---



ANNUAL INFORMATION FORM(AIF)

of

AUGUSTA RESOURCE CORPORATION(the Company or
Augusta)Suite 400, 837 West Hastings Street Vancouver, British
Columbia V6C 3N6

Telephone: 604-687-1717 Facsimile: 604-687-1715 Website:
www.augustaresource.com E-mail:
info@augustaresource.com



For the Year Ended December 31, 2007

Dated: March 4, 2008

---

TABLE OF CONTENTS

|         |                                                            | Page
|-------- | ---------------------------------------------------------- | ----
|         |                                                            |     
|ITEM 1:  | PRELIMINARY NOTES                                          | 1   
|         | Effective Date of Information                              | 1   
|         | Currency                                                   | 1   
|         | Note Regarding Forward Looking
      Statements            | 1   
|         | National Instrument 43-101 Definitions                     | 2   
|ITEM 2:  | CORPORATE STRUCTURE                                        | 3   
|         | Incorporation or Organization
      of Company             | 3   
|         | Subsidiaries                                               | 4   
|ITEM 3:  | GENERAL DEVELOPMENT OF THE BUSINESS                        | 4   
|         | Three Year History                                         | 4   
|ITEM 4:  | NARRATIVE DESCRIPTION OF THE
      BUSINESS                | 7   
|         | Risk Factors                                               | 8   
|         | Material/Mineral Property                                  | 15  
|ITEM 5:  | DIVIDENDS                                                  | 28  
|ITEM 6:  | DESCRIPTION OF CAPITAL STRUCTURE                           | 28  
|ITEM 7:  | MARKET FOR SECURITIES                                      | 28  
|ITEM 8:  | DIRECTORS AND OFFICERS                                     | 30  
|ITEM 9:  | INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS | 34  
|ITEM 10: | TRANSFER AGENTS AND REGISTRARS                             | 34  
|ITEM 11: | MATERIAL CONTRACTS                                         | 34  
|ITEM 12: | INTEREST OF EXPERTS                                        | 34  
|ITEM 13: | AUDIT COMMITTEE INFORMATION                                | 35  
|ITEM 14  | ADDITIONAL INFORMATION                                     | 37  

-i-

---

|ITEM 1: | PRELIMINARY NOTES
|------- | -----------------

Effective Date of Information

This AIF is dated March 4, 2008, and unless otherwise
indicated, the information contained herein is current as of such date, other
than certain financial information which is current as of December 31, 2007,
being the date of the Companys most recently audited financial year end.

All financial information in this AIF is prepared in accordance
with accounting principles generally accepted in Canada (Canadian GAAP).

Currency

All dollar amounts are expressed in Canadian dollars unless
otherwise indicated.

Note Regarding Forward Looking Statements

Certain of the statements made and information contained herein
and in the documents incorporated by reference may contain forward-looking
statements or information within the meaning of the United States Private
Securities Litigation Reform Act of 1995 and forward looking statements or
information within the meaning of the Securities Act(Ontario).
Forward-looking statements or information include statements regarding the
expectations and beliefs of management. Forward-looking statements or
information include, but are not limited to, statements or information with
respect to known or unknown risks, uncertainties and other factors which may
cause the actual results, performance or achievements of the Company, or
industry results, to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements or information. Forward-looking statements or information are subject
to a variety of risks and uncertainties which could cause actual events or
results to differ from those reflected in the forward-looking statements or
information, including, without limitation, risks and uncertainties relating to
the Companys plans at its Rosemont Property and other mineral properties, the
interpretation of drill results and the estimation of mineral resources and
reserves, the geology, grade and continuity of mineral deposits, the possibility
that future exploration, development or mining results will not be consistent
with the Companys expectations, metal recoveries, accidents, equipment
breakdowns, title matters, labor disputes or other unanticipated difficulties
with or interruptions in production and operations, the potential for delays in
exploration or development activities or the completion of feasibility studies,
the inherent uncertainty of production and cost estimates and the potential for
unexpected costs and expenses, commodity price fluctuations, currency
fluctuations, failure to obtain adequate financing on a timely basis, the effect
of hedging activities, including margin limits and margin calls, regulatory
restrictions, including environmental regulatory restrictions and liability, the
speculative nature of mineral exploration, dilution, competition, loss of key
employees, and other risks and uncertainties. Should one or more of these risks
and uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those described in forward-looking
statements. Accordingly, readers are advised not to place undue reliance on
forward-looking statements or information. We do not expect to update
forward-looking statements or information continually as conditions change, and
you are referred to the full discussion of the Companys business contained in
the Companys reports filed with the securities regulatory authorities in Canada
and the US. Readers are also advised to consider such forward-looking
statements, which speak only as of the date the statements were made, while
considering the risks set forth below under the section Risks and
uncertainties.

---

- 2 -

National Instrument 43-101 Definitions

Canadian reporting requirements for disclosure of mineral
properties are governed by National Instrument 43-101 (NI 43-101). The
definitions given in NI 43-101 are adopted from those given by the Canadian
Institute of Mining Metallurgy and Petroleum.

|Mineral Reserve            | The term mineral reserve refers to the economically
      mineable part of a measured or indicated mineral resource demonstrated by
      at least a preliminary feasibility study. The study must include adequate
      information on mining, processing, metallurgical, economic, and other
      relevant factors that demonstrate, at the time of reporting, that economic
      extraction can be justified. A mineral reserve includes diluting materials
      and allowances for losses that might occur when the material is mined.                                                                                                                                                                                                                        
|-------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Mineral Resource           | The term mineral resource refers to a concentration or
      occurrence of diamonds, natural, solid, inorganic or fossilized organic
      material including base and precious metals, coal and industrial minerals
      in or on the Earths crust in such form and quantity and of such a grade
      or quality that it has reasonable prospects for economic extraction. The
      location, quantity, grade, geological characteristics and continuity of a
      mineral resource are known, estimated or interpreted from specific
      geological evidence and knowledge.                                                                                                                                                                                  
|                           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Measured Mineral Resource  | The term measured mineral resource refers to that part
      of a mineral resource for which quantity, grade or quality, densities,
      shape and physical characteristics are so well established that they can
      be estimated with confidence sufficient to allow the appropriate
      application of technical and economic parameters, to support production
      planning and evaluation of the economic viability of the deposit. The
      estimate is based on detailed and reliable exploration, sampling and
      testing information gathered through appropriate techniques from locations
      such as outcrops, trenches, pits, workings and drill holes that are spaced
      closely enough to confirm both geological and grade continuity.
|                           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Indicated Mineral Resource | The term indicated mineral resource refers to that part
      of a mineral resource for which quantity, grade or quality, densities,
      shape and physical characteristics can be estimated with a level of
      confidence sufficient to allow the appropriate application of technical
      and economic parameters, to support mine planning and evaluation of the
      economic viability of the deposit. The estimate is based on detailed and
      reliable exploration and testing information gathered through appropriate
      techniques from locations such as outcrops, trenches, pits, workings and
      drill holes that are spaced closely enough for geological and grade
      continuity to be reasonably assumed.                         

---

- 3 -

|Inferred Mineral Resource | The term inferred mineral resource refers to that part
      of a mineral resource for which quantity and grade or quality can be
      estimated on the basis of geological evidence and limited sampling and
      reasonably assumed, but not verified, geological and grade continuity. The
      estimate is based on limited information and sampling gathered through
      appropriate techniques from locations such as outcrops, trenches, pits,
      workings and drill holes.
|------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Qualified Person          | The term qualified person refers to an individual who
      is an engineer or geoscientist with at least five years of experience in
      mineral exploration, mine development, production activities and project
      assessment, or any combination thereof, including experience relevant to
      the subject matter of the project or report and is a member in good
      standing of a self-regulating organization.                                                            

|ITEM 2: | CORPORATE STRUCTURE
|------- | -------------------

Incorporation or Organization of Company

The Company was incorporated on January 14, 1937 by Articles of
Incorporation Letters Patent pursuant to the Ontario Business Corporations
Actunder the name Hol-Lac Gold Mines, Limited. In 1985, after a period of
dormancy, the Company began actively pursuing interests in mining properties. On
July 3, 1997, the Company changed its name to Augusta Resource Corporation and
on June 28, 1999 the Company was continued under section 187 of the Canada
Business Corporations Act.

The Companys registered office is at Suite 2900  Five Bentall
Centre, 550 Burrard Street, Vancouver, BC, V6C 0A3. The Companys head office is
located at Suite 400  837 West Hastings Street, Vancouver, BC, V6C 3N6. The
Company also has an executive office located at Suite 1040, 4500 Cherry Creek
Drive South, Glendale, Colorado, 80246.

The Company is a reporting issuer under the Securities Act(British Columbia), Securities Act(Alberta), Securities Act
(Manitoba) and Securities Act(Ontario), and, as such, is required to
make filings on a continuous basis thereunder. Such material is available for
inspection through the British Columbia Securities Commission, the Alberta
Securities Commission, Manitoba Securities Commission and the Ontario Securities
Commission, and on the SEDAR website at www.sedar.com.

In April of 2003, the Company consolidated its issued and
outstanding shares on a three for one basis with no name change. The
consolidation was undertaken to assist in accessing financing.

The Companys fiscal year end is December 31 and its common
shares trade in Canada on the Toronto Stock Exchange (TSX) and in the United
States (US) on the American Stock Exchange (AMEX) both under the symbol
AZC. The listing on these two senior stock exchanges was undertaken as part of
the Companys strategy to provide greater visibility and liquidity to the
Companys stock in North America. In addition, the Company commenced trading of
its common shares on the Frankfurt Stock Exchange (FWB) on September 14, 2006,
under the symbol A5R. The TSX listing commenced August 10, 2006 as the Company
graduated from the TSX Venture Exchange. The AMEX listing commenced November 30,
2006.

The Company has an unlimited number of common shares without
par value authorized. At February 29, 2008, there were 88,590,061 shares issued
and outstanding.

---

- 4 -

Subsidiaries

The Companys only material subsidiary is Rosemont Copper
Company (previously known as Augusta Resource (Arizona) Corporation and renamed
in July 2007) that was incorporated under Arizona law on April 8, 2005, of which
the Company holds all of its outstanding shares.

|ITEM 3: | GENERAL DEVELOPMENT OF THE BUSINESS
|------- | -----------------------------------

Three-Year History

Properties in White Pine County,
Nevada

In December of 2004, the Company announced it had entered into
a purchase agreement to acquire the Mount Hamilton gold project, located in
White Pine County, Nevada. On April 20, 2005, the Company executed a share
purchase agreement with Diamond Hill Investment Corp. to acquire 100% interest
in the Mount Hamilton project by purchasing 100% of the shares of DHI Minerals
Ltd., which owned 100% of DHI Minerals (U.S.) Ltd., the holder of the Mount
Hamilton property. The terms of the acquisition were US$3.6 million payable with
US$3,000,000 in cash payable over a two year period and 3,750,000 units. The
units had a deemed value of US$0.16. Each unit consisted of one share and one
warrant. Each warrant entitles the holder to purchase one common share at
US$0.16 for a period of two years expiring on May 6, 2007 (prior to the expiry
date all warrants had been exercised).

The Company also assumed an underlying Net Smelter Royalties
(NSR) and advance royalty payments. Prior to commencement of commercial
production the Company will pay minimum advance royalty payments of US$100,000
per annum commencing November 19, 2005 and continuing until November 19, 2010,
when the annual payment amount increases to US$300,000. Upon commencement of
commercial production, the Company will pay a base rate of 3% NSR, subject to
increase whenever the price of gold is greater than US$400 per ounce.

