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Independent Auditors Report on Financial
  Statements

To the Shareholders of Augusta Resource Corporation

We have audited the consolidated balance sheets of Augusta
  Resource Corporation as at December 31, 2008 and 2007 and the consolidated
  statements of shareholders equity, operations and deficit and cash flows for
  the three years then ended. These financial statements are the responsibility of
  the Companys management. Our responsibility is to express an opinion on these
  financial statements based on our audits.

With respect to the consolidated financial statements for the
  years ended December 31, 2008 and 2007, we conducted our audits in accordance
  with Canadian generally accepted auditing standards and the standards of the
  Public Company Accounting Oversight Board (United States). With respect to the
  consolidated financial statements for the year ended December 31, 2006, we
  conducted our audit in accordance with Canadian generally accepted auditing
  standards. These standards require that we plan and perform the audit to obtain
  reasonable assurance about whether the financial statements are free of material
  misstatement. An audit includes examining, on a test basis, evidence supporting
  the amounts and disclosures in the financial statements. An audit also includes
  assessing the accounting principles used and significant estimates made by
  management, as well as evaluating the overall financial statement presentation.
  We believe that our audits provide a reasonable basis for our opinion.

In our opinion, these consolidated financial statements present
  fairly, in all material respects, the financial position of the Company as at
  December 31, 2008 and 2007 and the results of its operations and its cash flows
  in each of the three years ended December 31, 2008 in accordance with Canadian
  generally accepted accounting principles.

We have also audited in accordance with standards of Public
  Accounting Oversight Board (United States), the effectiveness of the Companys
  internal control over financial reporting as of December 31, 2008, based on
  criteria established in Internal Control-Integrated Frameworkissued by
  the Committee of Sponsoring Organizations of the Treadway Commission and our
  reported dated March 25, 2009 expressed an unqualified opinion
  thereon.

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|--------------- | ---------------------
|March 25, 2009  | Ernst & Young LLP    
|Vancouver, B.C. | Chartered Accountants

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|---------------------------- | -
|Augusta Resource Corporation | 3

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Independent Auditors' Report on Internal
  Controls under Standards of thePublic Company
    Accounting Oversight Board (United States)

TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF AUGUSTA
  RESOURCE CORPORATION

We have audited the internal control over financial reporting
  of Augusta Resource Corporation and subsidiaries (the Company) as of December
  31, 2008, based on the criteria established in Internal ControlIntegrated
    Frameworkissued by the Committee of Sponsoring Organizations of the
  Treadway Commission (the COSO criteria). The Companys management is responsible
  for maintaining effective internal control over financial reporting and for its
  assessment of the effectiveness of internal control over financial reporting,
  included in the accompanying Managements Report on Internal Control over
  Financial Reporting. Our responsibility is to express an opinion on the
  Companys internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the
  Public Company Accounting Oversight Board (United States). Those standards
  require that we plan and perform the audit to obtain reasonable assurance about
  whether effective internal control over financial reporting was maintained in
  all material respects. Our audit included obtaining an understanding of internal
  control over financial reporting, assessing the risk that a material weakness
  exists, testing and evaluating the design and operating effectiveness of
  internal control based on the assessed risk, and performing such other
  procedures as we considered necessary in the circumstances. We believe that our
  audit provides a reasonable basis for our opinion.

A companys internal control over financial reporting is a
  process designed to provide reasonable assurance regarding the reliability of
  financial reporting and the preparation of financial statements for external
  purposes in accordance with generally accepted accounting principles. A
  companys internal control over financial reporting includes those policies and
  procedures that (1) pertain to the maintenance of records that, in reasonable
  detail, accurately and fairly reflect the transactions and dispositions of the
  assets of the company; (2) provide reasonable assurance that transactions are
  recorded as necessary to permit preparation of financial statements in
  accordance with generally accepted accounting principles, and that receipts and
  expenditures of the company are being made only in accordance with
  authorizations of management and directors of the company; and (3) provide
  reasonable assurance regarding prevention or timely detection of unauthorized
  acquisition, use, or disposition of the companys assets that could have a
  material effect on the financial statements.

Because of its inherent limitations, internal control over
  financial reporting may not prevent or detect misstatements. Also, projections
  of any evaluation of effectiveness to future periods are subject to the risk
  that controls may become inadequate because of changes in conditions, or that
  the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the Company maintained, in all material respects,
  effective internal control over financial reporting as of December 31, 2008,
  based on the COSO criteria.

We have also audited, in accordance with Canadian generally
  accepted auditing standards and the standards of the Public Company Accounting
  Oversight Board (United States), the consolidated financial statements as of and
  for the year ended December 31, 2008 of the Company and our report dated March
  25, 2009 expressed an unqualified opinion on those financial statements.



|                |                      
|--------------- | ---------------------
|March 25, 2009  | Ernst & Young LLP    
|Vancouver, B.C. | Chartered Accountants

|                             |  
|---------------------------- | -
|Augusta Resource Corporation | 5

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