* Signs JV agreement with South Korean group for $176 mln
* Group led by Korea Resources Corp, LG Int'l Corp
* Shares up as much as 21 pct
(Recasts; adds details, analyst comment, share data)
Sept 16 Augusta Resource Corp AZC.TO sold a
20 percent stake in its key Arizona copper project, moving
closer to securing complete funding for the project and
significantly reducing the need for further share sales,
sending its shares up 21 percent.
In the past, the company has tapped equity markets and
raised debt to fund this project, which is expected to account
for about 10 percent of total U.S. copper production.
The company's unit, Rosemont Copper Co, signed an earn-in
agreement with a Korean consortium, comprising state-run
resources explorer Korea Resources Corp and LG International
Corp (001120.KS), to sell a 20 percent stake in the Canadian
company's Rosemont copper-molybdenum project in Pima County,
"The joint venture arrangement significantly reduces the
need for further equity issuance and supports our view that the
project is technically robust," BMO Capital Markets analyst
John Hays wrote in a note to clients.
"The additional funds provide working capital as the
project moves through the permitting process and improves the
company's balance sheet, which includes $44.3 million in debt,"
said Hays, who has an "outperform" rating on the company's
Including long-term debt, the company had total liabilities
of $52.2 million at June-end.
In addition to copper, Rosemont will produce significant
amounts of silver and molybdenum over its 20-year mine life,
In February, Augusta had signed an agreement to sell all
silver and gold produced its Rosemont project to Silver Wheaton
Corp (SLW.TO) for $230 million. [ID:nSGE61A0GU]
"The $176 million equity investment by KORES and LGI,
together with the $230 million in funding previously committed
by Silver Wheaton and combined with Augusta's contributions to
date will provide about 50 percent of the total project
funding," Chief Executive Gil Clausen said in a statement.
"We are well advanced in discussions with project finance
lenders for the balance of the funding."
Late last month, Augusta received C$30 million via a
private placement with HudBay Minerals Inc (HBM.TO) for 11
million shares at C$2.75 each.
Augusta's shares, which have risen 45 percent since the
announcement of the private placement, were up 9 percent at
C$3.48 in afternoon trade, Thursday on the Toronto Stock
Exchange. They touched a 23-month high earlier in the day.
(Reporting by Isheeta Sanghi in Bangalore; Editing by Roshni