Augusta Resource Corporation
TSX : AZC
AMEX : AZC
FRANKFURT : A5R

Augusta Resource Corporation

May 05, 2008 18:09 ET

Augusta Files Q1 Financials, Provides Update on Permitting Activities

VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 5, 2008) - Augusta Resource Corporation (TSX:AZC)(AMEX:AZC)(FRANKFURT:A5R) ("Augusta" or the "Company") is pleased to announce it has filed its first quarter financial statements today. The Company reports a loss of $2.0 million for the three months ended March 31, 2008 compared to a loss of $1.5 million for the three months ended March 31, 2007. During the quarter cash disbursements for the Company totaled $9.8 million. Capitalized amounts related to development of the Rosemont project now total approximately $70 million. Copies of the financial statements and notes thereof and related management discussion and analysis may be obtained on SEDAR at www.sedar.com, or the Augusta website at www.augustaresource.com. All amounts are in Canadian dollars unless otherwise stated.

Project Expenditures

Project expenditures during the first quarter were directed at ongoing exploration and development activities. Rosemont Copper Company ("Rosemont"), a wholly owned subsidiary of the Company, placed a sizeable deposit on a major contract commitment with Polysius Corp. for the construction of a SAG and two ball mills. In April 2008, the Company entered into two more agreements, including a US$42 million contract with ABB Switzerland Ltd. for the supply of three gearless mill drives, and a second $56 million award for the engineering, procurement and construction management ("EPCM") contract with M3 Engineering & Technology Corporation ("M3") for the development and construction of the Rosemont project.

Update on Permitting Activities

The National Environmental Policy Act ("NEPA") process was officially launched last quarter when both the United States Forest Service ("USFS") and the Bureau of Land Management ("BLM") made determinations of completeness regarding Rosemont's Mine Plan of Operations ("MPO"). The MPO was deemed sufficient to initiate the process for preparing an Environmental Impact Statement ("EIS") under federal law. The activities relating to permitting that have been recently completed are summarized below:

- Rosemont entered into a Memorandum of Understanding with the USFS on the nature and schedule of EIS work, and completed a collection agreement with USFS and BLM to reimburse agency costs for their oversight and participation in the NEPA review.

- SWCA Environmental Consultants, one of the region's largest environmental consulting companies based in Arizona, was selected by the USFS as a third-party contractor to assist in completing the EIS. An employee-owned firm, SWCA has 450 staff based in 22 offices across the United States providing cultural and natural resource planning for both the public and private sectors.

- The USFS conducted a total of six public scoping meetings to gather comments from the surrounding communities, and approved the drilling of hydrology and geotechnical data gathering boreholes to provide information for the EIS.

- In keeping with community commitments to maintain traditional land uses, Rosemont acquired the Singing Valley Ranch, off Highway 83 near Greaterville, Arizona, as the permanent headquarters for livestock operations on the Rosemont Ranch. The 30,000-acre ranch provides a buffer zone around the Rosemont mining district and will continue as a predominant land use during and following mining operations.

- Rosemont acquired a 20-acre Sanrita East property as an additional water supply site, and agreed to acquire a 20-acre Sanrita South property as a potential recharge water management site and/or as a well field site. Both properties are located over the large alluvial aquifer to the west of the proposed mine site.

- Rosemont received notification from the Arizona Department Water Resources ("ADWR") that its 20-year permit for mine water supply was approved. ADWR also confirmed the importation and storage of 15,000 acre-feet of water within the Tucson Active Management Area during 2007. The Company continues on schedule to store an additional 15,000 acre-feet of water in 2008, adding a total of 4,483 acre feet of water in the first quarter.

Actions expected in the second quarter of this year include Rosemont approval to enter into a Well Protection Agreement with surrounding well owners near the Sanrita properties, located approximately 15 miles west of the Rosemont mine site, which will facilitate a detailed hydrology study of the area. President and CEO Gil Clausen stated, "Providing a detailed hydrology study, bringing CAP water to this area and having a recharge system in place for Green Valley is very important for all residents and clearly demonstrates our commitment to responsible development."

Building a Team - Constructing a Mine

The Company continues to add to its development team as it moves through the NEPA process towards construction. A key addition came early this year when the Company hired Kathy Arnold as Director of Environmental and Regulatory Affairs. Ms. Arnold is a registered professional engineer in environmental engineering with nearly 20 years of experience in the mining industry. She holds special expertise in the fields of environmental compliance, permitting, training, auditing and regulatory analysis. Ms. Arnold previously served as the Senior Environmental Engineer for consulting firms Tetra Tech Inc. and Vector Arizona, and prior to that with mining company ASARCO. She has Bachelor's degrees in computer science, mathematics and mineral process engineering, and a Master's degree in project and engineering management from the Montana College of Mineral Science & Technology. Her industry affiliations include the Society of Mining Engineers, where she served as the Arizona Conference Chair last year.

The proposed mine's workforce is estimated to total 500 full-time employees, who would earn an average annual wage of $59,000 plus benefits, according to a study by the Western Economic Research Center. Residents in the county would see a local increase of $156 million in direct revenues from Rosemont Copper and another $100 million generated through indirect contributions to personal incomes, business sales and local government incomes. Mining operations would also support another 1,200 indirect jobs in Pima County providing goods and services to Rosemont Copper.

ABOUT AUGUSTA RESOURCE CORPORATION - Augusta Resource Corporation is a base metals company focused on advancing the Rosemont Copper deposit located near Tucson, Arizona. Rosemont currently hosts a 7.2 billion pound copper resource that will account for 10% of US copper output once in production in 2011. The deposit also contains 180 million pounds of molybdenum and 75 million ounces of silver. A bankable feasibility study was completed in August 2007. The exceptional experience and strength of our management team, combined with the developed infrastructure and robust economics of this project, will propel Augusta to become a solid mid-tier copper producer within the next three years. The company is traded on the American Stock Exchange and the Toronto Stock Exchange under the symbol AZC, and on the Frankfurt Stock Exchange under the symbol A5R.

ON BEHALF OF THE BOARD OF DIRECTORS

Gil Clausen, President and CEO

CAUTIONARY STATEMENT 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 4, 2008. 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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