In January, 2005, the Company announced it had entered into an
option agreement to acquire the Shell Deposit, a molybdenum-gold property in
White Pine County, Nevada, located approximately 1,000 meters from the Mount
Hamilton property. The Company is acquiring a 100% working interest, subject to
an underlying NSR ranging from 0.5% - 4.5% for a cash payment of US$120,000, and
annual advance royalty payments commencing at US$80,000 on the first anniversary
increasing by US$20,000 per year until production commences.

In January, 2007, the Company entered into an option agreement
to acquire the Monte Cristo property in White Pine County, Nevada, adjacent to
the Mount Hamilton and Shell properties. The agreement requires an annual
payment of US$25,000 so long as the option is unexercised to acquire property
for US$240,000 (with any annual payments credited against the purchase price)
plus the granting of a 1.5% NSR which royalty is subject to a buyout for
US$450,000 at any time prior to February 1, 2013.

Throughout 2005, 2006 and early 2007 the Company continued
activities on its Mount Hamilton, Shell and Monte Cristo properties in Nevada.
The Company commenced a pre-feasibility study at Mount Hamilton to evaluate
development of the Centennial gold deposit as well as a 3,000-meter phase I
exploratory drilling program on the Shell molybdenum/tungsten deposit.

In the second quarter of 2007, as the Companys efforts became
focused on advancing the Rosemont project (see below), the Company, on May 1,
2007, entered into a Letter of Intent (LOI) with Ivana Ventures Inc. (Ivana)
respecting the sale of the Companys interest in the Mount Hamilton, Shell and
Monte Cristo properties. The definitive agreement was completed in November 2007
with regulatory approval and final closing of the agreement occurring in late
February 2008.

---

- 5 -

The consideration for the sale is US$6,625,000 in cash, and
warrants exercisable to purchase up to 3,000,000 shares of Ivana for eighteen
months after closing at the price of $0.50 per share. The cash portion of the
purchase price will be payable in instalments over five years, with US$1,625,000
payable on closing and an additional US$1,000,000 payable each 12 months
thereafter. The shares of the subsidiaries will be pledged to the Company as its
sole recourse for non-payment of any portion of the purchase price. As the fair
value of the compensation noted above is less than the net book value of the
assets being sold, at the 2007 year end, the Company recorded a net asset
impairment totalling $1.2 million.

Lone Mountain property, New Mexico

In March 2005, the Company entered into an option agreement to
acquire the Lone Mountain, copper-zinc-silver property in New Mexico. The
Company acquired a 100% working interest, subject to an underlying NSR ranging
from 2.0% - 3.0%, and minimum exploration commitments over a three-year period.
On May 15, 2006 the Company announced that after a detailed geological
assessment that it would not be pursuing its option to purchase the Lone
Mountain project. Capitalized costs totalling $320,183 were written-off in the
second quarter of 2006.

Rosemont Copper property, Pima County,
Arizona

Under an option agreement dated April 18, 2005 the Company
secured the right to purchase a 100% working interest in the Rosemont property,
subject to a 3% NSR, for an aggregate cash payment of US$20,800,000 payable over
a three-year period. On June 1, 2005, the Company made the first option payment
of US$6,666,666. On March 31, 2006, the Company utilized $16,114,985 of the
proceeds of the Special Warrant Offering, described below, to pay the remaining
payments of US$13,733,582 owing under the option agreement, after adjusting for
early payment provisions, for total aggregate payments of US$20,400,248, and
thereby acquired a 100% ownership interest in the Rosemont property.

During 2005, the Company raised approximately $17 million in
gross proceeds through private placements and a convertible debenture to
complete the initial cash payments and work expenditures for the Rosemont, Mount
Hamilton, Lone Mountain and Shell projects.

As the Company was advancing its projects through the
development process additional mining management expertise was required and the
Company hired a new President & Chief Executive Officer, VP Exploration and
VP Projects and Environment. These positions are all based in Colorado. Gil
Clausen, the President & Chief Executive Officer and Mike Clarke, VP
Exploration commenced their engagements in April 2005. In September 2005, James
Sturgess was hired as VP Projects and Environment.

On March 17, 2006, the Company announced the closing of an
offering of 23,210,000 special warrants (the Special Warrants) of the Company
at a price of $1.90 per Special Warrant for aggregate gross proceeds to the
Company of $44,099,000 (the Special Warrant Offering). Each Special Warrant
entitles the holder thereof to acquire, without the payment of additional
consideration and subject to adjustment, one share and one-half of one share
purchase warrant (a Warrant). Each whole Warrant will entitle the holder
thereof to purchase one common share of the Company at a price of $4.10 per
share until March 17, 2008. On April 27, 2006, the Company received receipt from
applicable Canadian Securities Commissions for its Final Short Form Prospectus
dated April 25, 2006, qualifying the distribution of the 23,210,000 common
shares, 11,605,000 common share purchase warrants and 1,392,600 non-transferable
agents share purchase warrants in connection with the Special Warrant
Offering.

In consideration for the services performed by the sales agents
in connection with the Special Warrant Offering, the Company paid the agents a
cash commission equal to 6% of the gross proceeds amounting to $2,645,940. In
addition, the agents were issued non-transferable agents Special Warrants equal
in number to 6% (1,392,000), of the number of Special Warrants. Each agents
warrant will entitle the holder thereof to purchase a common share of the
Company at a price of $4.10 per share until March 17, 2008.

---

- 6 -

The net proceeds of the Special Warrant Offering were used to
finance the purchase of 100% of the Rosemont property located in Pima County,
Arizona, to complete a NI 43-101 compliant feasibility study on the Rosemont
property, to advance permitting at the Rosemont deposit and for general working
capital purposes including the acquisition costs and work expenditures related
to the Companys Mount Hamilton, Shell, Monte Cristo and Lone Mountain
properties.

In August 2006, the Company commenced a feasibility study on
the Rosemont property. M3 Engineering and Technology Corporation of Tucson,
Arizona was awarded the contract for the feasibility study after a due bid and
selection process. To lead the project internally, the Company appointed Mr.
Lance Newman as VP Project Development and Mr. Mark Stevens as Chief Project
Geologist. Both Mr. Newman and Mr. Stevens are seasoned members of the team with
proven track records in project development and operations.

With the increase in Company activities in 2006, Augusta also
hired a number of individuals for the corporate office in Vancouver. This
included a new Chief Financial Officer (Mr. Bruce Nicol) and Controller (Ms
Tracey Brix-Nielsen) as well as an Investor Relations Manager (Marlo
Hamer-Jackson). The individuals added to the team have many years of
professional experience in the international mining industry.

In April 2007 the Company delivered the 2007 Mineral Resource
Update for the Rosemont Project.The updated resource estimate reports
5.7 billion pounds (lbs) of copper (Cu) and 157 million lbs of molybdenum
(Mo) in measured and indicated resources, and 1.5 billion lbs of Cu and 23
million lbs of Mo in inferred resources. The estimate also includes a new silver
(Ag) resource for the deposit, which quantifies approximately 66.5 million
ounces (oz) of Ag in measured and indicated resources and 9.3 million oz of Ag
in inferred resources. The results of this NI 43-101 compliant report were
incorporated in the Rosemont Copper Project Feasibility Study (the Feasibility
Study).

In June 2007 the Company completed a private placement of
10,719,827 common shares at $3.50 per share for total proceeds of $37,519,394.
The Placement was subscribed for by Sumitomo Corporation and Sumitomo
Corporation of America (Sumitomo) as to 7,600,000 common shares and two funds
managed by US private investment firm Harbinger Capital Partners (Harbinger)
as to 3,119,827 common shares resulting in Sumitomo holding 8.7% interest in
Augusta and Harbinger holding 19.9% (from 18.6%) in Augusta. Proceeds from the
Placement will be used towards the advancement of the Rosemont Property and for
general working capital purposes.

In July 2007 the Company formally filed the Mine Plan of
Operations (MPO) with the United States Forest Service. (US Forest Service)
The detailed plan for Augustas Rosemont Copper project includes progressive
design, conservation and sustainability initiatives. Once approved, the final
Rosemont MPO becomes a binding document that assures the plans commitments,
including reclamation and closure funding guarantees.

On August 28, 2007, the Company announced that the Board of
Directors had accepted the results of the Feasibility Study for the Rosemont
property as a low cost open pit mine and approved the development of the
project. During the remainder of 2007 and into 2008 the Company advanced certain
aspects of the project including the ordering of long lead time equipment
including a SAG mill and two ball mills.

Project financing also progressed and on December 20, 2007 the
Company announced the signing of a binding letter of intent and term sheet with
Silver Wheaton Corp. to sell between 45% - 90% of the silver to be produced by
the Rosemont project.

Following the development decision by the Board of Directors
the Company hired additional key employees. In November 2007, Raghunath Reddy
was hired as VP Finance based in Denver and in January

---

- 7 -

2008 Rod Pace was hired as VP Operations to be based in Tucson.
Both individuals have extensive mining experience and will be an integral part
of the development team overseeing the advancement of the project.

In 2007, the Company raised $31,150 from the exercise of stock
options and $4,549,140 from the exercise of warrants.

For a more detailed discussion of the Rosemont Copper project
and the anticipated business activities in 2008 refer to the Material Mineral
Project section, under Item 4.

|ITEM 4: | NARRATIVE DESCRIPTION OF THE BUSINESS
|------- | -------------------------------------

The Company is engaged in the acquisition, exploration and, if
warranted, development of natural mineral resource properties. The Company does
not produce, develop or sell any products at this time. The properties that the
Company has interest in are in the exploratory or development stage and are thus
non-producing and consequently do not generate any operating income or cash
flows from operations. Currently, the Companys only material property is the
Rosemont Copper property located in Pima County, Arizona.

The Company depends on equity capital to finance its
activities.

Specialized Skill and Knowledge

Various aspects of the Companys business require specialized
skills and knowledge. Such skills and knowledge include the areas of mine
construction, permitting, geology, drilling, metallurgy, logistical planning and
implementation of exploration programs as well as finance and accounting. While
recent increased activity in the resource mining industry has made it more
difficult to locate competent employees and consultants in such fields,
particularly skilled and experienced contract drilling personnel, the Company
has found that it can locate and retain such employees and consultants and
believes it will continue to be able to do so. It is possible, however, that
delays or increased costs may be experienced in order to proceed with its
planned business activities during the current period.

Competitive Conditions

Competition in the mineral exploration industry is intense. The
Company competes with other mining companies, many of which have greater
financial resources and technical facilities for the acquisition and development
of, and production from, mineral concessions, claims, leases and other
interests, as well as for the recruitment and retention of qualified employees
and consultants.

Business Cycles

The mining business is subject to mineral price cycles. The
marketability of minerals and mineral concentrates is also affected by worldwide
economic cycles.

Economic Dependence

The Companys business is not substantially dependent on any
contract such as a contract to sell the major part of its products or services
or to purchase the major part of its requirements for goods, services or raw
materials. The Company has entered into an agreement with Silver Wheaton Corp.
which provides for a significant cash payment for delivery of silver as
produced. This payment is conditional upon the receipt of all required permits
as well as the finalization of all additional project financing.

Environmental

The Companys material property is up to date and compliant
with its environmental obligations and as such there are no material
environmental liabilities. However, as the Rosemont property reaches a stage of

---

- 8 -

commercial viability, the Company will be required to comply
with federal, state and local regulations prior to entering commercial
production.

