Frequently Asked Questions

How large is the Rosemont land package?

Augusta purchased fee land, patented mining claims and unpatented mining claims* totalling over 20,000 acres in or adjacent to the Coronado National Forest in Pima County, about 50 kilometers southeast of Tucson, Arizona. Included are fee land parcels referred to as the Rosemont Ranch, as well as an approximate 2,000-acre parcel of patented (surface and subsurface) mining claims. Also included are unpatented mining claims (subsurface mineral rights) on about 16,000 acres of public land that is administered by the U.S. Forest Service. Leases and water rights for the commercial livestock operation were included.

*Fee land is land not held in trust by the Federal Government for Native-American tribes or tribal members and is generally owned by non-tribal members. Patented mining claims are those that the Federal Government has passed ownership of the land and its minerals to a claimant, making it privately owned land. Unpatented mining claims are those that the Federal Government has passed mineral rights only to a claimant, not the land; the land still belongs to the Federal Government.

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How large is Rosemont’s copper mineral resource?

As announced in July 2012, Rosemont hosts a large copper/molybdenum reserve of 5.9 billion pounds of copper and 194 million pounds of molybdenum (667 million tons, with average grades of 0.44% copper and 0.015% molybdenum).  Rosemont’s measured and indicated sulfide resource includes 7.5 billion pounds of copper and 256 million lbs of molybdenum (919 million tons with average grades of 0.41% copper and 0.014% molybdenum).  In addition, there are 1.1 billion pounds of copper and 35 million lbs of molybdenum in the inferred category (139 million tons with average grades of 0.40% copper and 0.012% molybdenum).

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How much do you expect to produce and when do you expect to start production?

Rosemont’s 2012  feasibility study estimates expected production to be 243 million pounds of copper per year for a 21+ year mine life at an average annual cash cost of $1.02  per pound net of by-product credits. Production is targeted to commence in 2015. 

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What is the capital cost required to build the Rosemont mine and how will you finance it?

Total capital is estimated to be approximately $1.226 billion, including pre-development capital as provided by Rosemont’s 2012 feasibility study update. The Rosemont project has one of the lowest capital intensities amongst projects worldwide.   The Company currently plans to finance the project approximately 60% with debt and 40% with equity. With the LGI/KORES joint venture and the Silver Wheaton agreement, the Company has funded the project with minimal equity dilution. The remaining project debt portion to be financed is currently expected to be finalized by Q4 of 2013.  

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How long does the permitting process take in Pima County, Arizona?

The Company completed the first step of the permitting process when it filed its comprehensive Plan of Operations with the US Forest Service in July 2007. Using this plan as a basis for permitting, Augusta is now moving through the National Environmental Policy Act ("NEPA”) permitting process, whereby the US Forest Service has drafted an Environmental Impact Statement ("EIS”) and has concluded the public review process.

The US Forest Service is the official agency in charge of leading the process of reviewing potential project impacts and identifying relevant mitigation plans resulting from the Plan of Operations. As such, the US Forest Service is responsible for issuing the final EIS and "Record of Decision” after pubic review and comment. These documents and findings are then considered by other federal and state agencies as they review the permits required to initiate mineral development on the property.

After having completed the draft EIS and public review process, the USFS responds to the public comments and prepares the final EIS, after which the US Forest Service will issue a "Record of Decision” either approving the plan or providing recommendations for modifications to the plan. Subsequent to the "Record of Decision”, the Company will file a final Plan of Operations (incorporating any necessary modifications). It is then that permits would be issued allowing the Company to commence construction. Upon completion of this process, Augusta expects to receive approval to construct the mine in the third quarter of 2013 which will allow the Company to commence construction thereafter.

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What are the specific steps involved in the National Environmental Policy Act (NEPA) process?

The NEPA process began when Rosemont Copper Company submitted a comprehensive plan of operation to the US Forest Service on July 11, 2007. After review of the document, the U.S. Forest Service requested more information before completing the review in October 2007. The US Forest Service then issued a notice of intent to prepare an Environmental Impact Statement (EIS) on February 8, 2008.

The US Forest Service worked through a public scoping process to gather comments from the community before it began work on the draft EIS, disclosing potential environmental and social impacts. The draft included public comments and lists proposed modifications to the mining plan to mitigate concerns. The draft was released in October 2011, which initiated a 90-day comment period which concluded in January 2012. The Forest Service will then issue a final EIS. Soon after the release of the final EIS, the US Forest Service will file and publish in the Federal Register a record of decision which the Company expects to occur in the third quarter of 2013.

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To what extent will the US Forest Service land be used for support operations and hence require permitting approvals?

The Rosemont ore body itself sits on roughly 1000 acres of private lands, however the support operations will require about 3000 acres of US Forest Service lands. A federal Environmental Impact Statement is currently being prepared to support the permits required.

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Is there any risk under the Endangered Species Act in view of the location of the project close to a national park?

There is no national park related issue that affects Rosemont due to endangered species. We have surveyed the properties, and know the species of interest and concern. There is little chance of material issues to delay the project.

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What will Augusta do to protect water resources in Arizona?

The process of mining does require water, but conservation is a key consideration in planning. Augusta will do everything possible to conserve water. In fact, the Company plans to make a significant investment to utilize dry-tailings processing, which is used by other mines in desert areas around the world, but none in Arizona. This process requires more capital investment in equipment, but will recapture water sooner for reuse, and will allow Rosemont Copper to conserve water by eliminating evaporation from large tailing ponds.

Augusta will also use recycled water from a closed-loop mine water system to be developed and maintained on the site; however, there will still be consumption and evaporative loss from this water system that will need to be replaced. Augusta has contracts with the Central Arizona Project  ("CAP") to purchase 10,000 acre-feet of water per year for five years beginning in 2007. In addition, Augusta has committed to offset our use of water by 105% through the recharge of available CAP water into the Santa Cruz basin, thus returning more water than was used. By utilizing state-of-the-art water conservation techniques never before implemented by an Arizona copper mining facility, Rosemont Copper will use 50% to 60% less water than traditional mining operations.

Augusta has no legal obligation to replace the water it uses at the mine, but the company is firmly committed to sustainable development. Augusta can also seek additional water to be pre-stored into the aquifer at other storage and retrieval facilities within the basin.

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Does Augusta have to go through additional permitting process if/when additional resources are discovered?

The addition of facilities to, or deviation from, an approved Mine Plan of Operations is subject to NEPA review by the authorized officer of the relevant federal agency.

In the case of a minor change, such NEPA review is commonly determined to be non-material, and a categorical exclusion from further review results. In some cases, where a change is substantive enough to raise issues, controversy, or uncertainty, an Environmental Assessment is commonly adequate, with either of three possible results: Finding of No Significant Impact (process completed), Conditional Finding of No Significant Impact (list of stipulations that if followed, mitigate or eliminate impacts, and process is completed when operator accepts the conditions), or a finding of significance, in which case an EIS is required.

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