Augusta Resource Corp., the base metals company developing the Rosemont deposit near Tucson, Arizona which has an estimated 2012 capacity of 10% of US copper output, announced yesterday the signing of a definitive agreement with Silver Wheaton Corporation for 100% of the payable silver and gold produced at Rosemont.

With final permits slated for 4Q 2010, and an estimated production capacity of 2.4M ounces of silver and 15,000 ounces of gold per year, and with a lifespan of 20 years according to the 2009 Rosemont Updated Feasibility Study, Rosemont’s rich copper/molybdenum reserves offer a sustainable profit margin for the foreseeable future.

Augusta will receive up-front cash payments amounting to $230M and subsequent payments for $3.90/oz. silver and $450/oz. gold (or prevailing market price if lower) from Silver Wheaton. Some of the funding for construction at Rosemont will derive from this initial payment, which will be drawn after permitting.

President and CEO of AZC Gil Clausen hailed Silver Wheaton as a “proven market leader” and noted the financing would cover 25% of the project’s cost for less than 5% of total revenue, clearly proving that this reserve is a low-cost and robust development which will provide a secure, long-term investment for Silver Wheaton.

Mr. Clausen also pointed out that, between the company’s current $75M investment and this upfront investment by Silver Wheaton, future shareholder equity dilution would be minimized.

Augusta projects that 70% of the $890M in cost for Rosemont will come from debt, and the company is continually moving forward with financing opportunities from many interested credit agencies and lending institutions, having retained Endeavour Financial as project finance advisor.