Hedge fund loans Augusta $40M
By Tony Davis
Arizona Daily Star
RK Mine Finance Trust, more commonly known as Red Kite, agreed to add $40 million to an existing $43 million loan to Vancouver-based Augusta Resource Corp., which owns the site of the proposed Rosemont Mine southeast of Tucson. Augusta announced the expanded loan last week.
Augusta, amidst a five-year struggle to obtain permits for the mine, had $9.6 million cash on hand at the end of the second quarter of 2012, down from $31 million at the start of 2012 and $49 million a year ago. That’s according to the company’s new financial statement, which was filed last week with Canadian securities regulators.
At its current spending rate, the company would have had no cash by the end of September without the expanded Red Kite loan or another outside investment. Augusta’s $53.3 million total liabilities, including the original Red Kite loan, exceeded its assets by more than $37 million at the end of the second quarter before the expanded Red Kite loan was announced, the company’s new financial statement said.