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CODE OF BUSINESS CONDUCT AND ETHICS FORDIRECTORS, OFFICERS AND EMPLOYEES OFAUGUSTA RESOURCE
CORPORATION

Augusta Resource Corporation (the
Company) is committed to the highest standards of legal and ethical
business conduct. This Code of Business Conduct and Ethics (the Code)
summarizes the legal, ethical and regulatory standards that the Company must
follow and is a reminder to our directors, officers and employees, of the
seriousness of that commitment. Compliance with this Code and high standards of
business conduct is mandatory for every employee of the Company.

INTRODUCTION

Our business is becoming
increasingly complex in terms of the geographies in which we function and the
laws with which we must comply. To help our directors, officers and employees
understand what is expected of them and to carry out their responsibilities, we
have created this Code of Business Conduct and Ethics. Raghu Reddy, our Ethics
Officer will have the primary responsibility of overseeing adherence to the
Code.

This Code is not intended to be a
comprehensive guide to all of our policies or to all your responsibilities under
law or regulation. It provides general parameters to help you resolve the
ethical and legal issues you encounter in conducting our business. Think of this
Code as a guideline, or a minimum requirement, that must always be followed. If
you have any questions about anything in the Code or appropriate actions in
light of the Code, you may contact Raghu Reddy, the Companys Ethics Officer or
the Chairman of the Audit Committee.

We expect each of our directors,
officers and employees to read and become familiar with the ethical standards
described in this Code and to affirm your agreement to adhere to these standards
by signing the Compliance Certificate that appears at the end of this Code.
Violations of the law, our corporate policies, or this Code may lead to
disciplinary action, including dismissal.

Certain representatives may be
  required to adhere to this Code and as such will be asked to execute the Compliance
  Certificate that appears at the end of this Code as their agreement to comply
  with this Code in the same manner as applicable to our directors, officers and
  employees.

I.We Insist on
Honest and Ethical Conduct By All of Our Directors, Officers, Employees and
Other Representatives

We have built our business based
  on quality employees and representatives who adhere to the very highest standards
  of honesty, ethics and fairness in our dealings with all of our business contacts.
  We place the highest value on the integrity of our directors, our officers and
  our employees and demand this level of integrity in all our dealings. We insist
  on not only ethical dealings with others, but on the ethical handling of actual
  or apparent conflicts of interest between personal and professional relationships.

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Fair Dealing

Directors, officers and employees
are required to deal honestly and fairly with our business partners, suppliers,
competitors and other third parties.

In our dealings with business
partners, suppliers, competitors and other third parties, we:

- Prohibit bribes, kickbacks or any other form of improper payment, direct or
  indirect, to any representative of government, labor union, supplier or other
  business partner in order to obtain a contract, some other commercial benefit
  or government action;
- Prohibit our directors, officers and employees from accepting any bribe,
  kickback or improper payment from anyone;
- Prohibit gifts or favors of more than nominal value to or from our
  customers or suppliers;
- Limit marketing and client entertainment expenditures to those that are
  necessary, prudent, job-related and consistent with our policies;
- Require clear and precise communication in our contracts, our advertising,
  our literature, and our other public statements and seek to eliminate
  misstatement of fact or misleading impressions;
- Protect all proprietary data our customers or suppliers provide to us as
  reflected in our agreements with them; and
- Prohibit our representatives from otherwise taking unfair advantage of our
  customers or suppliers, or other third parties, through manipulation,
  concealment, abuse of privileged information or any other unfair-dealing
  practice.

Conflicts of Interest; Corporate
Opportunities

Our directors, officers and
employees should not be involved in any activity that creates or gives the
appearance of a conflict of interest between their personal interests and the
interests of the Company. In particular, without the specific permission of
Raghu Reddy, our Ethics Officer or our Board of Directors (including contracts
approved by our Board of Directors), no director, officer or employee, or a
member of his or her family shall, unless disclosed to the Company:

- Be a consultant to, or a director, officer or employee of, or otherwise
  operate an outside business that:

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| |  |                                                                                                                                                                                                                                                                                                                     | Is in competition with our current or potential business
      goals and objectives;                                                                                                      
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                           
| |  |                                                                                                                                                                                                                                                                                                                     | Supplies products or services to the Company;
or                                                                                                                                          
| |  |                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                           
| |  |                                                                                                                                                                                                                                                                                                                     | Has any financial interest, including significant stock
      ownership, in any entity with which we do business that might create or
      give the appearance of a conflict of interest;
| |  |                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                           
| |  | Seek or accept any personal loan or services from any
      entity with which we do business, except from financial institutions or
      service providers offering similar loans or services to third parties
      under similar terms in the ordinary course of their respective
      businesses;             
| |  |                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                           
| |  | Be a consultant to, or a director, officer or employee
      of, or otherwise operate an outside business if the demands of the outside
      business would interfere with the directors, officers or employees
  responsibilities to us, (if in doubt, consult your supervisor or Raghu Reddy Ethics Officer);
| |  |                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                           
| |  | Accept any personal loan or guarantee of obligations from
      the Company, except to the extent such arrangements are legally
      permissible; or                                                                                                                                                              
| |  |                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                           
| |  | Conduct business on behalf of the Company with immediate
      family members, which include spouses, children, parents, siblings and
      persons sharing the same home whether or not legal
  relatives.                                                                                                        

Directors, officers, and employees
must immediately notify Raghu Reddy, Ethics Officer or the Chair of our Audit
Committee of the existence of any actual or potential conflict of interest. The
circumstances will be reviewed for a decision on whether a conflict of interest
is present, and if so, what course of action is to be taken.