Employees

As at December 31, 2007, the Company had nine employees in the
Vancouver, British Columbia office and seven employees in the Glendale, Colorado
office. As operations require, the Company also retains geologists, engineers,
geophysicists and other consultants on a fee for service basis. The nine
Vancouver office employees also have responsibilities with other publicly traded
companies. The Company only pays a pro-rata portion of the costs of these
employees. Upon finalization of the permitting process, assuming this is
successful, the Company will embark on a significant hiring program to ensure
staff are fully trained in time for commercial production.

Risk Factors

An investment in the Company's common shares is highly
speculative and subject to a number of risks. Only those persons who can bear
the risk of the entire loss of their investment should participate. An investor
should carefully consider the risks described below and the other information
filed with the Canadian securities regulators before investing in the Company's
common shares. The risks described below are not the only ones faced. Additional
risks that the Company currently believes are immaterial may indeed become
important factors that affect the Company's business. If any of the following
risks occur, or if others occur, the Company's business, operating results and
financial condition could be seriously harmed and investors may lose all of
their investment.

In addition to those risk factors discussed elsewhere in this
AIF, the Company is subject to the following risk factors:

We have a history of losses and anticipate that we will
continue to incur losses for the foreseeable future.

We have historically incurred losses as evidenced by the
consolidated statements of operations contained in the Audited Annual Financial
Statements. We incurred losses of $7,979,836, $6,659,591 and $5,337,837 for the
years ended December 31, 2007, 2006 and 2005, respectively and have accumulated
losses of $30,272,946.

Our efforts to date are focused on acquiring, exploring and
advancing mineral properties to a development decision. We do not anticipate
that we will earn any revenue from our operations until our properties are
placed into production, which is not expected to be for several years, if at
all.

We will require additional capital to fund our business
plans.

As of December 31, 2007, we had working capital of $28,903,147.
We have no revenues from operations and do not expect to generate any revenues
from operations in the foreseeable future. Although we anticipate the current
cash balance will provide us with sufficient funding to advance the project into
the second quarter of 2008, our planned activities for the year anticipate
expenditures significantly in excess of our current cash reserves. We will
require additional capital to fund our business activities, including
exploration and development expenditures, land purchases and deposits on long
lead time mining equipment. Managements current plan, will require a minimum of
approximately $17 million additional funding in 2008. We may raise additional
capital through debt or equity financing, and possibly through joint ventures,
production sharing arrangements or other means. Such funding may not be
available on commercially acceptable terms or at all. Our failure to meet our
ongoing obligations on a timely basis or raise additional funds that may be
required could result in delay or indefinite postponement of further

---

- 9 -

exploration and development of our property or the loss or
substantial dilution of our property interests (as existing or as proposed to be
acquired).

We have historically depended on distributions of our
securities to fund our working capital and funding requirements.

Historically, the principal source of funds available to us has
been through the sale of common shares. During the years ended December 31,
2007, 2006 and 2005, we raised approximately $42,100,000, $47,724,000 and
$11,220,000, respectively, by issuing equity securities. Additional equity
financing would cause dilution to our existing shareholders.

In addition, as at December 31, 2007, we had outstanding
5,887,000 common share purchase options at an average exercise price of $1.89
and 12,997,600 purchase warrants at an average outstanding exercise price of
$4.10. As a consequence of the passage of time since the date of their original
sale and issuance, none of the Company's shares remain subject to any hold
period restrictions in Canada as of December 31, 2007. The unrestricted resale
of outstanding shares from the exercise of dilutive securities may have a
depressing effect on the market for our common shares.

We have no history of production and may never place any
of our properties into production.

None of our properties are in commercial production, and we
have never recorded any revenues from mining operations. We expect to incur
losses unless and until such time as our properties enter into commercial
production and generate sufficient revenues to fund our continuing operations.
The development of mining operations on any of our properties will require the
commitment of substantial resources for operating expenses and capital
expenditures, which may increase in subsequent years as needed consultants,
personnel and equipment associated with advancing exploration, development and
commercial production of our properties are added. The amounts and timing of
expenditures will depend on the progress of ongoing exploration and development,
the results of consultants analysis and recommendations, the rate at which
operating losses are incurred, the execution of any joint venture agreements
with strategic partners, our acquisition of additional properties, and other
factors, many of which are beyond our control. We may not generate any revenues
or achieve profitability.

Our exploration activities may not be commercially
successful.

Mineral exploration is highly speculative in nature, involves
many risks and is frequently nonproductive. Unusual or unexpected geologic
formations, and the inability to obtain suitable or adequate machinery,
equipment or labor are risks involved in the conduct of exploration programs. We
are currently conducting exploration and deposit definition drilling on the
Rosemont property. The success of mineral exploration is determined in part by
the following factors:

- the identification of potential mineralization based on superficial
  analysis;
- availability of exploration permits;
- the quality of our management and our geological and technical expertise;
  and
- the capital available for exploration.

Substantial expenditures are required to establish or to add to
existing proven and probable reserves through drilling and analysis, to develop
metallurgical processes to extract metal, and to develop the mining and
processing facilities and infrastructure at any site chosen for mining. Whether
a mineral deposit will be commercially viable depends on a number of factors,
which include, without limitation, the particular attributes of the deposit,
such as size, grade and proximity to infrastructure; metal prices, which
fluctuate

---

- 10 -

widely; and government regulations, including, without
limitation, regulations relating to prices, taxes, royalties, land tenure, land
use, importing and exporting of minerals and environmental protection.

Exploration, development and mining involve a high degree
of risk.

Our operations will be subject to all the hazards and risks
normally encountered in the exploration, development and production of copper
and other base or precious metals, including, without limitation, seismic
activity, rock bursts, pit-wall failures, cave-ins, flooding and other
conditions involved in the drilling and removal of material, any of which could
result in damage to, or destruction of, mines and other producing facilities,
damage to life or property, environmental damage and legal liability. Milling
operations, if any, are subject to various hazards, including, without
limitation, equipment failure and failure of retaining dams around tailings
disposal areas, which may result in environmental pollution and legal
liability.

The parameters used in estimating mining and processing
efficiency are based on testing and experience with previous operations. While
the parameters used have a reasonable basis, various unforeseen conditions can
occur that may materially affect the estimates. In particular, past operations
indicate that care must be taken to ensure that proper ore grade control is
employed and that proper steps are taken to ensure that the leaching operations
are executed as planned. The mining contracts for the mines include clauses
addressing these issues to help ensure planned requirements are met.
Nevertheless, unforeseen difficulties may occur in planned operations.

We may be adversely affected by fluctuations in copper,
molybdenum, silver, gold and other metal prices.

The value and price of our common shares, our financial
results, and our exploration, development and mining, if any, activities may be
significantly adversely affected by declines in the price of copper, molybdenum,
silver, gold and other metals. Mineral prices fluctuate widely and are affected
by numerous factors beyond our control such as interest rates, exchange rates,
inflation or deflation, fluctuation in the value of the US dollar and foreign
currencies, global and regional supply and demand, and the political and
economic conditions of mineral producing countries throughout the world. The
price for metals fluctuate in response to many factors beyond anyones ability
to predict. The prices used in making the resource estimates are disclosed and
differ from daily prices quoted in the news media. The percentage change in the
price of a metal cannot be directly related to the estimated resource
quantities, which are affected by a number of additional factors. For example, a
10 percent change in price may have little impact on the estimated resource
quantities and affect only the resultant cash flow, or it may result in a
significant change in the amount of resources. Because mining occurs over a
number of years, it may be prudent to continue mining for some periods during
which cash flows are temporarily negative for a variety of reasons including a
belief that the low price is temporary and/or the greater expense incurred in
closing a property permanently.

Mineralized material calculations and life-of-mine plans using
significantly lower metal prices could result in material write-downs of our
investments in mining properties and increased amortization, reclamation and
closure charges.

In addition to adversely affecting our mineralized material
estimates and financial condition, declining metal prices can impact operations
by requiring a reassessment of the commercial feasibility of a particular
project. Such a reassessment may be the result of a management decision related
to a particular project. Even if the project is ultimately determined to be
economically viable, the need to conduct such a reassessment may cause
substantial delays in development or may interrupt operations, if any, until the
reassessment can be completed.

---

- 11 -

Production and cost estimates may be worse than
anticipated

The decision by the Company to proceed with the development of
the Rosemont mine was based on economic projections determined as part of the
Feasibility Study process. Included in these projections were estimates for
metal production and capital and operating costs. No assurance can be given that
such estimates will be achieved. Failure to achieve these production and capital
and operating cost estimates or material increases in costs could have an
adverse impact on Augustas future cash flows, profitability, results of
operations and financial condition.

Augustas actual production and capital and operating costs may
vary from estimates for a variety of reasons, including: actual ore mined
varying from estimates of grade, tonnage, dilution and metallurgical and other
characteristics; short-term operating factors relating to the ore reserves, such
as the need for sequential development of ore bodies and the processing of new
or different ore grades; revisions to mine plans; risks and hazards associated
with mining; natural phenomena, such as inclement weather conditions, water
availability, floods, and earthquakes; and unexpected labour shortages or
strikes. Costs of production may also be affected by a variety of factors,
including; changing waste-to-ore ratios, ore grade metallurgy, labour costs, the
cost of commodities, general inflationary pressures and currency rates.

Litigation may adversely affect the Companys
assets

Augusta is currently subject to litigation and may be involved
in disputes with other parties in the future which may result in litigation. The
current litigation involves a suit filed by ASARCO LLC in the US Bankruptcy
Court for the Southern District of Texas, Corpus Christi Division with regard to
the Rosemont property. Augusta believes that it has solid grounds to defeat any
ASARCO LLC challenge to its ownership, and it is defending the matter
vigorously. The results of litigation cannot be predicted with certainty. If
Augusta is unable to resolve these disputes favorably, it may have a material
adverse impact on Augustas financial performance, cash flow and results of
operations.

Title to our properties may be subject to other
claims.

Although we believe we have exercised the commercially
reasonable due diligence with respect to determining title to properties we own,
control or have the right to acquire by option, there is no guarantee that title
to such properties will not be challenged or impugned. Our mineral property
interests may be subject to prior unrecorded agreements or transfers or native
land claims and title may be affected by undetected defects. There may be valid
challenges to the title of our properties which, if successful, could impair
development and/or operations. This may be exacerbated due to the large number
of title transfers historically involved with some of the properties.

Estimates of mineralized materials are subject to
geologic uncertainty and inherent sample variability.

Although the estimated resources at our properties have been
delineated with appropriately spaced drilling, there is inherent variability
between duplicate samples taken adjacent to each other and between sampling
points that cannot be reasonably eliminated. There also may be unknown geologic
details that have not been identified or correctly appreciated at the current
level of delineation. This results in uncertainties that cannot be reasonably
eliminated from the estimation process. Some of the resulting variances can have
a positive effect and others can have a negative effect on mining and processing
operations. Acceptance of these uncertainties is part of any mining
operation.

Mineral resources and proven and probable reserves are
estimates.

Although the mineralized material and proven and probable
reserve figures included in this document have been carefully prepared by
independent engineers, these amounts are estimates only, and we cannot be

---

- 12 -

certain that specific quantities of copper, molybdenum, silver,
gold or other mineral will in fact be realized. Any material change in the
quantity of mineralization, grade or stripping ratio, or mineral prices may
affect the economic viability of our properties. In addition, we cannot be
certain that metal recoveries in small-scale laboratory tests will be duplicated
in larger scale tests under on-site conditions or during production. Until an
unmined deposit is actually mined and processed the quantity of mineral
resources and reserves and grades must be considered as estimates only.

Government regulation may adversely affect our business
and planned operations.

