /PRNewswire/ - HudBay Minerals
Inc. ("Hudbay") (TSX, NYSE: HBM) and Augusta Resource Corporation
("Augusta") (TSX, NYSE MKT: AZC) announced today that Hudbay
has taken up 116,233,761 common shares ("Augusta Shares") of
Augusta that were validly deposited under Hudbay's offer to acquire
all of the outstanding Augusta Shares not already owned by Hudbay
or its affiliates for consideration per Augusta Share of 0.315 of a common share of
Hudbay and 0.17 of a warrant to acquire a common share of Hudbay
(the "Offer"). The Augusta Shares taken up under the Offer,
together with those already owned by Hudbay, represent
approximately 92% of the issued and outstanding Augusta Shares.
All of the conditions to the Offer have been satisfied
(including that Augusta's shareholder rights plan be terminated)
and the initial offering period, which was extended until
July 16, 2014, is now closed. Hudbay
has taken up all Augusta Shares that were validly deposited under
the Offer and not properly withdrawn prior to 5:00 p.m. (Toronto time) on July
16, 2014. Payment for such Augusta Shares will be made in
accordance with the Offer.
Hudbay has extended the Offer until 5:00
p.m. (Toronto time) on
July 29, 2014 (the "Expiry Time") to
enable Augusta shareholders who have not yet tendered their Augusta
Shares to accept the Offer. The Augusta board of directors has
unanimously recommended that Augusta shareholders accept the Offer
and tender their Augusta Shares to the Offer. Each of the directors
and officers of Augusta has already tendered their Augusta Shares
to the Offer.
The extension of the Offer constitutes a "subsequent offering
period" under U.S. securities laws. The same form and amount of
consideration is being offered to shareholders depositing Augusta
Shares during this period as was offered to shareholders during the
initial offering period. Augusta Shares deposited under the Offer
after July 16, 2014 may be withdrawn
by or on behalf of the depositing Augusta shareholder at any time
before such Augusta Shares are taken up.
A notice of extension (the "Notice of Extension") has been filed
with the Canadian and U.S. securities regulatory authorities and
will be available for review at www.sedar.com and www.sec.gov. The
Notice of Extension is also being mailed to Augusta shareholders in
accordance with applicable securities laws.
It is anticipated that members of Hudbay's current management
team will assume management positions with Augusta and replace
Augusta's current senior management team and certain members of the
Augusta Board of Directors will be replaced by nominees of Hudbay.
In particular, David S. Bryson,
Alan T. C. Hair, Patrick Donnelly and Patrick Merrin will be appointed to the Augusta
Board of Directors, joining current directors Lenard F. Boggio, Timothy Baker and W.
Durand Eppler. Gilmour
Clausen, Christopher M. H.
Jennings, Robert P. Pirooz,
Robert P. Wares and Richard W. Warke will resign from the Augusta
Board of Directors.
As set out in the take-over bid circular and notices of
variations and change in respect of the Offer, Hudbay intends to
acquire any Augusta Shares not deposited under the Offer through a
subsequent acquisition transaction. The exact timing and details of
any such transaction will depend upon a number of factors. Although
Hudbay intends to propose a subsequent acquisition transaction
generally on terms similar to the Offer, it is possible that such a
transaction may not be proposed, may be delayed or abandoned or may
be proposed on different terms. Accordingly, Hudbay reserves the
right not to propose a subsequent acquisition transaction, or to
propose a subsequent acquisition transaction on terms other than
those of the Offer.
If permitted by applicable law, subsequent to the completion of
the Offer and any subsequent acquisition transaction, Hudbay
intends to delist the Augusta Shares from all stock exchanges and
to cause Augusta to cease to be a reporting issuer under the
securities laws of each of the provinces and territories of
Canada in which it has such status
and to cease to be a public company in the United States and Germany.
Hudbay will file an early warning report in compliance with
Canadian and United States
securities laws today with further information regarding its
ownership and control of Augusta Shares. A copy of that report may
be obtained by contacting Hudbay as indicated below.
Hudbay and Augusta also announced today that they have entered
into a loan agreement (the "Loan Agreement") pursuant to which
Hudbay has agreed to provide an unsecured loan facility in the
maximum aggregate amount of C$40
million to Augusta and its wholly-owned subsidiary, Augusta
Resource (US) Corporation. Such loan will accrue interest on the
unpaid principal amount at a rate of 8% per annum, calculated and
compounded quarterly. Advances under the Loan Agreement are subject
to customary conditions in the circumstances, including the change
to the Augusta Board of Directors (as announced here), and there
being no event of default with respect to either borrower. The loan
is intended to provide short-term working capital amounts to
Augusta and Augusta Resource (US) Corporation.
Hudbay and Augusta are related parties and the Loan
Agreement is a related party transaction. The principal amount of
the loan is, however, less than 25% of the market
capitalization of Augusta and the Loan Agreement is exempt from
valuation requirements under Canadian securities laws.
About the Offer
The Offer is for all of the issued and outstanding common shares
of Augusta not already owned by Hudbay, including any common shares
of Augusta that may become issued and outstanding after the date of
the Offer but before 5:00 p.m.
(Toronto time) on July 29, 2014 upon the exercise, exchange or
conversion of any securities of Augusta exercisable or exchangeable
for, convertible into or otherwise conferring a right to acquire,
any Augusta Shares or other securities of Augusta, together with
the associated rights issued under Augusta's shareholder rights
plan agreement dated as of April 18,
2013 between Augusta and Computershare Investor Services
Inc.