Confidentiality and Corporate
Assets

Our directors, officers and
employees are entrusted with our confidential information and with the
confidential information of our business partners. This information may include
(1) technical or scientific information about current and future projects or
endeavors, (2) business or marketing plans or projections, (3) earnings and
other internal financial data, (4) personnel information, (5) lists of current,
past and potential business partners and (6) other non-public information that,
if disclosed, might be of use to our competitors, or harmful to our business
partners. This information is our property, or the property of our business
partners, and in many cases was developed at great expense. Unless authorized by
written approval or required by applicable law, our directors, officers and
employees shall not:

- Discuss confidential information with or in the presence of any
  unauthorized persons, including family members and friends;

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- Use confidential information for illegitimate business purposes or for
  personal gain;
- Disclose confidential information to unauthorized third parties; and
- Use the Company property or resources for any personal benefit or the
  personal benefit of anyone else. The Company property includes, without
  limitation, the Companys internet, email, and voicemail services, which
  should be used only for business related activities, and which may be
  monitored by the Company at any time without notice.

II.We Provide
Full, Fair, Accurate, Timely and Understandable Disclosure

We are committed to providing our
stockholders and investors with full, fair, accurate, timely and understandable
disclosure in the reports that we file with the Securities Commissions in
applicable jurisdictions. To this end, our directors, officers and employees
shall:

- Not make false or misleading entries in our books and records for any
  reason;
- Not condone any undisclosed or unrecorded bank accounts or assets
  established for any purpose;
- Comply with generally accepted accounting principles at all times;
- Notify our Chief Financial Officer if there is an unreported transaction;
- Maintain a system of internal accounting controls that will provide
  reasonable assurances to management that all transactions are properly
  recorded;
- Maintain books and records that accurately and fairly reflect our
  transactions;
- Prohibit the establishment of any undisclosed or unrecorded funds or
  assets;
- Maintain a system of internal controls that will provide reasonable
  assurances to our management that material information about the Company is
  made known to management, particularly during the periods in which our
  periodic reports are being prepared;
- Present information in a clear and orderly manner and avoid the use of
  unnecessary legal and financial language in our periodic reports; and
- Not communicate to the public any nonpublic information except through, or
  as approved by, our Chief Financial Officer or Chief Executive Officer.

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III.We Comply
With all Laws, Rules and Regulations

We will comply with all laws and
governmental regulations that are applicable to our activities, and expect all
our directors, officers and employees to obey the law. Specifically, we are
committed to:

- Maintaining a safe and healthy work environment;
- Promoting a workplace that is free from discrimination or harassment based
  on race, color, religion, sex, age, national origin, disability or other
  factors that are unrelated to the Companys business interests;
- Supporting fair competition and laws prohibiting restraints of trade and
  other unfair trade practices;
- Conducting our activities in full compliance with all applicable
  environmental laws;
- Keeping the political activities of our directors, officers and employees
  separate from our business;
- Prohibiting any illegal payments, gifts, or gratuities to any government
  officials or political party;
- Prohibiting the unauthorized use, reproduction, or distribution of any
  third partys trade secrets, copyrighted information or confidential
  information;
- Complying with all applicable securities laws or any provisions of
  applicable law relating to fraud against stockholders; and
- Not tolerating any behavior that could constitute securities fraud, mail
  fraud, bank fraud, or wire fraud.

Our directors, officers and
employees are prohibited from trading our securities while in possession of
material, nonpublic (inside) information about the Company. Our Corporate
Disclosure and Share Trading Policy describes the nature of inside information
and the related restrictions on trading.

REPORTING AND EFFECT OF VIOLATIONS

Compliance with the Code is,
first and foremost, the individual responsibility of every director, officer and
employee. We attempt to foster a work environment in which ethical issues and
concerns may be raised and discussed with supervisors or with others without the
fear of retribution. It is our responsibility to provide a system of reporting
and access when you wish to report a suspected violation, or to seek counseling,
and the normal chain of command cannot, for whatever reason, be used.

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Administration

Our Board of Directors and Audit
Committee have established the standards of business conduct contained in this
Code and oversee compliance with this Code. They have also charged the Ethics
Officer to ensure adherence to the Code. While serving in this capacity, the
Ethics Officer reports directly to the Board of Directors.