We believe our exploration projects currently comply with
existing environmental and mining laws and regulations affecting its operations.
Our mining, processing, development and mineral exploration activities, if any,
are subject to various laws governing prospecting, mining, development,
production, taxes, labor standards and occupational health, mine safety, toxic
substances, land use, water use, land claims of local people and other matters.
We cannot assure you that new rules and regulations will not be enacted or that
existing rules and regulations will not be applied in a manner which could limit
or curtail production or development.

A portion of the present Rosemont land position is located on
unpatented mine and millsite claims located on U.S. federal public lands. The
right to use such claims are granted under the General Mining Law of 1872.
Unpatented mining claims are unique property interests in the United States, and
are generally considered to be subject to greater title risk than other real
property interests because the validity of unpatented mining claims is often
uncertain. This uncertainty arises, in part, out of the complex federal and
state laws and regulations under the General Mining Law and the interaction of
the General Mining Law and other federal and state laws, such as those enacted
for the protection of the environment. Unpatented mining claims are subject to
possible challenges of third parties or contests by the federal government. The
validity of an unpatented mining claim, in terms of both its location and
maintenance, is dependent on strict compliance with a complex body of federal
and state statutory or decisional law. In addition, there are few public records
that definitively control the issues of validity and ownership of unpatentable
mining claims. In recent years, the U.S. Congress has considered a number of
proposed amendments to the General Mining Law. If adopted, such legislation
could, among other things:

- impose a royalty on the production of metals or minerals from unpatented
  mining claims;
- reduce or prohibit the ability of a mining company to expand its
  operations; and
- require a material change in the method of exploiting the reserves located
  on unpatented mining claims.

All of the foregoing could adversely affect the economic and
financial viability of mining operations at the Rosemont property.

Amendments to current laws, regulations and permits governing
operations and activities of mining and exploration companies, or more stringent
implementation thereof, could have a material adverse impact on our business and
cause increases in exploration expenses, capital expenditures or production
costs or reduction in levels of production at producing properties or require
abandonment or delays in development of new mining properties.

Our operations are subject to environmental
risks.

All phases of our operations, if any, will be subject to
federal, state and local environmental regulation in the various jurisdictions
in which we operate. These regulations mandate, among other things, the
maintenance of air and water quality standards and land reclamation. They also
set forth limitations on the generation, transportation, storage and disposal of
solid and hazardous waste. Environmental legislation is evolving in a

---

- 13 -

manner which will require stricter standards and enforcement,
increased fines and penalties for non-compliance, more stringent environmental
assessments of proposed projects and a heightened degree of responsibility for
companies and their officers, directors and employees. We cannot be certain that
future changes in environmental regulation, if any, will not adversely affect
our operations, if any. Environmental hazards may exist on the properties on
which we hold and will hold interests which are unknown to us at present and
which have been caused by previous or existing owners or operators of the
properties.

Failure to comply with applicable laws, regulations and
permitting requirements may result in enforcement actions thereunder, including
orders issued by regulatory or judicial authorities causing operations to cease
or be curtailed, and may include corrective measures requiring capital
expenditures, installation of additional equipment, or remedial actions. Parties
engaged in mining operations or in the exploration or development of mineral
properties may be required to compensate those suffering loss or damage by
reason of the mining activities and may have civil or criminal fines or
penalties imposed for violations of applicable laws or regulations.

Production, if any, at our mines will involve the use of
hazardous materials. Should these materials leak or otherwise be discharged from
their containment systems then we may become subject to liability for hazards
that it may not be insured against or for clean up work that may not be insured.

Our stock price is subject to volatility.

During the year ended December 31, 2007, our share price ranged
from $1.86 to $4.39 per share on the TSX and from US$1.65 to US$4.64 on AMEX.
The market price of a publicly traded stock, especially a junior resource
issuer, is affected by many variables not directly related to our exploration
success, including the market for junior resource stocks, the strength of the
economy generally, commodity prices, the availability and attractiveness of
alternative investments, and the breadth of the public market for the stock. The
effect of these and other factors on the market price of the common shares on
the stock exchanges on which the Company trades, suggest the Company's shares
will continue to be volatile.

We do not insure against all risks.

Our insurance will not cover all the potential risks associated
with a mining companys operations. We may also be unable to maintain insurance
to cover these risks at economically feasible premiums. Insurance coverage may
not continue to be available or may not be adequate to cover any resulting
liability. Moreover, insurance against risks such as environmental pollution or
other hazards as a result of exploration and production is not generally
available to us or to other companies in the mining industry on acceptable
terms. We might also become subject to liability for pollution or other hazards
which may not be insured against or which we may elect not to insure against
because of premium costs or other reasons. Losses from these events may cause us
to incur significant costs that could have a material adverse effect upon our
financial condition and results of operations.

We compete with larger, better capitalized competitors in
the mining industry.

The mining industry is competitive in all of its phases. We
face strong competition from other mining companies in connection with the
acquisition of properties producing, or capable of producing, base and precious
metals. Many of these companies have greater financial resources, operational
experience and technical capabilities than us. As a result of this competition,
we may be unable to maintain or acquire attractive mining properties on terms it
considers acceptable or at all. Consequently, our revenues, operations and
financial condition could be materially adversely affected.

---

- 14 -

We are dependent on our key personnel.

Our success depends on our key executives. The loss of the
services of one or more of such key management personnel could have a material
adverse effect on the Company. Our ability to manage exploration and development
activities, and hence our success, will depend in large part on the efforts of
these individuals. We face intense competition for qualified personnel, and we
cannot be certain that we will be able to attract and retain such personnel.

Our officers and directors may have potential conflicts
of interest.

Our directors and officers may serve as directors and/or
officers of other public and private companies and devote a portion of their
time to manage other business interests. This may result in certain conflicts of
interest. To the extent that such other companies may participate in ventures in
which we are also participating, such directors and officers may have a conflict
of interest in negotiating and reaching an agreement with respect to the extent
of each companys participation. The laws of Canada require the directors and
officers to act honestly, in good faith, and in the best interests of the
Company and its shareholders. However, in conflict of interest situations, our
directors and officers may owe the same duty to another company and will need to
balance the competing obligations and liabilities of their actions. There is no
assurance that our needs will receive priority in all cases. From time to time,
several companies may participate together in the acquisition, exploration and
development of natural resource properties, thereby allowing these companies to:
(i) participate in larger programs; (ii) acquire an interest in a greater number
of programs; and (iii) reduce their financial exposure with respect to any one
program. A particular company may assign, at its cost, all or a portion of its
interests in a particular program to another affiliated company due to the
financial position of the company making the assignment. In determining whether
or not we will participate in a particular program and the interest therein to
be acquired by it, it is expected that our directors will primarily consider the
degree of risk to which the Company may be exposed and its financial position at
the time.

We provide indemnity and protection to our directors and
officers.

Section 7 of our By-Law No.1 states in part that:

The Company shall indemnify a director
or officer, a former director or officer, or a person who acts or acted at the
Companys request as a director or officer of a body corporate of which the
Company is or was a shareholder or creditor... against all costs, charges and
expenses, including an amount paid to settle an action or satisfy a judgment . .
..

Thus, we may be required to pay amounts to settle any such
claims that may arise. The impact of any such possible future indemnity
protection cannot be determined at this time.

In the event that your investment in our shares is for
the purpose of deriving dividend income or in expectation of an increase in
market price of our shares from the declaration and payment of dividends, your
investment will be compromised because we do not intend to pay
dividends.

We have never paid a dividend to our shareholders, and we
intend to retain our cash for the continued development of our business. We do
not intend to pay cash dividends on our common stock in the foreseeable future.
As a result, your return on investment will be solely determined by your ability
to sell your shares in a secondary market.

Increased Costs and Compliance Risks as a Result of Being
a Public Company

Legal, accounting and other expenses associated with public
company reporting requirements have increased significantly in the past few
years. The Company anticipates that general and administrative costs associated

---

- 15 -

with regulatory compliance will continue to increase with
recently adopted corporate governance requirements, including requirements under
the Sarbanes-Oxley Act of 2002,as well as new rules implemented by the
United States Securities and Exchange Commission, Canadian Securities
Administrators, the AMEX and the TSX. The Company expects these rules and
regulations to significantly increase its legal and financial compliance costs
and to make some activities more time-consuming and costly. There can be no
assurance that the Company will continue to effectively meet all of the
requirements of these new regulations, including Sarbanes-Oxley Section 404
andMultilateral Instrument 52-109.Any failure to effectively
implement new or improved internal controls, or to resolve difficulties
encountered in their implementation, could harm the Companys operating results,
cause the Company to fail to meet reporting obligations or result in management
being required to give a qualified assessment of the Companys internal controls
over financial reporting or the Companys independent auditors providing an
adverse opinion regarding managements assessment. Any such result could cause
investors to lose confidence in the Companys reported financial information,
which could have a material adverse effect on the Companys stock price. The
Company also expects these new rules and regulations may make it more difficult
and more expensive for it to obtain director and officer liability insurance,
and it may be required to accept reduced policy limits and coverage or incur
substantially higher costs to obtain the same or similar coverage. As a result,
it may be more difficult for the Company to attract and retain qualified
individuals to serve on its board of directors or as executive officers. If the
Company fails to maintain the adequacy of its internal controls, the Company's
ability to provide accurate financial statements and comply with the
requirements of the Sarbanes-Oxley Act of 2002and/or Multilateral
Instrument 52-109could be impaired, which could cause the Company's stock
price to decrease.

Material Mineral Property

The following is a narrative description of the Companys only
material property.

The Rosemont Property

On June 1, 2005, the Company announced that it had entered into
  an Option Agreement to purchase 100% of the Rosemont property in Pima County,
  Arizona. The Option Agreement required the cash payment of US$20,800,000 payable
  over a three-year period. After making the initial payment of $8,439,226 (US$6,666,666)
  in June 2005, the Company completed the remaining payments, after a reduction
  for early payment provisions of approximately $470,000, of $16,114,985 (US$
  13,733,582) on March 31, 2006 and thereby acquired a 100% working interest in
  the property subject to the 3% NSR.

In April 2007 the Company filed the NI 43-101 compliant technical
  report entitled 2007 Mineral Resource Update for the Rosemont Project,
  Pima County, Arizona, USA (the 2007 Mineral Resource Update)
  dated April 26, 2007. The principal author responsible for the overall preparation
  of the 2007 Mineral Resource Update is William L. Rose, P.E. of WLR Consulting
  Inc. Mr. Rose is a Qualified Person as such term is defined in NI 43-101. Other
  contributors to the 2007 Mineral Resource Update include: Michael Clarke, PhD,
  Qualified Person (non-independent), Donald Elkin of Mine Reserves Associates,
  Inc., Jerry T. Hanks, P.E. Qualified Person, Shea Clark Smith, P.G., Qualified
  Person, an independent consulting geochemist, Mark G. Stevens, C.P.G. Qualified
  Person (non-independent), James Sturgess, Qualified Person (non-independent).

The following is based upon information obtained from the 2007
  Mineral Resource Update:

The property which includes patented and unpatented claims, fee
  land and surface grazing rights is approximately 50 kilometers southeast of
  Tucson. The Rosemont property covers most of the Rosemont Mining District and
  adjacent Helvetia Mining District and contains three known potentially open-pit
  mine-able copper/molybdenum/silver (Cu-Mo-Ag) skarn deposits on
  patented mining claims. Taken together the land position is sufficient to allow
  mining of the open pit, processing of ore, storage of tailings, disposal of
  waste rock, and operation of milling equipment. These lands are accessible under
  provisions of the

---

- 16 -

Mining law of 1872, subject to obtaining approval from the US
Forest Service after completion of an Environmental Impact Statement process.
The Environmental Impact Statement process includes interagency consultation on
endangered species and cultural resources. The use of the project surface rights
will require obtaining a number of federal, state, and local permits and
approvals, which are now in progress.

