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Augusta Announces Mine
Truck Fleet Purchase and Finance Strategy
DENVER, CO, July 21, 2009 - Augusta Resource
Corporation (TSX/NYSE Amex: AZC) (Augusta or the Company) is pleased to
announce the signing of an agreement for the purchase of 23, 250-ton
Caterpillar 793F haulage trucks for its 100%-owned Rosemont Copper project in
southern Arizona. The purchase was made by Augusta�s wholly owned subsidiary
Rosemont Copper Company (Rosemont) from Empire Southwest LLC (Empire), a
Caterpillar dealership headquartered in Mesa, Arizona. Contingent with the
purchase agreement signed by the parties, Augusta and Caterpillar Financial
Services Corporation, USA (CFSC), have agreed on a term sheet for a capital
lease of the Caterpillar trucks and other related equipment for an amount up
to US$100 million.
Augusta Senior Vice President and CFO Raghunath
Reddy said: We are pleased to have Empire supply and support our fleet for
Rosemont with CFSC assisting us in equipment-based financing. We have now
kicked off the execution phase of our project financing strategy that
includes equipment-based financing, concentrate off-take financing and senior
debt financing.
Augusta is currently in negotiations with smelters for delivery of
concentrates with associated project financing commitments. The Company will
also look to traditional project finance banks for the balance of the senior
debt financing. Augusta strongly believes the project can sustain debt
financing of 65%-70% of the total project capital cost, which amounts to
approximately $625 million. We expect that equipment related financing,
concentrate off-take financing and senior debt financing will comprise US$150
million, US$200 million and US$275 million respectively of the total debt
requirement, said Mr. Reddy.
Great projects always get financed and Rosemont is no exception, said
Augusta President and CEO Gil Clausen. He added, The Rosemont bankable
feasibility study has detailed excellent economics and low production costs. Our
financing strategy for the remaining 30%-35% of the estimated US$900 million
capital cost is to pursue a number of alternatives including forward sales of
silver and gold production.
The contract value between Rosemont and Empire is approximately $82.2
million for the purchase of the 23 trucks, to be delivered in late 2010 and
early 2011. Rosemont is not required to deposit cash and not expected to draw
on any facility before July 2010.
Empire was selected to supply Caterpillar haul trucks due to their
excellent service support, Tier 2 engines for lower emissions, commitment to
technology with Mine Star GPS and Mesh systems and assistance with arranging
financing. Empire has a full service center in
Tucson, Arizona, approximately 50 kilometres from the Rosemont site.
About Augusta
Augusta is a base metals company focused on advancing the Rosemont Copper
deposit near Tucson, Arizona. Rosemont currently hosts a large
copper/molybdenum reserve that may account for about 10% of US copper output
once in production in late 2011 (for details refer to http://www.augustaresource.com/).
The exceptional experience and strength of Augusta�s management team,
combined with the developed infrastructure and robust economics of the
Rosemont project, will propel Augusta to become a solid mid-tier copper producer
by 2012. The Company is traded on the Toronto Stock Exchange and the NYSE
Amex under the symbol AZC, and on the Frankfurt Stock Exchange under the
symbol A5R.
For additional information
please visit http://www.augustaresource.com/ or
contact:
Meghan Brown, Investor
Relations Manager
tel 604 638 2002
email mbrown@augustaresource.com
CAUTIONARY STATEMENTS REGARDING FORWARD LOOKING
INFORMATION
Certain of the statements made and information
contained herein and in the documents incorporated by reference may contain
forward-looking statements or information within the meaning of the United
States Private Securities Litigation Reform Act of 1995 and
forward looking statements or information within the meaning of the Securities
Act (Ontario). Forward- looking statements or information include
statements regarding the expectations and beliefs of management. Forward
looking statements or information include, but are not limited to, statements
or information with respect to known or unknown risks, uncertainties and
other factors which may cause the actual results, performance or achievements
of the Company, or industry results, to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements or information. Forward-looking statements or
information are subject to a variety of risks and uncertainties which could
cause actual events or results to differ from those reflected in the
forward-looking statements or information, including, without limitation,
risks and uncertainties relating to the Company’s
plans at its Rosemont Property and other mineral properties, the
interpretation of drill results and the estimation of mineral resources and
reserves, the geology, grade and continuity of mineral deposits, the
possibility that future exploration, development or mining results will not
be consistent with the Company’s expectations,
metal recoveries, accidents, equipment breakdowns, title matters, labor disputes or other unanticipated difficulties with
or interruptions in production and operations, the potential for delays in
exploration or development activities or the completion of feasibility studies,
the inherent uncertainty of production and cost estimates and the potential
for unexpected costs and expenses, commodity price fluctuations, currency
fluctuations, failure to obtain adequate financing on a timely basis, the
effect of hedging activities, including margin limits and margin calls,
regulatory restrictions, including environmental regulatory restrictions and
liability, the speculative nature of mineral exploration, dilution,
competition, loss of key employees, and other risks and uncertainties,
including those described under “Risk Factors
Relating to the Company’s Business���
in the Company’s Annual Information Form dated
March 25, 2009. Should one or more of these risks and uncertainties
materialize, or should underlying assumptions prove incorrect, actual results
may vary materially from those described in forward-looking statements. Accordingly,
readers are advised not to place undue reliance on forward-looking statements
or information. We do not expect to update forward-looking statements or
information continually as conditions change, and you are referred to the
full discussion of the Company’s business
contained in the Company’s reports filed with the
securities regulatory authorities in Canada and the United States.
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