Battle royal over US copper mine |
- Battle royal over US copper mine
- Barrick to launch 'vigorous defence' against Pascua Lama class action
- India gold bar imports plummet but diamonds rock
| Battle royal over US copper mine Posted: 04 May 2014 05:07 PM PDT Friday was a good and bad day for Augusta Resource Corp (TSE:AZC) (NYSE MKT:AZC). The Vancouver company is advancing the Rosemont copper project in Arizona and is at the same time fighting off a hostile takeover bid by fellow Canadian firm Hudbay Minerals (TSE:HBM) launched in February. At stake is a copper-molybdenum-silver mine which when built will be the third largest copper operation in the US and supply 10% of the country's red metal. On Friday investors in Augusta voted overwhelmingly to keep in place a shareholder rights plan, or 'poison pill', which holds back the all-share takeover by Hudbay at least for a couple of months. The provisions of the poison pill plan would see the automatic issuing of new shares should any one entity take control of more than 15% of Augusta's outstanding stock, neutralizing any Hudbay acquisition attempt. Hudbay, which has been picking up Augusta shares on the open market for months, asked the British Columbia Securities Commission (BCSC) to cancel the rights plan ahead of the expiry of its offer on Monday. But late on Friday the regulator said the poison pill can stay. But only until 15 July, by which time it will be thrown out if Augusta cannot find a white knight should Hudbay as expected extend the offer. Augusta said it has signed confidentiality agreements with more than 10 entities and is actively engaged in talks with possible bidders that can top Hudbay which it accuses of "swooping in at the last minute" with an offer it has characterized as "opportunistic", "lowball" and "grossly inadequate". The company hopes to start building the mine in the second half of this year with first production early in 2017. Augusta still needs to raise nearly $900 million in project financing for the $1.3 billion project. For its part Hudbay has raised doubts about Augusta's ability to find the necessary funds and pointed to what it calls "deep financial problems" and an "overly optimistic" timeline on permitting.  What sent Augusta shares tumbling nearly 6% on Friday was news of permitting delays and approval problems for the proposed mine located in Pima County, approximately 50 kilometres southeast of Tucson, Arizona. The US Forest Service is pushing out a decision on the project by at least a month in order to respond to 100 comments and objections and the Army Corps of Engineers informed Augusta that there is a "shortfall" in its water use plans and that it is still investigating other permitting criteria. Rosemont has proven and probable reserves of 5.9 billion pounds of copper and 194 million pounds of molybdenum with annual production set for 243 million pounds of copper, 5.4 million pounds of moly and 2.9m ounces of silver over its 21-year life.  |
| Barrick to launch 'vigorous defence' against Pascua Lama class action Posted: 04 May 2014 12:10 PM PDT The world's number one gold miner Barrick Gold said over the weekend it would "vigorously defend" against a class action lawsuit over its troubled Pascua Lama project in South America. The Merchant Law Group recently filed the lawsuits with courts in Ontario and Alberta on behalf of investors who acquired Barrick stock between May 7, 2009 and May 23, 2013. Shares in the $22.3 billion company lost 44% of its value over that time period, with a large chunk of the losses coming in April and May last year when the Toronto-based firm tapped markets for $3 billion to pay down debts. The class actions allege that Barrick Gold shareholders lost billions of dollars as a result of Barrick's "misrepresentations and failures" regarding the stalled $8.5 billion project and names the company as well as chief executive Jamie Sokalsky, chief financial officer Ammar Al-joundi and former chief executive Aaron Regent. "The company is aware that a notice of action has been filed in the Ontario Superior Court of Justice. Barrick disputes the allegations, and will defend itself against any lawsuit vigorously," Barrick spokesperson Andy Lloyd said in an emailed statement to tells Mining Weekly .  Barrick gold stopped construction of Pascua Lama in October as part of its debt-reduction and cost-cutting program and after fierce opposition from local communities and environmental groups. The project which straddles the Chilean-Argentinian border high in the Andes, suffered a number of defeats in Chilean courts about water use and the impact on glaciers in the area. Argentina has been a vigorous backer of the project. While only around a fifth of the deposit is located in Argentina many of the above-ground facilities will be built on that side of the border. Barrick recently laid off 1,500 of the 5,000 workers on the Argentinian side. If it goes into production the mine is expected to produce about 800,000 to 850,000 ounces of gold and 35 million ounces of silver in the first five years of its 25 year life. Barrick is spending $300 million this year to mothball the project, but Pascua Lama has a long history that dates back to the mid-1990s. Here's a timeline up to the suspension of the project in October 2013: |
| India gold bar imports plummet but diamonds rock Posted: 04 May 2014 11:05 AM PDT India's finance ministry, fighting a crippling current account deficit and a weakening currency pushed up gold import duties tenfold – from 1% at the start of 2012 to 10% today. Other measures including excise duties at 9% and new rules such as strictly cash only for imports, a rule that calls for the re-export of 20% of all imports, transaction taxes and even bans on gold-backed exchange traded fund investments have all stymied India's gold industry. The measures are having the intended effect with new data from the country's Gems and Jewellery Export Promotion Council showing imports of gold bars fell 47% to Rs32,540 crore ($5.4 billion) in the 2013-14 fiscal year. With no onerous duties to contend with diamond trading showed robust growth with imports of rough increasing 24% Rs100,374 crore ($16 billion). India is a diamond cutting hub and shipments of cut and polished gems rose 31% to Rs39,586 crore ($6.6 billion). Government import restrictions have led to a scarcity of physical gold inside India which increased smuggling activity and sent premiums paid over the London price to rocket to as much as $130 an ounce during the gold festivals and wedding season. It has since come down but premiums still hover at the $50 level. Despite the curbs overall Indian consumption still rose by more than 100 tonnes to 975 tonnes last year while according to some estimates "unofficial imports" almost doubled to more than 100 tonnes. Image by deepatheawesome |
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