The Rosemont deposit, the principal known area of
mineralization on the Rosemont property is a typical representative of the
porphyry copper class of deposits. Similar to many of other south-western US
deposits in this class, Rosemont consists of broad-scale skarn mineralization
developed in Paleozoic-aged carbonate sedimentary rocks adjacent to their
contact with quartz-latite or quartz-monzonite porphyry intrusive rocks. The
deposit has been extensively drilled using diamond core holes.

The Rosemont Property occupies flat to mountainous topography
in the north-eastern and north-western flanks of the Santa Rita Mountains at a
surface elevation ranging from 6,290 to 4,000 feet (1,900-1,200 meter) above sea
level. The area is considered part of the Basin And Range physiographic province
characterized by high mountain ranges adjacent to alluvial filled basins.

The eastern portion of the property is easily reached from the
city of Tucson by traveling Interstate Highway I-10 approximately 25 miles (40
km) east to its intersection with Arizona State Highway 83, then continuing
south for approximately 11 miles (18 km) where Highway 83 crosses the Rosemont
property. From Highway 83, a number of unimproved dirt roads access various
locations on the property. The western portion of the property is reached from
Tucson by following Interstate Highway I-19 south about 20 miles (30 km) to the
town of Sahuarita, then east 10-15 miles (20 km) along any of a number of
unpaved roads that lead to the property.

Weather presents no significant difficulties to mining
operations in the area. The semi-arid climate, typical of the Arizona-Sonoran
Desert, produces an average of about 8 inches (20 cm) annual rainfall, mostly
during the late summer and winter months. Temperatures range from about 25oF to
115oF (-4oC to 45oC). The resulting vegetation ranges from mesquite and grasses
in the lower elevations to oak, pine and juniper in the mountains.

Sufficient mining personnel are available within commuting
distance of the site. Tucson, Arizona is a city in excess of 500,000 people and
has a well known history of mining in the area. The proximity of the property to
the metropolitan Tucson area allows for the convenient transportation of
workers, equipment, and supplies to the site using established road ways.

Power is available from existing high voltage lines that pass
within a few miles of the site, although project requirements and surplus line
capacities are in the process of being defined. Adequate water rights have been
purchased and will be piped to the site, as sufficient water is not available on
the site at this time. Approval of utility corridors and pipelines will be
required, permitting for which is currently in progress.

Results of the 2007 Mineral Resource Update were incorporated
  in the Feasibility Study details of which are provided below under Feasibility
  Study.

Mine Plan of Operations

In July 2007 the Company formally filed the MPO with the US
Forest Service. The detailed plan for Augustas Rosemont Copper project includes
progressive design, conservation and sustainability initiatives. Once approved,
the final Rosemont MPO becomes a binding document that assures the MPOs
commitments, including reclamation and closure funding guarantees. Highlights of
the plan include:

- Significant Economic Benefits The Rosemont Copper project will
  produce more than 230 million pounds of copper per year, along with
  significant amounts of molybdenum and silver. Rosemont

---

- 17 -



- Water Conservation The Rosemont design avoids impacts to the
  Davidson Canyon and Cienega Creek watershed. Central Arizona Project (CAP)
  water is already being purchased and stored in advance. Rosemont will add to
  the local aquifer more water than it will use, leaving a five-percent net
  water gain in the community. In addition, new water conservation and recycling
  techniques at Rosemont will save 50 to 60 percent of the total water used in
  traditional mining.
- Concurrent Reclamation Reclamation will begin within the first
  year of mine operation and will feature state-of-the-art practices. They
  include greenhouse studies for optimum revegetation, cattle use to prepare the
  seedbed for replanting, and construction of perimeter buttresses to stabilize
  soil and shield visual impact from state highway SH 83. Only a small portion
  of the final pit configuration will be visible from the highway.
- Community Conservation At the end of the estimated 20 years of
  production, Rosemont Copper will leave open space and conservation easements
  to the community in perpetuity. In addition, the project will endow funds to
  support local projects for generations to come.

Water conservation is one of the most important components of
the Companys plan to operate the Rosemont Copper project. By the end of 2007, a
total of 15,000 acre feet of water delivered by the Central Arizona Project has
been stored in the Tucson active management area basin, bringing the level
stored for Rosemont Copper to a three-year operating supply.

Using the MPO as a basis for permitting, Augusta will now move
through the National Environmental Policy Act permitting process, whereby the US
Forest Service initiates an Environmental Impact Statement and public review
process. The company continues to work with local interests to address relevant
factual concerns and issues as part of the National Environmental Policy Act
process.

Feasibility Study

In August 2006, the Company commenced the feasibility study on
Rosemont with M3 Engineering and Technology Corporation of Tucson, Arizona being
awarded the contract after a due bid and selection process. To lead the project
internally, the Company appointed Mr. Lance Newman as VP, Project Development
and Mr. Mark Stevens as Chief Project Geologist.

On August 28, 2007, the Company announced the Board approved
results of the Feasibility Study as a low cost open pit mine with a sulfide
concentrator and SX/EW plant to treat sulfide and oxide mineral reserves,
respectively.

The following is an extract of the Summary section of the
report entitled NI 43-101 Technical Report For The Rosemont Copper Project
Feasibility Study, Pima County, Arizona, USA, dated August 24, 2007 (Volume 1)
(the Feasibility Study) filed on SEDAR.The principal author responsible
for the overall preparation of the Feasibility Study is Dr. Conrad Huss, P.E.,
Qualified Person, of M3 Engineering & Technology Corporation and other
contributors to the Feasibility Study include: William L. Rose, P.E. a Qualified
Person, of WLR Consulting, Inc., Thomas L. Drielick, P.E, a Qualified Person, of
M3 Engineering & Technology Corporation, Michael Clarke, PhD
(non-independent Qualified Person), James A. Sturgess (non-independent Qualified
Person). Additional details regarding the Rosemont property may be obtained from
the Feasibility Report available on SEDAR at www.sedar.com, which readers are
encouraged to review in its entirety.

---

- 18 -

SUMMARY

Property

The Rosemont property is primarily a copper mining project with
appreciable amounts of molybdenum and silver by-products. Rosemont is being
developed by Augusta Resource Corporation (Augusta). The property consists of
132 patented lode claims comprising about 1968.5 acres and a contiguous package
of 864 unpatented lode mining claims comprising about 12,000 acres which
surround the core of patented claims. There are also 14 parcels of fee land
associated with the property, which are grouped into six individual areas that
total an additional 911 acres. The area covered by patented claims, unpatented
claims and fee land totals approximately 15,000 acres, and is situated within
the historic Helvetia Mining District on the northwestern flank of the Santa
Rita Mountain Range and the Rosemont Mining District on the northeastern flank
of the Santa Rita Mountain Range.

Mining activity in the Helvetia and Rosemont Mining Districts
dates to the mid 1800s, and by the 1880s production from mines on both sides of
the Santa Rita Mountains supported the construction and operation of the
Columbia Smelter at Helvetia, on the western side, and the Rosemont Smelter in
the Rosemont Mining District on the eastern side. Production ceased in 1951
after production of about 227,300 tons of ore containing an estimated 27.3
million pounds of copper, 1.1 million pounds of zinc and 180,760 ounces of
silver.

The copper mineralization of the Rosemont deposit is primarily
sulfide with a cap of oxide copper close to the surface. The sulfide and oxide
ore will be mined through conventional open pit mining techniques. Sulfide ore
will be processed by crushing, grinding, and flotation to produce a copper
concentrate product and a molybdenum concentrate product for market. The run of
mine (ROM) oxide ore will be leached and the resulting leach solution processed
through a solvent extraction and electrowinning facility to produce a copper
cathode product for market.

Location

The Rosemont copper-molybdenum-silver deposit is located in
Pima County, Arizona, USA on the northeastern flank of the Santa Rita Mountains
approximately 30 miles southeast of the city of Tucson Arizona. The property
occupies flat to mountainous topography at a surface elevation ranging from
4,000 feet to 6,290 feet and at geographical coordinates of approximately 31°
50 N and 110° 45 W.

Ownership

The Rosemont deposit is the principal known area of
mineralization on the Rosemont property, a group of patented mining claims,
unpatented mining claims and fee land that in aggregate total approximately
15,000 acres (6,100 hectares). Augusta first became interested in the Rosemont
deposit in 2005 and after completing a two phase drilling program in 2005 and
2006, Augusta completed the purchase of a 100 percent interest in the property
in March 2006. The purchase is subject to a 3% Net Smelter Return (NSR).

Augusta maintains offices in Denver, Colorado, USA, and
Vancouver, British Columbia, Canada. The company is traded on the American Stock
Exchange and the Toronto Stock Exchange under the symbol AZC and on the
Frankfurt Stock Exchange under the symbol A5R.

Details regarding history including prior ownerships,
development of the property and the type, amount, quantity and results of
exploration work undertaken by previous owners, and any previous production on
the property to the extent known can be found in the Feasibility Study section
1.8 History pages 1-23 to 1-24 which is incorporated herein by reference.

---

- 19 -

Geology and Mineralization

The Rosemont deposit is a typical representative of the
porphyry copper class of deposits. Similar to many other southwestern USA
deposits in this class, Rosemont consists of broad-scale skarn mineralization
developed in Paleozoic-aged carbonate sedimentary rocks adjacent to their
contact with quartz-latite or quartz-monzonite porphyry intrusive rocks. The
deposit has been extensively drilled using diamond core holes. Broadly
disseminated sulfide mineralization occurs in the Paleozoic units. Near surface
weathering has resulted in the oxidation of the sulfides in the overlying
Mesozoic units.

Additional details regarding mineralization encountered on the
Rosemont property can be found in the Feasibility Study section 1.11
Mineralization pages 1-26 to 1-27 which is incorporated herein by reference.

Exploration and Sampling

Augusta has recently completed a 40-hole, 68,727 feet diamond
drilling program on the deposit, consisting of resource, geotechnical, and
metallurgical holes. Previously in 2005, Augusta carried out a 15-hole, 27,402
feet diamond drilling program. The results of both of these drilling programs
have been integrated with approximately 210,000 feet of previous drilling,
conducted by other companies prior to Augustas involvement, to estimate the
mineral resources presented in this report. This work was incorporated into an
updated mineral resource statement provided in a WLRC Technical Report dated
April 26, 2007. Detailed information regarding drilling, sampling and assaying
and measures taken to ensure the validity and integrity of samples taken can be
found in the Feasibility Study section 1.13 Drilling pages 1-28 to 1-30, section
1.14 Sampling Method and Approach pages 1-30 to 1-34 and section 1.15 Sample
Preparation, Analysis and Security pages 1-34 to 1-41 which are herein
incorporated by reference.

Mineral Resource and Mineral Reserve Estimates

A block grade model of the Rosemont deposit was constructed using
  MEDSystem® software using a geologic model developed in Gemcom® by
  Augusta personnel and contract geologists. Statistical studies were conducted
  to identify outliers to the distribution of assays and to estimate the ranges
  of influence for block grade estimation. Block grade estimations were conducted
  by rock type using 50-foot composited data and ordinary kriging interpolation
  methods. Blocks were also classified into measured, indicated and inferred resources
  in a manner that conforms to Canadian National Instrument 43-101 standards.
  The mineral resource and mineral reserve estimation work was performed by or
  under the direction of Mr. William Rose, P.E., WLR Consulting Inc.s (WLRCs)
  Principal Mining Engineer and an independent Qualified Person under the standards
  set forth by Canadian NI 43-101.

