Rosemont Mine Truth

Augusta Resource Corp. has turned to a corporate officer and an existing shareholder for $10 million to shore up its depleted cash reserves as the company awaits a crucial decision from the Coronado National Forest on its proposed Rosemont copper project, according to its Management Discussion & Analysis report that accompanies its 2^nd Quarter financial statement released today.

The Vancouver, B.C.-based speculative mining company states that an unnamed officer and a major shareholder will purchase $10 million in convertible unsecured notes. The five-year notes carry a 7% interest rate and the arrangement is expected to close Sept. 4, pending regulatory approvals.

This internal debt funding scheme comes as Augusta’s 2^nd Quarter financial statement shows the company had only $6.4 million in cash as of June 30, down from $29 million as of Dec. 31, 2012.

The $10 million in financing comes at a crucial time in the Rosemont copper project. Augusta is pressing the Coronado National Forest to issue a Final Environmental Impact Statement  (FEIS) and Record of Decision (ROD) to approve the open pit copper mine by Sept. 27 before new administrative rules take effect delaying issuance of a final decision on the mine at least 90 days. Continue reading →

Investors have greeted Augusta Resource Corporation’s announcement last week it has reached a preliminary financing agreement with a consortium of international lenders to provide capital to build its Rosemont copper project with a big yawn.

Augusta’s sagging stock continues to languish around $2 a share following Augusta’s Aug. 9 announcement that it has signed a “Mandate Letter” with 12 international financing institutions.

One likely reason for the underwhelming market reception to Augusta’s announcement is because no definitive financing agreement has been reached. Instead, Augusta’s latest agreement lays out a series of actions that still must be completed before final lending commitments are in place.

“The Mandate Letter sets forth the required steps, (emphasis added) including agreement on final terms and conditions and requisite documentation for the loan, completion of due diligence, and procurement of credit approvals, as well as time frames for completing these steps,” Augusta states. Continue reading →