Augen Capital Corp.
TSX VENTURE : AUG

Augen Capital Corp.

November 15, 2010 12:12 ET

Augen Capital Ends Management Agreement

TORONTO, ONTARIO--(Marketwire - Nov. 15, 2010) - The Board of Directors of Augen Capital Corp. (TSX VENTURE:AUG) ("Augen Capital" or the "Company") is pleased to report that it has reached an agreement with Integrated Asset Management Corp. ("IAM") and its subsidiary, OreReserve Asset Management Inc. ("OreReserve"), to treat their respective rights and obligations under the Management Agreement (the "Management Agreement") as being fully discharged and at an end. The Company has also reached agreement with IAM's subsidiary, BluMont Capital Corporation ("BluMont Capital"), to treat their respective rights and obligations under the Master Agreement dated August 24, 2007 (the "Master Agreement") and various related agreements referred to therein, as being fully discharged and at an end. The new agreement is effective immediately.

Pursuant to the terms of the Management Agreement, Augen Capital was responsible for paying an annual management fee of at least $1,115,520 to OreReserve in exchange for OreReserve providing management services to the Company. Under the new agreement with IAM, OreReserve and BluMont Capital, Augen Capital has made a single, one-time, total payment of $650,000 in exchange for the other parties' agreement to release each other from their respective obligations under the Management Agreement and the Master Agreement. IAM remains a significant shareholder of Augen Capital.

In addition, Peter Chodos will be departing as President and CEO of the Company. The Board recognizes Mr. Chodos' work during his tenure at Augen Capital and extends its best wishes to him. As well, Stephen Johnson has resigned from Augen Capital's Board of Directors effective immediately.

The new agreement with IAM, OreReserve and BluMont Capital arose following a review by a Special Committee of the Company's Board of Directors, which consisted of independent members of the Board. The review focused on the terms of the Management Agreement. Following the review, the Company's board of directors adopted the Special Committee's recommendations regarding the Management Agreement. 

"Along with the Board of Augen Capital, I am satisfied with the outcome of our negotiations with IAM and OreReserve and pleased with the professionalism and business acumen displayed by all parties," said Alan Cruickshank, the acting President and CEO of Augen Capital. "Most importantly, I look forward to working with the Augen Capital Board and management to leverage our experience and grow our business in the areas of merchant banking and financing for small-cap resource companies. Our primary task is building value for our shareholders in the way Canadians do so well in the natural resources and energy sectors."

About Augen Capital

Augen Capital Corp. is a Toronto-based public merchant bank specializing in financing and investing in natural resource companies and projects. The Company is particularly focused on flow-through opportunities and other alternative financing arrangements.

This news release contains forward-looking statements. These statements are based on certain factors and assumptions as set forth in this news release, including expected growth, results of operations, performance and business prospects and opportunities. While Augen Capital considers these factors and assumptions to be reasonable based on information currently available, they may prove to be incorrect. A number of factors could cause actual results to differ materially from those in the forward-looking statements, including, but not limited to, results of exploration, project development, reclamation and capital costs of the companies in the merchant banking portfolios ("investee companies"), and Augen Capital's financial condition and prospects, all of which could differ materially from those currently anticipated in such statements for many reasons such as: changes in general economic conditions and conditions in the financial markets; changes in demand and prices for the minerals the investee companies expect to produce; litigation, legislative, environmental and other judicial, regulatory, political and competitive developments; and technological and operational difficulties encountered in connection with the activities of Augen Capital and investee companies. Additional risks and uncertainties can be found in the Company's Management's Discussion and Analysis and in filings with the Canadian provincial securities commissions, available on SEDAR (www.sedar.com). Forward-looking statements are given only as at the date of this news release and Augen Capital disclaims any obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.

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.

Contact Information

  • Augen Capital Corp.
    Robin Sundstrom
    VP Investor Relations
    647-822-8111