Updated measured and indicated mineral resource estimates for
the Rosemont deposit are summarized in Tables 1-1 and 1-2, respectively. The
combined measured and indicated mineral resource estimates are presented in
Table 1-3. Inferred mineral resource estimates are shown in Table 1-4. US units
are used in these estimations, where tons refer to short tons (2000 lbs). The
mineral resource estimates contained herein are effective as of April 26, 2007.

---

- 20 -

Table 1-1 Rosemont Deposit Measured Mineral Resources

Material/ Cutoff (%Cu)
    Ktons
    %Cu
    %Mo
    Ag 
        Oz/ton
    lbs Cu (millions)
    lbs Mo (millions)
    oz Ag (millions)Oxides: 0.10 0.15 0.20
    14,300 9,000 5,000
    0.21 0.27 0.35
    - - -
    - - -
    61 48 35
    - - -
    - - -Sulfides: 0.15 0.20 0.25 0.30
    132,400 120,400 108,900
      98,300
    0.51 0.55 0.58 0.61
    0.015 0.016 0.016 0.016
    0.14 0.15 0.15 0.16
    1,350 1,312 1,261 1,203
    39.7 38.5 34.8 31.5
    18.1 17.5 16.6 15.5


Table 1-2 Rosemont Deposit Indicated Mineral
Resources

Material/ Cutoff (%Cu)
    Ktons
    %Cu
    %Mo
    Ag 
        Oz/ton
    lbs Cu (millions)
    lbs Mo (millions)
    oz Ag (millions)Oxides: 0.10 0.15 0.20
    60,200 34,300 16,500
    0.20 0.25 0.35
    - - -
    - - -
    236 174 116
    - - -
    - - -Sulfides: 0.15 0.20 0.25 0.30
    476,600 422,700 373,100
      325,300
    0.45 0.49 0.52 0.56
    0.014 0.014 0.014 0.015
    0.11 0.12 0.12 0.13
    4,289 4,109 3,888 3,630
    133.4 118.4 104.5 97.6
    52.0 49.0 45.9 42.3


Table 1-3 Rosemont Deposit
Combined Measured and Indicated Mineral Resources

Material / Cutoff (% Cu)
    Ktons
    % Cu
    % Mo
    Ag Oz/ton
    lbs Cu (millions)
    lbs Mo (millions)
    oz Ag (millions)Oxides: 0.10 0.15 0.20
    74,500 43,300 21,500
    0.20 0.26 0.35
    - - -
    - - -
    297 222 151
    - - -
    - - -Sulfides: 0.15 0.20 0.25 0.30
    609,000 543,100 482,000
      423,600
    0.46 0.50 0.53 0.57
    0.014 0.014 0.014 0.015
    0.12 0.12 0.13 0.14
    5,640 5,421 5,149 4,834
    173.2 156.9 139.3 129.0
    70.1 66.5 62.4 57.8


---

- 21 -

Table 1-4 Rosemont Deposit Inferred Mineral Resources
(Excludes Measured & Indicated)

Material / Cutoff (% Cu)
    Ktons
    % Cu
    % Mo
    Ag Oz/ton
    lbs Cu (millions)
    lbs Mo (millions)
    oz Ag (millions)Oxides: 0.10 0.15 0.20
    30,000 15,700 9,000
    0.20 0.28 0.36
    - - -
    - - -
    121 87 64
    - - -
    - - -Sulfides: 0.15 0.20 0.25 0.30
    205,100 163,000 137,900
      109,800
    0.37 0.43 0.46 0.51
    0.007 0.007 0.008 0.008
    0.05 0.06 0.06 0.07
    1,526 1,386 1,274 1,124
    28.7 22.8 22.1 17.6
    10.3 9.3 8.7 7.7


Augustas 2006 drilling campaign at the Rosemont deposit has
increased both the quantity and confidence level of the estimated mineral
resources, which presently totals about 543 million tons of measured and
indicated sulfide mineral resources grading 0.50% Cu, 0.014% Mo, and 0.12 ounces
per ton Ag, at a 0.20% Cu cutoff. An additional 163 million tons of inferred
sulfide mineral resources are estimated at a grade of 0.43% Cu using the same
cutoff. Augustas recent drilling program was successful in converting
significant tonnages of inferred material into measured and indicated
classifications. Mineral resources that are not mineral reserves do not have
demonstrated economic viability.

In addition, geologic and metallurgical studies conducted by
Augusta have shown the potential for considering the oxide copper mineralization
that overlies the sulfide deposit. Estimated measured and indicated oxide
mineral resources total nearly 75 million tons grading 0.20% Cu, at a 0.10% Cu
cutoff. An additional 30 million tons of inferred oxide mineral resource are
estimated at a grade of 0.20% Cu, using the same cutoff.

The classification of currently inferred sulfide and oxide
mineral resources can potentially be improved with further drilling. Additional
mineral resources may be found in extensions to the north and east of the
Rosemont deposit. Mineralization also is known to occur in the Broadtop Butte,
Copper World and Peach-Elgin deposits on the Rosemont property, which could
potentially add to the total mineral resource base of the Rosemont area.

The Rosemont deposits proximity to the topographic surface
makes it amenable to open pit mining methods. Floating cone analyses of economic
pit limits were conducted using a variety of metal prices and operating costs. A
base case mining pit shell generated at metal prices of $1.50/lb Cu, $10.00/lb
Mo and $8.50/oz Ag and anticipated operating costs was used to design an
ultimate pit for mineral reserve estimation and subsequent mine planning.

Rosemont mineral reserves have been estimated from only
measured and indicated mineral resources; all inferred resources have been
treated as waste. Net Smelter Returns (NSRs) were computed as a means of
aggregating the net recoverable value of the three primary metals in sulfide
rock types; only copper was used in calculating oxide NSRs. No recovery of
molybdenum and silver is projected from oxide ore leaching and only quartz
monzonite porphyry (QMP), andesite and arkose rock types were considered as
potential oxide leach ore (no NSRs were computed for other oxide rock types). An
internal NSR cutoff of $3.29/ton was used for sulfide mill ore and $1.77/ton was
used for oxide leach ore. Table 1-5 summarizes the estimated mineral reserves
for the Rosemont deposit as of the date of this report.

---

- 22 -

Table 1-5 Rosemont Mineral Reserves

Classification
    Sulfides>= 3. 29$/ton NSR
      Cutoff
    Oxides >=1.77 $/ton NSRKtons
    NSR
      $/t
    TCu
      %
    Mo %
    Ag
      oz/t
    Ktons
    NSR
      $/t
    TCu
      %Proven
    126,120
    12.25
    0.50
    0.015
    0.14
    9,938
    3.22
    0.19Probable
    366,607
    11.29
    0.46
    0.015
    0.12
    39,507
    2.96
    0.17Total
    492,727
    11.53
    0.47
    0.015
    0.12
    49,445
    3.01
    0.18


At prices of $1.50/lb Cu, $10.00/lb Mo and $8.50/oz Ag,
combined proven and probable sulfide mineral reserves within the designed
Rosemont ultimate pit total nearly 493 million tons grading 0.47% Cu, 0.015% Mo
and 0.12 oz/ton Ag. Proven and probable oxide mineral reserves total about 49.5
million tons grading 0.18% Cu. The pit contains a total of about 1.83 billion
tons of material, of which 542 million tons are mineral reserves and 1.29
billion tons are waste rock, resulting in a stripping ratio of 2.38:1 (tons
waste per ton of ore). Contained metal in the sulfide (proven and probable)
mineral reserves is estimated at 4.65 billion pounds of copper, 146 million
pounds of molybdenum and 61 million ounces of silver. Contained metal in proven
and probable oxide mineral reserves is estimated at 173 million pounds of
copper. All of the mineral reserve estimates reported above are contained in
the mineral resource estimates presented in Tables 1-1 through 1-3.

The Rosemont ultimate pit contains approximately 52 million
tons of inferred sulfide mineral resources and nearly 17 million tons of
inferred oxide mineral resources that are above respective sulfide and oxide NSR
cutoffs of $3.29/ton and $1.77/ton. These resources are included in the waste
estimates presented in the previous paragraph. Inferred mineral resources are
considered too speculative geologically to have the economic considerations
applied to them that would enable them to be categorized as mineral reserves.
Inferred mineral resources have a great amount of uncertainty as to their
existence and as to whether they can be mined legally or economically. It cannot
be assumed that all or any part of inferred mineral resources will ever be
upgraded.

Mining

Six internal mining phase designs were also developed, bringing
the total number of phases to seven. A production scheduling analysis was
conducted to determine preproduction and long-term waste rock stripping rates.
This scheduling was based on a milling rate of 75,000 tons per day (tpd),
operating 365 days per year, for a total sulfide ore feed of 27.375 million tpy.
Oxide ore will be delivered to the leach pad as it is encountered during the
course of mining. Mine and plant operations will be scheduled for continuous
coverage, using two 12-hour shifts per day, seven days per week. Ramp-up
schedules were developed for preproduction stripping and sulfide ore milling
during the first year of plant operations.

Mining sequence plans were developed on a quarterly basis
through the end of Year 2 and on an annual basis through Year 7. Additional
plans include mining progress through the end of Year 10, Year 15 and Year 19
(end of mining). A production schedule was then generated from these mining
plans, indicating a project operating life of 18.2 years using only proven and
probable mineral reserves. Peak mining rates of 342,000 tpd of total material
(ore and waste) will be realized in Years 1 and 2. Typical mining rates during
Years 3-12 will be 247,000 tpd of waste rock and oxide ore, or 322,000 tpd of
total material (including 75,000 tpd of sulfide ore). An 18-month preproduction
stripping program will be required to open the deposit up for initial ore
deliveries to the mill.

Overburden and other waste rock encountered in the course of
mining will be placed into a waste rock storage (WRS) area located to the
southeast and south of the planned open pit and into the dry stack tailings
area, where dewatered mill tailings will be placed behind waste rock containment
buttresses. The dry stack

---

- 23 -

tailings area is north of the WRS area and east-northeast of
the pit. The oxide ore heap leach pad will be located between the dry stack
tailings area and the initial WRS area.

The proposed pit operations will be conducted from 50-foot-high
benches using large-scale equipment, including up to: four 12.25 -inch-diameter
rotary blasthole drills, three 60-cu-yd electric mining shovels, two 33-cuyd
front-end loaders, thirty-one 260-ton off-highway haul trucks, five 580-to
850-hp crawler dozers, three 630-hp rubber-tired dozers, three 270- to 500-hp
motor graders and three 20,000- to 30,000-gallon off-highway water trucks. Four
rotating crews will be used for continuous operator and maintenance coverage.
Peak manpower (and equipment) levels will occur in Year 7, with 45 supervisory
and technical personnel, 183 workers in mine operations and 99 in mine
maintenance, totaling 327 people.

Metallurgical Testing

The earliest existing records of metallurgical testing are from
the period 1974 - 1975, at which time grinding and flotation tests were
performed. In the first half of 2006, Augusta initiated test work to provide a
better understanding of the metallurgy of the Rosemont deposit and establish the
design criteria for the design of a process facility.

The Rosemont sulfide ore was tested to determine grinding and
flotation criteria. The test work indicates a process of crushing and grinding
the ore to 80% passing 105 micron size distribution followed by bulk flotation
to recover copper and molybdenite minerals. A molybdenite concentration circuit
to treat the bulk flotation concentrate will be able to produce a molybdenite
concentrate.

The Rosemont oxide ore was tested to determine heap leaching
design criteria. The test work indicates that a heap leach process on run of
mine ore can recover the copper into a pregnant leach solution (PLS) that can be
subsequently processed in a solvent extraction  electrowinning (SX-EW)
circuit.

