Augusta Resource Corporation announces that Augusta and Red Kite Explorer Fund LP (Red Kite) have signed a credit approved term sheet relating to a US$40 million senior secured loan and copper concentrate off-take agreement for the Rosemont copper project. Red Kite has issued a commitment letter subject to any required regulatory approvals and customary due diligence and legal documentation.

Proceeds from the loan will be used for the redemption of the existing US$40 million dollar short-term debt on the balance sheet of Augusta's 100% owned subsidiary Rosemont Copper Company. Interest will be payable at a rate of LIBOR plus 4.5%. The loan agreement is expected to close in February 2010 and will mature on the earlier of: (i) two years from the closing date, or (ii) the date of closing of the Rosemont project senior debt financing facility. Augusta retains maximum flexibility as the loan is pre-payable without penalty at any time prior to maturity. Augusta will also have a one-time option to be declared no later than 18 months after closing the loan agreement to extend the maturity date by one year for a fee of 2%.

Under the terms of the off-take agreement, Red Kite will purchase up to 15% of Rosemont's copper concentrates up to a maximum of 45,000 dry metric tonnes per year, for a period of 10 years, starting with commencement of commercial production, which is expected in 2012. The off-take agreement terms include market pricing and competitive payables for metals including benchmarked treatment and refining charges.

As part of the loan agreement the company will pay an origination fee of 2% and will also issue 1,666,666 warrants to Red Kite at closing. The warrants are exercisable into common shares of Augusta at C$3.90 per share for a period of three years.

Augusta President and CEO Gil Clausen said: This agreement is consistent with our strategy to leverage the outstanding quality of Rosemont concentrates to create a financing structure that minimizes equity dilution and enhances our ability to deliver the Rosemont project on schedule.

Augusta's project financing strategy anticipates a substantial portion of the estimated US$900 million capital cost being raised from multiple sources which may include equipment-related financing, concentrate off-take financing, and senior project debt. The Company anticipates that the remaining project capital cost will be secured largely through contributions from a precious metals by-products streaming agreement, which is currently under negotiation with interested parties.

Red Kite provides mining companies with project financing and metal off-take agreements for initiation or expansion of mine production. Red Kite operates across the global metals industry from offices in Bermuda, Hong Kong, London, New York, Shanghai and Sydney.

Augusta is being advised on the Rosemont project financing by Endeavour Financial International Corporation.

About Augusta
Augusta is a base metals company focused on advancing the Rosemont copper deposit near Tucson, Arizona. Rosemont hosts a large copper/molybdenum reserve that may account for about 10% of US copper output once in production in 2012 (for details refer to The Company is traded on the Toronto Stock Exchange and the NYSE Amex under the symbol AZC, and on the Frankfurt Stock Exchange under the symbol A5R.