In the wake of federal wildlife regulators’ decision to reopen studies of the proposed Rosemont copper mine’s impact on endangered species, cash-strapped Augusta Resource Corporation has obtained a $6 million loan advance and now expects final federal approvals to be delayed until the 3rd Quarter.
Augusta has repeatedly stated in financial disclosures that it would receive a Final Record of Decision (ROD) from the U.S. Forest Service approving construction of the mine on federal lands and a Section 404 Clean Water Act permit from the U.S. Army Corps of Engineers by June 30.
But that deadline has now been swept aside because of recent developments involving endangered species and problems with Augusta’s application for the 404 permit that is required before construction can begin on the mile-wide, half-mile deep mine in the Santa Rita Mountains on the Coronado National Forest southeast of Tucson.
The missed deadline supports Hudbay Minerals Inc. repeated assertions during its contentious hostile take over bid for Augusta that the Vancouver, B.C. speculative miner’s permitting projections are overly optimistic.
With its back against the wall and funds running low, Augusta has once again turned to the London-based metals hedge fund Red Kite to provide it expensive, short term operating capital. Red Kite waived a loan condition that required Augusta to obtain the Final ROD before Augusta could draw $7.5 million from a $26.6 million loan granted last November.
Augusta stated Red Kite will now make available $6 million on June 2. The waiver conditions include a one-time fee of $175,000, which Red Kite will add to the loan balance. The balance of the $7.5 million will be advanced when Augusta receives the Final ROD from the Forest Service.
The November loan was the third time Red Kite has expanded its credit facility to Augusta that now totals $109.6 million. The loan terms allow Augusta to draw an additional $5 million upon receipt of the 404 permit. The Red Kite loan with interest totals $124 million and is due on July 21.
Augusta has been counting on receiving the Final ROD and 404 permit by June 30 in order to tap $336 million in contingent funding to repay the Red Kite loan when it comes due. But without the 404 permit and Final ROD, Augusta cannot tap a $230 million metals streaming agreement with Silver Wheaton or an additional $106 million from its joint venture partner, United Copper and Moly.
Augusta can extend the repayment date on the Red Kite loan until October 21, but it will be expensive. The extension fee is 1.5 percent of the outstanding principle per month.
Clausen said the loan advance provides Augusta the funding necessary to complete permitting and continue seeking alternatives to Hudbay’s hostile takeover bid that is now set to expire on May 27. Hudbay has repeatedly extended the deadline since launching its takeover bid last February. Augusta has implemented a shareholders’ protection plan (poison pill) to stymie Hudbay’s bid.
The timing of when, and if, the Forest Service will issue a Final ROD approving the Rosemont copper project is uncertain. The Forest Service said Friday it will not issue a Final ROD “until the consultation process is complete and a new biological opinion is issued.”
The consultations will include the mine’s potential impact on sensitive Sonoran Desert streams, springs and washes including those in the nearby federally-controlled Las Cienegas National Conservation Area that support several endangered species. The FWS and Forest Service will also review what impact the mine could have on the endangered ocelot. The wild cat has been recently photographed at least two times near the mine site.
Recent image of the ocelot taken in the vicinity of the proposed Rosemont mine.
Endangered species consultation between FWS and the Forest Service will also include a new evaluation of the mine’s impact on the endangered jaguar.
The consultations and preparation of a new biological opinion could last several months, if not much longer, depending on the complexity of the analysis.
In a permitting update also released Thursday, Augusta focused only on the ocelot and stated it expects the review to completed in less than 135 days because “the issues that would need to be addressed are limited and much of the analysis has already been completed.”
The endangered species review is not the only new hurdle facing Augusta.
The Army Corps earlier this month notified Augusta’s Rosemont Copper Company subsidiary that Rosemont’s application for the 404 permit falls short of federal regulations because it failed to provide adequate mitigation for damage to fragile desert water resources, raising the possibility the Corps will deny the permit.
THE PLOT AND SCRIPT FOR A HOLLYWOOD FEATURE MOVIE HAVE BEEN BORN . THE ACTORS WILL BE READILY AVAILABLE FROM A COLLECTION OF WHAT WILL SOON BE EX – AUGUSTA EXECUTIVES AND REDUNDANT GOVERNMENT OFFICERS .
WHETHER IT IS ” PULLING RABBITS FROM A HAT ” OR SELLING ” SNOW SHOVELS ” IN TUCSON , AUGUSTA ARE EXPERTS . THEY HAVE THE BEST SPINNING WHEEL AND SPIN THE FINEST ” YARN ” .