Process Flowsheet

Both sulfide and oxide copper ore will be processed. Sulfide
ore will be transported from the mine to the primary crusher by off-highway
haulage trucks then conveyed to the concentrator facilities. Oxide ore will be
transported from the mine to a run of mine heap leaching facility by the
off-highway haulage trucks. Copper concentrate produced at the concentrator
facility will be loaded into highway haul trucks and transported to a
concentrate smelter or to a rail siding for longer distance shipments.
Molybdenum concentrate produced at the concentrator facility will be bagged and
loaded onto trucks for shipment to market. Oxide ore will be leached with acidic
solution and the leach solution will be processed using solvent extraction
electrowinning (SX-EW) technology to produce high purity cathode copper plates.
The copper cathodes will be loaded onto trucks for shipment to market.

The process selected for recovering the copper and molybdenite
minerals can be classified as conventional. The sulfide ore will be crushed
and ground to a fine size and processed through mineral flotation circuits.

The process selected for the recovery of copper from the oxide
ore can be classified as conventional. The oxide ore will be heap leached and
the copper recovered from the leach solution using solvent extraction
electrowinning technology.

Extraction Rates

Sulfide ore metal recoveries are indicated by the test work to
be for copper (84%), gold (73%), and silver (78%) in a copper concentrate, and
molybdenum (56%) in a molybdenite concentrate.

---

- 24 -

Oxide ore copper recovery is indicated by the test work to be
65%.

Process Reagents

Reagent consumption rates for the full scale plant operation
have been estimated from the test results. The reagents that will be used in the
sulfide circuit are considered to be conventional. Consumption rates for
collectors is estimated to be about 0.16 lbs/ton of sulfide ore, lime about 1.56
lbs/ton, and modifiers, frothers and other about 0.25 lb/ton. The molybdenite
recovery circuit will consume about 0.172 lbs/ton of sulfide ore in modifiers,
collectors, and frothers.

In the oxide ore leaching circuit, sulfuric acid consumption is
estimated to be 28.6 lbs/ton ore. In the SX-EW circuit, extractant consumption
is estimated to be 0.0002 lbs/lb cathode copper, diluent at 0.001 lbs/lb, all
other electrowinning additives 0.0134 lbs/lb, and solution filtering additives
at 0.04 lbs/lb.

Power

The power supply for the Rosemont mine and process facilities
will be administered by Tucson Electric Power (TEP) under a shared service
agreement with TRICO, a local cooperative. The estimated connected load for the
project is 139 MW and will be supplied by a minimum of a 138 kV line to site.
The estimated operating load for the project is approximately 106 MW.

Four options to connect to the existing TEP and / or Southwest
Transmission Cooperative (SWTC) facilities were explored during the feasibility
study. A summary discussion of the options is in Section 1.25.6 of this
Technical Report and in Section 8 of the Feasibility Study Report. The option
selected was to connect to an upgraded 138 kV transmission line running from the
TEP Vail substation and serving Santa Cruz County and Nogales. The tap will be
at the northern boundary of the Santa Rita Experimental Range with a new 138 kV
transmission line to the Rosemont site. The alignment will follow the northern
and eastern boundaries of the Santa Rita Experimental Range to the western
access road leading to site. This option provided the shortest distance for the
new transmission line to site. A substation would be provided at the connection
to the TEP transmission line and step down transformers installed to distribute
lower voltage power to the fresh water pump stations following the same
alignment as the transmission line.

Water

The fresh water requirements for the Rosemont facilities are
about 5,000 acre-feet per year with a peak demand of 5,000 gallons per minute
(gpm) and an average demand of 3,370 gpm. All gallons in this report are United
States gallons. Water will come from wells located west of the Santa Rita
Mountains and will be pumped to the fresh water and fire water storage tank
located at the Rosemont site.

The daily usage for potable water is about 17,000 gallons per
day, fresh water makeup is 4.8 million gallons per day, and the recycle process
water is 37 million gallons per day. There is also a fire water distribution
system throughout the mine site.

Augusta has committed to recharging the Santa Cruz aquifer with
available Central Arizona Project (CAP) water.

Permits

Permitting for the Rosemont Copper Project involves federal
approvals and requires compliance with the National Environmental Policy Act
(NEPA). This in turn requires an Environmental Impact Statement (EIS) and
compliance with the Endangered Species Act (ESA) and the National Historic
Preservation Act (NHPA). A Mine Plan of Operation was submitted to the US Forest
Service on July 11, 2007 to initiate the

---

- 25 -

EIS and start the permitting process. Major federal permits
required to construct and begin operation of the Rosemont Project include a
National Pollutant Discharge Elimination System (NPDES), general storm water
permit and a Clean Water Act (CWA) Section 404 permit for discharge of fill
material to onsite washes. Major state permits include an aquifer protection
permit, Clean Air Act (CAA) Title V air emissions permit, and a general storm
water permit. The only major local permit required is a Pima County air quality
permit. Other permits which do not affect the timeline for project permitting
and subsequent start up include explosives permits, nuclear instrumentation
licenses, hazardous waste identification, tracking numbers and spill control
plans. Further details regarding permits can be found in the Feasibility Study
section 1.25.8 pages 1-87 to 1-96 which is incorporated herein by reference.

Operating Costs

The mine operating costs were developed by WLR Consulting,
Inc., based on a selected fleet of mine and support equipment. The average life
of mine operating costs for the mining operation is $0.82 per ton mined. These
costs include drilling, blasting, loading, hauling, road and dump maintenance
and general mining.

Mill process operating costs in Year 2 average $3.10/ton of
mill ore which includes crushing and conveying, grinding and classification,
flotation and regrind, concentrate thickening, filtration and dewatering,
tailings disposal and mill ancillary services. In addition, these operating
costs are broken into the major categories of labor, power, reagents,
maintenance, supplies and services.

Operating costs for the SX-EW process in Year 2 average $0.99/
lb. of cathode copper which includes heap leach pad, solvent extraction, tank
farm, electrowinning and SX-EW ancillary services. In addition, these operating
costs are broken into the major categories of labor, power, reagents,
maintenance, supplies and services.

The average operating cost for the supporting facilities and
general administrative expenses in Year 2 is $0.24/ton of sulfide ore. The
supporting facilities include laboratory, safety and environmental, accounting,
human resources, security and the general managers office.

The overall site direct operating cost estimate by cost center
in Year 2 is shown in Table 1-6 below. All costs are estimated in second quarter
2007 US dollars at an accuracy of ± 10%.

Table 1-6 Summary of Operating Costs Based on Year 2 of
Operations

Annual Cost ($000)Mining
    78,517Mill Operations
    84,800SX-EW Operations
    13,562Support Facilities and G&A
    9,110Total
    185,988


Capital Cost Estimate

The total capital cost estimate to design, construct and
commission the Rosemont facilities is estimated to be $797.8 million for the
combined sulfide and oxide plant. The estimate includes the direct field cost
for constructing the project at $619.1 million as well as $178.7 million for the
indirect costs associated with the design engineering, procurement and
construction, commissioning, spare parts, contingency and Owners cost. An
incremental cost for the oxide plant was estimated to be $57.4 million with
$45.0 million for the direct costs and $12.4 million for indirect costs. All
costs are expressed in second quarter 2007 US Dollars at

---

- 26 -

an accuracy of ± 15% with no allowance provided for escalation,
interest, foreign currency, hedging, or financing during construction.

Financial Analysis

The Rosemont Project economics were done using a discounted
cash flow model. The study evaluated two production cases; one case was sulfide
concentrate production only, and the other a sulfide concentrate plant with a
heap leach SX-EW plant for the treatment of the oxide copper reserves. Costs are
in constant second quarter 2007 US dollars with no provisions for escalation.
The financial indicators examined for the project included the Net Present Value
(NPV), Internal Rate of Return (IRR) and payback period (time in years to
recapture the initial capital investment). Annual cash flow projections were
estimated over the life of the mine based on capital expenditures, production
costs, transportation and treatment charges and sales revenue. The life of the
mine is 19 years.

The sales revenue is based on the production of three
commodities: copper, molybdenum and silver. Gold is also present in the copper
concentrates in the form of a saleable by-product credit. The estimates of
capital expenditures and site production costs have been developed specifically
for this project.

Metal sales prices used in the evaluation are listed in Table
1-7.

Table 1-7 Base Case and Historical Metals Prices

60/40 Weighted Average *
    3 Year Historical Average*Copper
    $2.61/ pound
    $2.38/ poundMolybdenum
    $31.06/ pound
    $30.47/ poundSilver
    $11.37/ pound
    $9.85/ poundGold
    $600.20/ ounce
    $536.66/ ounce


*60/40 weighted average of the 36
month historic price and the24 month futures price forecast

In addition to the above metal sales price cases, long term
metal prices were also evaluated. Long term metal prices were established using
the July 2007 twenty-four month forward prices trending down to long term fixed
prices of $1.50/lb Cu, $15.00/lb Mo, and $10.00/oz Ag over a four year period.
The metal prices used are shown below in Table 1-8.

Table 1-8 Long Term Metals Prices

Year 1
    Year 2
    Year 3
    Year 4
    Year 5 onwardsCopper
    $
      2.97/pound
    $
      2.60/pound
    $
      2.23/pound
    $
      1.86/pound
    $
      1.50/poundMolybdenum
    $31.96/pound
    $27.72/pound
    $23.48/pound
    $19.24/pound
    $15.00/poundSilver
    $13.65/ounce
    $12.74/ounce
    $11.83/ounce
    $10.91/ounce
    $10.00/ounceGold
    $695.50/ounce
    $671.63/ounce
    $647.75/ounce
    $623.88/ounce
    $600.00/ounce


The after tax financial results for the combined sulfide and
oxide case and the stand alone sulfide only case under the three metal pricing
scenarios are shown in Table 1-9.

---

- 27 -

Table 1-9 Financial Indicators (After Tax)

Combined Base Case (60/40 split)
    Combined Historical 36 Months
    Combined Long Term Metal Prices
    Sulfide Base Case (60/40 split
    Sulfide Historical 36 Months
    Sulfide Long Term Metal PricesNPV 0%
    5,116.6
    4,468.1
    2,100.5
    5,041.4
    4,409.4
    2086.0NPV 5%
    2,544.4
    2,182.9
    996.8
    2,505.2
    2,154.7
    996.1NPV 10%
    1,312.2
    1,093.4
    459.2
    1,294.4
    1,083.2
    466.6IRR
    30.2%
    27.4%
    20.9%
    30.9%
    28.0%
    21.6%Payback Years
    2.9
    3.2
    3.0
    2.9
    3.2
    3.0


Authors Conclusions

The results of the feasibility study for the Rosemont Copper
Project indicate that the project is technically and economically feasible.
There are opportunities for further optimization, and the project can be
constructed and operated in an environmentally sound manner. Based on the base
case metal prices of $2.61 per pound of copper, $31.06 per pound of molybdenum
and $11.37 per ounce of silver and the combined sulfide and oxide case, the
project would generate an after tax NPV (5%) of approximately $2.54 billion with
an IRR of about 30.2% and a payback of 2.9 years on an after tax basis. The
sulfide case only would generate an after tax NPV (5%) of approximately $2.51
billion with an IRR of 30.9% and a payback of 2.9 years. The oxide plant, on a
cash flow basis, adds value to the project; however, the internal rate of return
is slightly lower than the stand alone sulfide case.

It is acknowledged that there is some local public resistance
to developing the project in the Santa Rita Mountains; however, it is noted the
Mining Law of 1872 provides for development of public lands, subject to US
Forest Service approvals, after completion of an EIS, which is now underway.

