Arizona Sonoran's Shareholder Rights Plan: A Shield Against Undervalued Takeovers

In a strategic move to protect shareholder interests and maintain control over its long-term objectives, Arizona Sonoran Copper Company (ASCU) has adopted a shareholder rights plan, effective as of January 31, 2025. This plan, designed to safeguard shareholders against opportunistic takeovers, aligns with the company's commitment to developing the Cactus Project and becoming a mid-tier copper producer with low operating costs.



The Rights Plan, similar to those adopted by other Canadian companies, aims to ensure that all ASCU shareholders are treated fairly in connection with any take-over bid. It protects against "creeping bids," which involve the accumulation of more than 20% of the company's issued and outstanding common shares through purchases exempt from applicable take-over bid rules. The plan is not a response to any pending or threatened take-over bid but rather a proactive measure to safeguard shareholder value.

Under the Rights Plan, one right attaches to each issued and outstanding common share. If any person becomes a beneficial holder of 20% or more of the outstanding shares without complying with the "Permitted Bid" provisions, holders of the rights (other than the acquiring person and its related parties) will be permitted to exercise their rights to purchase additional common shares at a 50% discount to the then prevailing market price of the common shares.

ASCU's Independent Chair, David Laing, commented on the adoption of the Rights Plan, stating, "We expect that market confidence in the Cactus Project and management's go-forward plan will continue to improve through 2025, and we envision a positive valuation change as we continue de-risking Cactus and release the Project's Pre-feasibility Study later this year. In the meantime, the Rights Plan is designed to enable all ASCU shareholders to realize a more fulsome value of their investment by protecting against opportunistic parties who may seek to take advantage of ASCU's currently undervalued Common Shares."

The Rights Plan is subject to ratification by ASCU's shareholders within six months of its adoption. The Company will seek shareholder ratification at its 2025 annual meeting of shareholders, planned for a date yet to be determined in June. If the Rights Plan is not approved by the shareholders within six months of its adoption, the plan, together with the outstanding rights, will terminate and cease to be effective.

ASCU's adoption of the shareholder rights plan demonstrates its commitment to protecting shareholder value and maintaining control over its long-term strategic objectives. By implementing this plan, ASCU signals to the market that it is dedicated to ensuring that all shareholders are treated fairly in connection with any take-over bid and protecting against opportunistic parties seeking to take advantage of the company's currently undervalued common shares.

In conclusion, Arizona Sonoran Copper Company's adoption of the shareholder rights plan is a strategic move to protect shareholder interests and maintain control over the company's long-term objectives. By implementing this plan, ASCU demonstrates its commitment to ensuring that all shareholders are treated fairly in connection with any take-over bid and protecting against opportunistic parties seeking to take advantage of the company's currently undervalued common shares. This proactive measure aligns with ASCU's commitment to developing the Cactus Project and becoming a mid-tier copper producer with low operating costs.