Training on this code will be
included in the orientation of new employees and provided to existing directors,
officers, and employees on an on-going basis. To ensure familiarity with the
Code, directors, officers, and employees will be asked to read the Code and sign
a Compliance Certificate annually.

Reporting Violations and Questions

Directors, officers, and
employees must report, in person or in writing, any known or suspected
violations of laws, governmental regulations or the Code, to either the Ethics
Officer or the Chairman of the Audit Committee of our Board of Directors.
Additionally, directors, officers, and employees may contact the Ethics Officer
or the Chairman of the Audit Committee with a question or concern about the Code
or a business practice. Any questions or violation reports will be addressed
immediately and seriously, and can be made anonymously. If you feel
uncomfortable reporting suspected violations to these individuals, you may
report matters to our outside counsel. The address and telephone number of these
individuals are listed under Reporting Contacts at the end of this Code.

It is not sufficient to report a
suspected violation of the Code to a co-worker or to any person other than one
of the individuals designated above.

Upon receipt of a complaint under
the Code, the Company will investigate the complaint and will involve agencies
and resources outside the Company if and/or when such outside involvement
appears advisable or necessary. The report and investigation will be kept
confidential to the extent consistent with the need for a thorough investigation
and response and taking into consideration the Companys disclosure obligations
and requirements.

Consequences of a Violation

If it is determined that a director,
  officer or employee of the Company has violated the Code, the Company will take
  appropriate action including, but not limited to, disciplinary action, up to
  and including termination of employment. If it is determined that a non-employee
  (including any consultant, contractor, subcontractor, or other agent) has violated
  the Code, the Company will take appropriate corrective action, which could include
  severing the consultant, contractor, subcontractor, or agency relationship.
  In either event, the Company will take necessary corrective action reasonably
  calculated to address and to correct the alleged violation.

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We will not allow any retaliation
  against a director, officer or employee who acts in good faith in reporting
  any violation.

The Company is committed to maintaining
  an environment in which people feel free to report all suspected incidents of
  inaccurate financial reporting or fraud. No retaliatory action will be taken
  against any person who reports any conduct which he or she reasonably believes
  may violate the Code. In addition, no retaliatory action will be taken against
  any individual who in good faith assists or participates in an investigation,
  proceeding, or hearing relating to a complaint about the Companys auditing
  or financial disclosures, or who files, causes to be filed, testifies, otherwise
  assists in such a proceeding against the Company.

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REPORTING CONTACTS

|Reporting Contacts:                                 |  |                                              
|--------------------------------------------------- |  | ---------------------------------------------
|                                                    |  | The Chair of our Audit Committee:            
|Name: Raghu Reddy, Ethics Officer                   |  | Name:
      John R. Brodie                   
|Address: Suite 1040
       4500 Cherry Creek Drive |  | Address: Suite 400, 837 West Hastings Street,
|South, Glendale, CO, 80246                          |  | Vancouver, BC V6C 3N6                        
|                                                    |  |                                              
|Phone:
      300-300-0137                           |  | Phone:
      (604) 862 1517                  
|E-mail:
      rreddy@augustaresource.com            |  | E-mail: jrbcapital@telus.net                 

Additional Reporting Contact:

| | Our Outside US Counsel:             
| | ------------------------------------
| |                                     
| | Kenneth G. Sam , Esq.               
| | Dorsey & Whitney LLP                
| | Brookfield Place, Canada Trust Tower
| | 161 Bay Street, Suite 4310          
| | Toronto, Ontario, Canada M5J 2S1    
| | (416) 367-7373 direct               
| | (416) 367-7371 facsimile            
| | Denver                              
| | Republic Plaza Building, Suite 4700 
| | 370 Seventeenth Street              
| | Denver, CO 80202-5647               
| | (303) 629-3445 direct               
| |                                     
| | E-mail: sam.kenneth@dorsey.com      
| |                                     
| |                                     
| | Our Outside Canadian Counsel:       
| |                                     
| | Josh Lewis                          
| | Fasken Martineau DuMoulin LLP       
| | 2900 - 550 Burrard Street           
| | Vancouver, British Columbia         
| | V6C OA3                             
| | Direct: 604-631-4853                
| | Main: 604-631-3131                  
| | E-mail: jlewis@fasken.com           

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COMPLIANCE CERTIFICATE

I have read and understand the
Code of Business Conduct and Ethics (the Code) of Augusta Resource Corporation
(the Company) and the Disclosure and Share Trading Policy. I will adhere in
all respects to the ethical standards described in the Code. I further confirm
my understanding that any violation of the Code will subject me to appropriate
disciplinary action, which may include demotion or discharge.

I certify to the Company that I
am not in violation of the Code, unless I have noted such violation in a signed
Statement of Exceptions attached to this Compliance Certificate.

|Date: |  |  | Name:           | 
|----- |  |  | --------------- | 
|      |  |  | Title/Position: | 

Check one of the following:

|[ ] | A Statement of Exceptions is attached. 
|--- | ---------------------------------------
|    |                                        
|[ ] | No Statement of Exceptions is
attached.

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