Augusta Reports Mine Truck Fleet Purchase

 

DENVER, CO - Augusta Resource Corporation reported 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 from Empire Southwest LLC, 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 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.

The company’s address is 400 - 837 West Hastings Street, Vancouver, BC, V6C 3N6, 604.687.1717, fax: 604.687.1715.