Augusta Resource Corp. (USA) (AMEX:AZC)
CAPS Rating:
The Company is engaged in the exploration and development of mineral properties located in Pima County, Arizona and White Pine County, Nevada.
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The Company is engaged in the exploration and development of mineral properties located in Pima County, Arizona and White Pine County, Nevada.
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May fluctuate in the short term but should be a tremendous performer in the 3-5 year range. Buy it, forget about it, and come back to it in 3 years. Here's why:
The have a "7.2 billion pound copper resource that will account for 10% of US copper output once in production in 2011. The deposit also contains 180 million pounds of molybdenum and 75 million ounces of silver."
They have already negotiated to sell 45% of their silver deposit to Silver Wheaton for $165 million for development costs ( a great deal for Wheaton if it comes to fruition).
Risks: Unable to get further financing, unable to get regulatory permits or the U.S. political climate turns against domestic mining.
(This does not constitute advice to buy or sell this security. Please complete your own due diligence.)
I have been onsite and seen the core samples. I am guessing it will be a Go. 3-5 year range is correct. Augusta has been extremely transparent through the whole process and been very patient with the naysayers.
Heavy opposition to this project including local elected officials due to ground water issues,air quality issues. No history of success of Rosemont's proposed "state of the art' Dry Stack Tailing method in the U.S. or climates like southern Arizona.
Rosemont's proposal to substitute lower quality CAP water for high quality ground water will not fly. In addition, there is no guarantee of future CAP water availability and no infrastructure to bring it to site. Arizona is in the bottom of the CAP water allotment priority. Water is more important to Arizona than copper.
Furthermore, Rosemont nor Augusta Resources have no history of profitable mining. All assets are encumbered by Hedge Fund which only extended the $40Million+ loan for one year. Highly speculative project that overstated number of jobs to be created, unable to mitigate major environmental impacts. Not likely to get final permit approval. If it does, will end up in courts for years. Better off speculating in Las Vegas.