March 13 Meeting to Proceed as Scheduled
Shares outstanding: 36,615,615
TORONTO, March 6 /CNW/ - Augen Capital Corp. ("Augen") (TSX-V: AUG) announced today that the special committee of Augen Gold Corp. ("Augen Gold") (TSX-V: AUJ) has concluded that the debt-to-shares conversion (the "Conversion") proposed by Augen Capital is in the best interests of Augen Gold.
The special committee's conclusion validates the position maintained by Augen Capital since December 2008. The special committee has also concluded that the Conversion should be at a price between $0.15 and $0.18 per share, rather than the $0.125 currently proposed. As it has previously offered, Augen Capital will agree to convert its outstanding loan to shares at $0.15 per share, despite the much lower market price of Augen Gold shares.
The special meeting of shareholders of Augen Gold will proceed on March 13, 2009 as scheduled. Augen Capital was forced to call the meeting because the special committee refused to respond to Augen Capital's proposals in respect of the Conversion, and refused to call a meeting when one was requisitioned by Augen Capital as the largest shareholder of Augen Gold.
"Augen Capital is pleased that the special committee now acknowledges that Augen Capital's proposal for the Conversion is in the best interests of Augen Gold. However, we are frustrated that the special committee has delayed the resolution of this issue to the detriment of Augen Gold," said J. David Mason, Chairman of Augen Gold and of Augen Capital.
"Augen Capital has at all times acted in the best interests of Augen Gold and its shareholders. We are disappointed that after advancing $1.1 million to Augen Gold in good faith to support the company, we had to requisition a shareholders' meeting to cause the special committee to agree to a commercial resolution," Mr. Mason said.
The special committee continues to work against Augen Gold's best interests by alleging that the special meeting of shareholders has not been validly called. This claim is unfounded and contradicts the special committee's conclusion that the Conversion is in Augen Gold's best interests since the rules of the TSX Venture Exchange require shareholder approval for the Conversion. Although the shareholder meeting is necessary, instead of cooperating, the special committee is trying to discredit Augen Capital and the decision of the shareholders at the meeting.
"It appears that the special committee's real agenda in challenging the validity of the meeting is to secure payment of fees to themselves and their advisers. Total expenditures by the special committee and its advisers now exceed $52,000 and the special committee has demanded another $60,000. Augen Capital believes fees of that size are unsupportable and irresponsible for an emerging exploration company in the current economic environment," Mr. Mason said.
Augen Capital continues to solicit proxies to approve the Conversion and to remove the incumbent directors who constitute the special committee and replace them with new independent directors. Shareholders are encouraged to vote in favour of Augen Capital's proposals at the special meeting on March 13, 2009.
About Augen Capital
Augen Capital Corp. (TSX-V: AUG) ("Augen") is a Toronto-based public merchant bank specializing in the financing of and investment in emerging resource companies. Augen manages a merchant banking hard dollar portfolio of emerging resource stocks including private companies and is an industry performance leader in tax-advantaged flow-through investments in Canada's resource sector having raised over $80 million in flow-through limited partnership assets since inception. Augen holds over one hundred gold, base metals and uranium exploration and development public and private companies with direct holdings in its merchant banking portfolio and consulting assets in flow-through limited partnerships.
For more information on Augen, visit our website at www.augencc.com Augen's public documents may be accessed at www.sedar.com Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
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