Hudbay has filed a registration statement on Form F-10 (as
amended, the "Registration Statement"), which contains a prospectus
relating to the Offer (the "Prospectus"), and a tender offer
statement on Schedule TO (as amended, the "Schedule TO") with the
Securities and Exchange Commission (the "SEC"). This news release
is not a substitute for the Offer documents, the Prospectus, the
Registration Statement or the Schedule TO or Augusta's Tender Offer
Solicitation/Recommendation Statement on Schedule 14D-9, as
amended. AUGUSTA SHAREHOLDERS AND OTHER INTERESTED PARTIES ARE
URGED TO READ THESE DOCUMENTS, ALL DOCUMENTS INCORPORATED BY
REFERENCE, ALL OTHER APPLICABLE DOCUMENTS AND ANY AMENDMENTS OR
SUPPLEMENTS TO ANY SUCH DOCUMENTS WHEN THEY BECOME AVAILABLE,
BECAUSE EACH WILL CONTAIN IMPORTANT INFORMATION ABOUT HUDBAY,
AUGUSTA AND THE OFFER. Materials filed with the Canadian securities
regulatory authorities are available electronically without charge
at www.sedar.com. Materials filed with the SEC are available
electronically without charge at the SEC's website at
www.sec.gov.
How to Tender
Augusta shareholders are encouraged to read the full details of
the Offer set forth in the Offer documents, which contain detailed
instructions on how Augusta shareholders can tender their Augusta
Shares to the Offer. For assistance in depositing Augusta Shares to
the Offer, Augusta shareholders should contact the depositary for
the Offer, Equity Financial Trust Company at 1-866-393-4891 (North
American Toll Free) or 416-361-0930 ext. 205 (outside North America) or by email at
corporateactions@equityfinancialtrust.com or the Information Agent
for the Offer, Kingsdale Shareholder Services at 1-866-229-8874
(North American Toll Free Number) or 1-416-867-2272 (outside
North America) or by email at
contactus@kingsdaleshareholder.com.
Important Notice
This news release does not constitute an offer to buy or the
solicitation of an offer to sell any of the securities of Hudbay or
Augusta.
About Hudbay
Hudbay (TSX, NYSE: HBM) is a Canadian integrated mining company
with assets in North and South
America principally focused on the discovery, production and
marketing of base and precious metals. Hudbay's objective is to
maximize shareholder value through efficient operations, organic
growth and accretive acquisitions, while maintaining its financial
strength. A member of the S&P/TSX Composite Index and the
S&P/TSX Global Mining Index, Hudbay is committed to high
standards of corporate governance and sustainability. Further
information about Hudbay can be found on
www.hudbayminerals.com.
About Augusta
Augusta (TSX, NYSE MKT: AZC) is a base metals company focused on
advancing the Rosemont Copper deposit near Tucson, Arizona. Rosemont hosts a large copper/molybdenum
reserve that would account for about 10% of U.S. copper output once
in production. Further information about Augusta can be found on
www.augustaresource.com.
For shareholder inquiries, please contact Kingsdale
Shareholder Services
1-866-229-8874 (North American Toll Free Number)
1-416-867-2272 (Outside North America)
contactus@kingsdaleshareholder.com
Cautionary Note Regarding Forward Looking
This news release contains "forward-looking statements" and
"forward-looking information" (collectively, "forward-looking
information") within the meaning of applicable Canadian and
United States securities
legislation. Forward-looking information includes information that
relates to, among other things, statements with respect to the
anticipated timing, mechanics, completion and settlement of the
Offer. Forward-looking information is not, and cannot be, a
guarantee of future results or events.
Forward-looking information is based on, among other things,
opinions, assumptions, estimates and analyses that, while
considered reasonable by us at the date the forward-looking
information is provided, inherently are subject to significant
risks, uncertainties, contingencies and other factors that may
cause actual results and events to be materially different from
those expressed or implied by the forward-looking information. The
material factors or
assumptions that we identified and were applied by us in drawing
conclusions or making forecasts or projections set out in the
forward looking information include, but are not limited to, the
accuracy of Augusta's public disclosure; the completion of the
Offer and any subsequent acquisition, the possibility of a
subsequent acquisition transaction, changes to Augusta's board of
directors and management, the loan agreement between Hudbay,
Augusta and Augusta Resource (US) Corporation, and Hudbay's
intentions with respect to Augusta.
The risks, uncertainties, contingencies and other factors that
may cause actual results to differ materially from those expressed
or implied by the forward-looking information may include, but are
not limited to, the market value of the Hudbay securities received
as consideration under the Offer and the impact of such issuance on
the market price of common shares of Hudbay and warrants to acquire
common shares of Hudbay, Augusta becoming a majority-owned
subsidiary of Hudbay after consummation of the Offer, the
possibility that Augusta may not satisfy the conditions precedent
to advances under the Loan Agreement as well as the risks discussed
under the heading "Risk Factors" in the Offer documents and other
documents filed (or to be filed) with Canadian and U.S. securities
regulatory authorities. Should one or more risk, uncertainty,
contingency or other factor materialize or should any factor or
assumption prove incorrect, actual results could vary materially
from those expressed or implied in the forward-looking information.
Accordingly, the reader should not place undue reliance on
forward-looking information. Hudbay does not assume any obligation
to update or revise any forward-looking information after the date
of this news release or to explain any material difference between
subsequent actual events and any forward-looking information,
except as required by applicable law.
SOURCE Augusta Resource Corporation