attorney, author, charles carreon, federal litigation, sex.com, trial lawyer, white hat
"Even if the sun were to rise in the West, the Bodhisattva has only one way." Suzuki Roshi
Augusta Resources has never mined an ounce of minerals in any country. It is a Canadian paper creation powered by paperwork that is not highly regarded by the investment community.Let’s look at the financial numbers that are publicly available. In a July 21, 2009 press release, Augusta stated that it “strongly believes the project can sustain debt financing of 65% – 70% of the total project capital cost, which amounts to approximately $625 million.” It “has no revenues from operations and does not expect to generate any revenues from operations in the foreseeable future,” and “the funds for the planned activities in 2009 and 2010 are expected to be raised from additional debt and equity financings.” It is currently living entirely on borrowed money. As of September 2009, it had only $14 Million in cash on hand and total liabilities of $40 Million, and recently raised $32.5 Million in an offering of common stock to fund its operations.
Meanwhile, Augusta has taken advantage of Arizona’s pro-mining water law to start drilling wells just south of Tucson that will very likely deprive thousands of residents and the City of Tucson of water for basic living purposes. Augusta will be able to pump 6,000 acre-feet of water a year, that’s 2 Billion gallons a year — worth about $5 Billion dollars when sold a gallon at a time to thirsty Arizonans. Augusta’s wells will deprive us of that water and provide nothing like a fair return on its value. Supposedly, Augusta will “recharge” the wells with CAP water, but what guarantee is there that it will ever perform this promise?
With 70% debt financing, if Augusta can’t meet its obligations, there is a great risk it will simply melt away, leaving Tucson poorer in copper, water, and quality of life. If Augusta is serious about pursuing this project, it should be required to post a performance bond for the entire cost of remediating all of the environmental damage, water use, and transportation expense that it will bring to the area. But where could they borrow that kind of money?
Prosecuting people for littering when they are putting out jugs of water to save lives is no different than jailing the Red Cross for trying to save the lives of people injured in battle. While prosecutors may pursue such cases, and juries may enter verdicts, and judges may impose sentences, based upon the notion that "the law" is being followed here, the truth is best stated by Charles Dickens' character, Mr. Bumble, who put it plainly: "If the law supposes that… the law is a ass—a idiot."
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