RED KITE IS GIVING AUGUSTA ENOUGH ROPE WITH WHICH TO HANG ITSELF . RED KITE ARE HARD CORE , HIGH RISK BANKERS AND LOAN SHARKS . THEY WILL GET THEIR MONEY INCLUDING INTEREST , HOWEVER THE AUGUSTA SAGA ENDS . THERE IS EQUIPMENT ” ON SITE ” THAT HAS A SIGNIFICANT VALUE . IF HUDBAY ARE THE VICTORS IN THE BATTLE OVER ROSEMONT THEY WILL INHERIT THE RED KITE DEBT . THE BIG LOSERS WILL ULTIMATELY BE THE AUGUSTA SHAREHOLDERS WHO WILL BE DAMNED IF THEY DO AND DAMNED IF THEY DON’T .
WHILE DEADLINES COME AND GO , AUGUSTA STICKS TO ITS MISLEADING MANAGEMENT STYLE . HONESTY AND TRANSPARENCY HAVE NEVER BEEN A PART OF THE AUGUSTA BUSINESS MODEL . UNFORTUNATELY , THE GOVERNMENT AGENCIES ARE PROVING TO BE NO MATCH FOR AUGUSTA . IT HAS TAKEN A WILLY OCELOT AND JAGUAR TO BRING AUGUSTA TO ITS KNEES . THIS IS MOTHER NATURE’S PAYBACK FOR THOSE WHO SHOW DISRESPECT OF HER AUTHORITY .
WILL THE ROSEMONT COPPER PROPERTY EVER BE BROUGHT INTO PRODUCTION ? EVEN IF HUDBAY OR A MYSTERIOUS WHITE KNIGHT REPLACE AUGUSTA WITH THE FINAL PERMITTING STILL IN DISARRAY , THERE WILL BE ENDLESS DELAYS . HOWEVER , COPPER IN THE GROUND IS A BIT LIKE MONEY IN THE BANK . AUGUSTA WILL TRY HARD TO ACQUIRE THE ROSEMONT PROPERTY EVEN IF IT HAS TO WAIT FOR HOWEVER LONG IT TAKES TO DEVELOP IT . MINING COMPANIES USE TIME TO THEIR ADVATAGE . ALSO , THEY OPERATE WORLDWIDE SO HAVING ROSEMONT AS INVENTORY FOR THE FUTURE WOULD BE AN ASSET .
IT IS TIME FOR A LAST EFFORT TO END THIS SAGA BY PRESSURING THE GOVERNMENT AGENCIES INVOLVED TO END THE PERMITTING PROCEDURE ONCE AND FOR ALL BY WHATEVER MEANS . THE EFFORTS OF THE OPPOSITION HAVE EXPOSED SO MANY IRREGULARITIES THAT SHOW THAT THE AUGUSTA APPLICATION IS SO BADLY FLAWED THAT IT IS NOT WORTH THE PAPER THAT IT IS WRITTEN ON . UNFORTUNATELY , THE ANCIENT MINING ACT CURRENTLY IN EFFECT IS MORE OF A HINDERANCE THAN A HELP . THERE IS A LOT OF WORK THAT NEEDS TO BE DONE IF MINERAL DEVELOPMENT IN THE USA IS TO BE A SUSTAINABLE ACTIVITY .
People stop reading when they see ALL CAPS.
ATTENTION READERS OF ROSEMONT MINE TRUTH
PLEASE NOTE THE FOLLOWING CORRECTIONS TO MY ABOVE REPLY DATED MAY 23 , 2014 @5:04 PM :-
1. IT SHOULD BE A WILY OCELOT AND JAGUAR , NOT ” WILLY ” .
2. IT IS HUDBAY AND NOT ” AUGUSTA ” WHO ” WILL TRY HARD TO ACQUIRE THE ROSEMONT PROPERTY EVEN IF IT HAS TO WAIT FOR HOWEVER LONG IT TAKES TO DEVELOP IT. ”
MY SINCERE APOLOGIES .
Good Golly Miss The Spin Doctor Pres Barry Soetoro The “Rope-A-Doper” Muslim President Is Calling The Shots For Alan Johnson??? Yikeess, Barry The Community Organizer In Chief Of The “Keystone Kops” And The Tree-Huggers Intl!! God Bless America And The Best Sheriff In The USA Joe Arpaio.
Alas, despite his self-imposed near ubiquity and trollful redundancy there really aren’t a lot of Good Golly Thomases left in this fight. But unlike the rarefied jaguar and ocelot seen on the Rosemont site, Tomcat’s presence doesn’t count for much. No studies needed; just hit mute.