Hudbay Minerals, Augusta Resource Agree To Friendly Acquisition - Quick Facts

(RTTNews) - HudBay Minerals Inc. (HBM, HBM.TO) and Augusta Resource Corp. (AZC, AZC.TO) announced Monday that they have reached a definitive support agreement by which Hudbay has agreed to increase the consideration that will be received by Augusta shareholders under Hudbay's offer to purchase all of the issued and outstanding common shares of Augusta not already owned by Hudbay.

As per the Revised Offer, in addition to 0.315 of a Hudbay common share as provided in Hudbay's original offer, Augusta shareholders will also receive 0.17 of a warrant to acquire a common share of Hudbay for each Augusta common share.

Based on Hudbay's closing share price on the TSX on June 20, 2014, the Revised Offer represents consideration of approximately C$3.56 per Augusta common share, consisting of C$3.24 of share consideration and C$0.32 of warrant consideration. This is a 10% premium to Hudbay's initial offer of 0.315 of a Hudbay common share for each Augusta common share and a 42% premium to Augusta's closing share price on the TSX on February 7, 2014 prior to Hudbay's initial offer.

The Revised Offer represents a total equity value of C$555 million based on 100% of the fully-diluted, in-the-money common shares of Augusta, including those already owned by Hudbay.

Upon their issuance, the warrants will have an initial term of 4 years, and each full warrant will be exercisable for one common share of Hudbay at an exercise price of C$15.00 on the expiry date of the warrants.

Augusta's Board of Directors unanimously recommended that Augusta shareholders accept the Revised Offer and has agreed to terminate Augusta's Shareholder Rights Plan to permit shareholders to do so.

Under the terms of the support agreement, Augusta has agreed, among other things, to a customary non-solicitation provision, to grant Hudbay a right to match any alternative transaction proposal made by another party, and to pay a fee of C$20 million to Hudbay under certain circumstances if a transaction is not completed.