VANCOUVER, BC, January 16, 2009 - Augusta
Resource Corporation (TSX/NYSE Alternext: AZC) (“Augusta” or the
“Company”) has reached an agreement with ASARCO LLC that fully and
finally resolves the lawsuit ASARCO filed against Augusta and other
defendants on August 8, 2007 in the ASARCO Chapter 11 bankruptcy
proceeding pending in the Southern District of Texas, Corpus Christi
Division. The proceeding sought the return of the Rosemont property,
located approximately 50 kilometers southeast of Tucson, Arizona, which
Augusta acquired in 2006 from a real-estate development company that had
purchased the property from ASARCO in 2004.
“This settlement removes significant
uncertainty in our efforts to develop the Rosemont copper mine as a
cornerstone asset of Augusta,” said Gil Clausen, President and CEO of
Augusta. “We believe ASARCO’s complaint was completely unfounded.
Augusta purchased the property in good faith, and we are confident the
court ultimately would have vindicated Augusta’s position. Resolving
this matter through continued litigation could have taken months or
years, however, and potentially cost the Company several millions of
dollars in court fees, experts, and other expenses. We are extremely
pleased to resolve this distraction and turn all of our attention to
developing the Rosemont mine. Permitting, site work, and engineering
remain on schedule.”
The resolution currently is reflected in
a binding Terms of Settlement, and will be formalized in a
comprehensive Settlement Agreement to be approved by the Bankruptcy
Court presiding over ASARCO’s bankruptcy proceeding. In the settlement,
ASARCO will receive from Augusta the sum of US$250,000 cash within 14
days of court approval, in addition to sums the other defendants will
pay. Also, once commercial mine operations commence at the Rosemont
property, Augusta will pay ASARCO certain specified annual production
payments, without interest, over the course of eight years. These
payments will come solely out of the net profits of mine operations and
will not, in any year, exceed 25% of net profits. In the settlement,
Augusta has the right of a pre-production, pre-payment option for these
annual payments at the net present value of the aggregate annual
payments, using an agreed 18% discount rate. Should Augusta elect this
option during the calendar year 2009, it will pay ASARCO US$2.6 million.
It may elect to exercise this option at any time up to and during mine
production.
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 2012 (refer to
Augusta’s website at www.augustaresource.com for details). 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 within the next four
years. The Company is traded on the Toronto Stock Exchange and the NYSE
Alternext under the symbol AZC, and on the Frankfurt Stock Exchange
under the symbol A5R.
For additional information please visit www.augustaresource.com or contact:
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.