Augen Gold Corp.
TSX VENTURE : AUJ

Augen Gold Corp.

March 10, 2009 11:20 ET

Augen Gold Special Committee says Augen Capital News Release is Not Accurate

TORONTO, ONTARIO--(Marketwire - March 10, 2009) - Augen Gold Corp. ("Augen Gold") (TSX VENTURE:AUJ) announced today the response of its Special Committee to a news release on Friday, March 6, 2009 issued by Augen Capital Corp. ("ACC"). The Special Committee believes that the ACC's news release does not accurately reflect the Special Committee's findings and conclusions. Detailed information about the Special Committee's Interim Report dated March 4, 2009 may be found in Augen Gold's news release dated March 4, 2009.

The Special Committee was appointed to deal with a requisition (the "Requisition") made by ACC for a Special Shareholders Meeting and related matters. ACC's Requisition requested that the Board of Directors call a shareholder meeting (a) to approve the issuance of common shares of Augen Gold to ACC at an issue price of $0.125 per common share, in "full satisfaction of the outstanding debt owed" by Augen Gold to ACC; and (b) to remove all current directors of Augen Gold and replace them with other individuals.

Augen Gold's Special Committee responds to ACC's news release on March 6, 2009 ("ACC's news release") as follows:

(a) contrary to the second paragraph of ACC's news release, until Friday March 6, 2009, ACC had not previously offered a conversion price of 15 cents per share to shareholders.

In fact, ACC's only proposal to shareholders was 12.5 cents per share until the Special Committee completed its Interim Report and Augen Gold issued a news release describing the Special Committee's Interim Report, on March 4, 2009.

The Special Committee found a conversion price of 12.5 cents per share to be "inadequate, from a financial point of view, and ... not in the best interests of the shareholders of Augen Gold other than ACC".

(b) The Special Committee did not acknowledge that ACC's proposal for the conversion is in the interests of Augen Gold, contrary to the statement attributed to Mr. Mason in ACC's news release.

In fact, the Special Committee in its Interim Report found that "in view of the Corporation's circumstances, a shares-for-debt conversion in relation to certain financial advances made by ACC to Augen Gold at an appropriate price would be in Augen Gold's best interests" (italics added).

The Special Committee obtained technical and financial advice from Watts Griffis and McOuat Limited, Consulting Geologists and Engineers, in relation to the adequacy, from a financial point of view, of a conversion price of $0.125 per common share. The Special Committee also retained Bennett Jones LLP as its legal advisor.

(c) ACC was not "forced to call" the Special Shareholders' Meeting because the "Special Committee refused to respond" to ACC's proposals in respect of the conversion or refused to call a Special Shareholders Meeting.

In fact, the Special Committee was formed by the unanimous Resolution of the Board of Directors, including David Mason, on January 8, 2009 to consider and deal with ACC's Requisition, including the conversion of ACC's debt into shares which required the Special Committee to obtain independent financial advice. By news release on January 14, 2009, ACC announced its intention to convene a Special Shareholders' Meeting.

The Special Committee also disagrees with other statements and allegations made in ACC's news release, and specifically ACC's allegation that the Special Committee "continues to work against Augen Gold's best interests".

The Special Shareholders Meeting called by ACC is currently scheduled for Friday, March 13, 2009.

Augen Gold is not soliciting proxies in respect of the Meeting and nothing in this news release should be regarded as a solicitation or request for a proxy, or a request to execute or not to execute a proxy or revoke a proxy, or a recommendation as to how shareholders of Augen Gold should vote at the Meeting.

About Augen Gold

Augen Gold is a gold exploration company with 24,042 hectares of mining claims over a 45-kilometre length located in Swayze Greenstone Belt, including the formerly producing Jerome Gold Mine and directly adjacent to the Young Shannon gold deposit. The Company's objective is to aggressively explore the Jerome mine in order to determine the gold potential along strike on the contiguous mining claims, and to continue to expand its property portfolio with highly prospective mineral assets.

For more information on Augen Gold, visit our website at www.augengold.ca.

The Company's documents may be accessed at www.sedar.com.

Shares outstanding: 24,925,685

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 Gold Corp.
    James Stephenson
    Director
    (416) 219-9791
    Website: www.augengold.ca