Vancouver, B.C. -Augusta
Resource Corporation (“Augusta” or the “Company”) announces that it has
entered into a letter agreement pursuant to which a syndicate co-led by
Salman Partners Inc. and BMO Nesbitt Burns Inc., and including TD
Securities Inc. and Wellington West Capital Markets Inc. will act as
agents for a private placement of up to 17,100,000 special warrants of
the Company at a price of $2.05 per special warrant, for gross proceeds
to the Company of up to $35,055,000. In addition, the agents have the
option to increase the offering size by up to 10% or 1,710,000 special
warrants at the same price per additional special warrant at any time up
to 48 hours prior to the closing of the offering. If this option is
exercised in full, the total gross proceeds to the Company from the
offering would be $38,560,500.
Each special warrant is convertible,
without payment of additional consideration, into a unit consisting of
one common share and one-half transferable common share purchase
warrant. Each whole warrant will entitle the holder to acquire, at any
time within two years from the closing of the offering, one common share
of the Company at a price of $3.10 during the first year from closing
of the offering and $4.10 during the second year from closing of the
offering. The Company has agreed to use its reasonable best efforts to
file and obtain a receipt for a short form prospectus to qualify the
distribution of the common shares and warrants underlying the special
warrants as soon as possible, and if the prospectus has not been cleared
by the applicable securities regulatory authorities by March 31, 2006,
then the special warrants will entitle the holders to acquire 1.1 common
shares and 0.55 of one warrant on exercise of each special warrant. The
special warrants will automatically be exercised into units on the date
that is the earlier of (a) one business day after the date the receipts
for the prospectus have been issued by the applicable securities
regulatory authorities and (b) the date that is four months and one day
after the closing of the offering.
The offering is expected to close on
March 9, 2006. Proceeds from the private placement will be used to
complete the purchase of 100% of the Rosemont property located in Pima
County, Arizona, complete a bankable feasibility study of Rosemont,
advance permitting at Rosemont, retire the balance of $3,000,000 plus
interest on its convertible debenture and for general working capital
purposes.
In consideration for their services, the
agents will receive a cash commission equal to 6% of the gross proceeds
from the offering and agent’s warrants exercisable into a number of
common shares equal to 6% of the number of special warrants sold. Each
agent’s warrant will entitle the holder to acquire one common share of
the Company at a price of $3.10 during the first year from closing of
the offering and $4.10 during the second year from closing of the
offering, subject to regulatory approval.
The securities (and all underlying
securities) will be subject to a four-month hold period under applicable
law (unless the prospectus qualifying the common shares and warrants
underlying the special warrants is filed prior to the expiry of the
four-month hold period). The transaction is subject to certain
conditions, including (but not limited to) the receipt of all necessary
regulatory and stock exchange approvals.
About the Company
Augusta is a mineral exploration and
development company responsibly advancing copper and other base metal
assets in the U.S. southwest. The Company’s Rosemont Property is located
in Pima County, approximately 50 km southeast of Tucson, Arizona, and
contains three known potentially open-pit copper/molybdenum (“Cu/Mo”)
deposits. The Rosemont deposit contain 6.4 billion lbs of Cu equivalent
(442,000,000 tons at 0.73% Cu equivalent) in measured and indicated
resources and 1.9 billion lbs of Cu equivalent (145,000,000 tons at
0.67% Cu equivalent) in inferred resources. Please refer to the
Company’s news release dated January 24, 2006 for further details.
Augusta has additional exploration properties in Nevada and New Mexico.
The Company is traded on the Canadian TSX Venture Exchange under the
symbol ARS.
For additional information please visit www.augustaresource.com or contact:
ON BEHALF OF THE BOARD OF DIRECTORS
“Gil Clausen”
_________________________
Gil Clausen
President and CEO
* NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES * OR FOR DISSEMINATION IN
THE UNITED STATES
FORWARD LOOKING STATEMENTS
The statements that are not historical
facts are forward-looking statements involving known and unknown risks
and uncertainties that could cause actual results to vary materially
from targeted results. Such risks and uncertainties include those
described from time to time in the Corporation's latest annual report
and management discussion and analysis. The Corporation assumes no
obligation to publicly update any forward-looking statements, whether as
a result of new information, future events or otherwise.