Authors Recommendation

As part of the continued development program for the Rosemont
project, it is recommended that engineering studies continue to further optimize
the plant. Some potential exists to reduce the civil earthwork costs during
detail design. Additional geotechnical investigations are also needed to support
the detail design effort. Further metallurgical testing is recommended to
optimize metal recoveries and reagent selection and consumption. Further
filtration tests should be conducted on samples of the tailings by equipment
vendors to confirm filtration rate parameters relative to specific
manufacturer's equipment specifications.

Objectives for 2008

Augusta is focusing on three main objectives for 2008 for the
Rosemont Copper project. For permitting, we are targeting the completion of the
public scoping and submitting all state and federal permit applications as we
prepare a draft EIS. For financing, we plan to finalize the silver-backed
financing agreement with Silver Wheaton Corp. and identify the remaining
financial components of our strategy. For operations, we will award the
Engineering Procurement and Construction Management contract in order to
commence design engineering, and also intend to secure more orders for long lead
equipment. In concert with these main objectives, we will continue new
exploration work on the Rosemont property to expand the current open pit reserve
and define new resources.

---

- 28 -

|ITEM 5: | DIVIDENDS
|------- | ---------

The Company has not paid any cash dividends on its common
shares and has no present intention of doing so, as it anticipates that all
available funds will be utilized to finance exploration, development and future
investment opportunities. There are no restrictions that could prevent the
Company from paying dividends.

|ITEM 6: | DESCRIPTION OF CAPITAL STRUCTURE
|------- | --------------------------------

The Companys authorized share capital consists of an unlimited
number of common shares without par value of which as at December 31, 2007 there
were 88,588,061 common shares issued and outstanding. Each common share of the
Company has the following rights, privileges, restrictions and conditions
attached thereto:

| | (i)   | to vote at meetings of shareholders, except meetings at
      which only holders of a specified class of shares are entitled to
    vote:                                                                                                                                     
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                               
| | (ii)  | to share equally, share for share, in any dividends
      declared by the Company; and                                                                                                                                                                                        
| |       |                                                                                                                                                                                                                                                                               
| | (iii) | subject to the rights, privileges, restrictions and
      conditions attaching to any other class of shares of the Company, to share
      equally, share for share in the remaining property of the company upon
      liquidation, dissolution or winding-up of the
Company.

The Articles and By-laws of the Company contain no restrictions
on the right to hold or vote the Companys common shares.

|ITEM 7: | MARKET FOR SECURITIES
|------- | ---------------------

The common shares of the Company currently trade on the TSX and
AMEX. The graduation of the Company from the TSX Venture Exchange to the TSX
occurred on August 10, 2006 and the AMEX listing occurred on November 30, 2006.
The table below presents the high and low sale prices for the common shares of
the Company and the volume on a monthly basis for the TSX.

High and Low Prices and Volume for Fiscal 2007Period
    High
    Low
    VolumeDecember 2007
    4.39
    3.29
    2,056,535November 2007
    4.16
    3.25
    2,083,233October 2007
    4.39
    2.46
    6,222,500September 2007
    2.75
    2.08
    2,534,148August 2007
    3.39
    2.45
    3,131,527July 2007
    3.81
    3.12
    5,854,777June 2007
    3.50
    2.46
    7,163,916May 2007
    2.84
    2.39
    3,313,963April 2007
    2.58
    2.20
    2,484,160March 2007
    2.42
    1.86
    2,255,711February 2007
    2.32
    2.03
    2,248,236January 2007
    2.53
    1.99
    3,305,223


The table below presents the high and low sale prices for the
common shares of the Company and the volume on a monthly basis for AMEX.

---

- 29 -

High and Low Prices and Volume for Fiscal 2007Period
    High
    Low
    VolumeDecember 2007
    4.47
    3.28
    3,365,700November 2007
    4.47
    3.22
    2,916,700October 2007
    4.64
    2.46
    7,638,100September 2007
    2.78
    2.03
    1,684,900August 2007
    3.26
    2.30
    2,644,800July 2007
    3.70
    2.92
    2,696,300June 2007
    3.24
    2.26
    3,639,200May 2007
    2.61
    2.18
    2,082,100April 2007
    2.35
    1.91
    1,554,300March 2007
    2.10
    1.65
    1,147,600February 2007
    2.00
    1.73
    2,133,200January 2007
    2.07
    1.67
    2,918,000


The following table provides each class of the Companys
securities that was outstanding but not listed or quoted on a marketplace as at
December 31, 2007:

Type of Security
    Number Outstanding
    Exercise or Conversion Price
    Expiry DateStock Options
    104,500 450,000 125,000 100,000
      2,035,000 86,000 150,000 730,000 539,000 365,000
      50,000 1,035,000 150,000
    $0.10 $2.05 $1.96 $2.30 $1.56
      $2.07 $1.55 $2.07 $2.20 $1.78 $1.90 $2.12
      $3.61
    November 15, 2009 March 28, 2010 April
      13, 2010 June 23, 2010 August 22, 2010 August 22, 2010
      September 28, 2010 April 11, 2011 May 15, 2011 August 2,
      2011 August 8,2011 March 2, 2012 November 26, 2012Warrants
    12,997,600
    $4.10
    March
      17, 2008


As of the date of this AIF 6,232,999 options were outstanding
of which 2,777,498 were fully vested and exercisable. Each of the Companys
options is exercisable for one common share.

As of the date of this AIF there were 12,997,600 warrants
outstanding, each exercisable for one common share of the Company.

---

- 30 -

|ITEM 8: | DIRECTORS AND OFFICERS
|------- | ----------------------

Name, Municipality of Residence
      Present and Principal Occupation During the Last Five Years
      Date First Appointed as Officer
      Date Appointed as DirectorDonald B. Clark Richmond, BC, Canada
      VP Administration and
          Directorof the Company; CFO of the Company between June 2004 and
          July 2006; Director of Sargold Resource Corporation from May 1998 to
          October 2007; CFO of Sargold from May 2004 to July 2006; President and
          CEO and Director of Wildcat Silver Corporation since February 27, 2006
          and President and Director of Ventana Gold Corporation since March 2006.
          Sargold, Wildcat and Ventana are all mineral exploration and development
          companies.
      June 21, 1996
      February 1, 1996Gil Clausen 
        Denver, CO, USA
      President, CEO and Directorof the Company; Executive VP of Washington Group International,
          Inc., providers of integrated engineering, construction, and management
          solutions, between 2001 to March 2005.
      April 18, 2005
      March 28, 2005W. Durand Eppler(1)(2) (3)
        Denver, CO, USA
      Directorof the
          Company; CEO of Sierra Partners, LLC since April 2005 and President
          of New World Advisors, LLC since August 2004. Both Sierra Partners and
          New World Advisors provide strategic and business advisory services
          to global resource companies. Since July 2005, Chief Executive Officer
          of Coal International, Plc, a London (AIM) listed company with global
          coal operations and investments. VP of Newmont Mining Corporation between
          May 1995 and August 2004 and President of Newmont Indonesia between
          1998 and 2001, each of which are mining companies.
      Not Applicable
      June 15, 2005Christopher M.H. Jennings(2)(3)
        Grand Cayman, Cayman Islands, BWI
      Directorof the
          Company; Chairman of SouthernEra Diamonds Inc., a company engaged in
          diamond exploration in Canada, South Africa, Gabon, Australia and the
          Democratic Republic of Congo, Director of Southern Platinum Corp., a
          mineral exploration and development company, between September 2004
           June 2005; President and CEO of SouthernEra Resources Limited,
          a mineral exploration and development company, between April 1992 to
          April 2001.
      Not Applicable
      April 2002


---

- 31 -

Name, Municipality of Residence
      Present and Principal Occupation During the Last Five Years
      Date First Appointed as Officer
      Date Appointed as DirectorMichael A. Steeves(1)(2) Richmond, BC, Canada
      Directorof the
          Company; President and Chief Operating Officer and Director of Zazu
          Metals Corporation since November 2007. Consultant to the base metal
          industry between August 2005 to November 2007. VP Investor Relations
          of Glamis Gold Ltd., a mining company, between June 2002 and August
          2005. Director of Investor Relations of Coeur d'Alene Mines Corporation,
          a mining company, between October 1999 to June 2002.
      Not Applicable
      June 8, 1999Robert P. Wares(1)(3)
        Montreal, QC, Canada
      Directorof the
          Company; Executive VP and Chief Operating Officer of Osisko Exploration
          Ltd. (Osisko) since early 2006. He was President of Osisko
          from September 1998 to early 2006. Osisko is a Canadian junior exploration
          company holding interests in several properties located in Quebec, Canada
          and Brazil, South America.
      Not Applicable
      April 26, 1999Richard W. Warke 
        West Vancouver, BC, Canada
      VP Corporate Development
          and Chairmanof the Company; President of the Company between
          April 1999 to April 2005; CEO and Chairman of Sargold Resource Corporation,
          a mineral exploration and development company, between May 1998 to October
          2007 and President between May 1998 to December 2006.
      February 1, 1996
      February 1, 1996Mike Clarke Lakewood, CO, USA
      VP Explorationfor
          the Company; VP Exploration for Sargold Resource Corporation, a mineral
          exploration and development company, between April 2005 and October
          2007; Manager, Exploration for First Quantum Minerals Ltd., a mining
          company, between July 2004 and April 2005; Director of Exploration for
          the Saudi Arabian Mining Company between October 1999 to June 2004.
      April 13, 2005
      Not ApplicableBruce B. Nicol 
        Delta, B.C. Canada
      Senior VP and CFOfor
          the Company; CFO for Sargold Resource Corporation, a mineral exploration
          company, between September 2006 and October 2007; VP & Controller
          Placer Dome March 1996 to May 2006.
      September 1, 2006
      Not Applicable


---

- 32 -

Name, Municipality of Residence
      Present and Principal Occupation
        During the Last Five Years
      Date First Appointed as Officer
      DateAppointed as DirectorLance C. Newman 
        Highlands Ranch, CO, USA
      VP Project
          Developmentfor the Company; Refinery Manager for Stillwater Mining
          Company from March 1997 to August 2006
      August 2, 2006
      Not ApplicableRodney O. Pace 
        Tucson, AZ, USA
      VP Operationsfor the Company and General Manager of the Companys wholly
          owned subsidiary Rosemont Copper Corporation; Consultant to the Mining
          Industry from September 2006 to December 2007; VP North American Operations,
          Washington Group International, Inc.  Mining Division from January
          2002 to August 2006
      January 1, 2008
      Not ApplicableRaghunath N. Reddy 
        Denver, CO, USA
      VP Financefor the Company; Director of Finance, Washington Group International,
          Inc., from July 1998 to November 2007;
      November 26, 2007
      Not ApplicableJames A. Sturgess 
        Centennial, CO, USA
      VP Projects
          and Environmentfor the Company; Senior Associate for Stantec Consulting
          Inc., an environmental consulting firm, between December 2000 and October
          2005.
      October 1, 2005
      Not ApplicablePurni Parikh 
        Burnaby, BC, CANADA
      Corporate
          Secretaryfor the Company; Corporate Secretary for Wildcat Silver
          Corporation and Ventana Gold Corporation; Corporate Secretary for Sargold
          Resource Corporation between June 2000 to October 2007. Sargold, Wildcat
          and Ventana are all mineral exploration companies.
      July 1999
      Not Applicable


|(1) | Member of the Audit Committee                                    
|--- | -----------------------------------------------------------------
|(2) | Member of the Compensation Committee                             
|(3) | Member of the Nominating and Corporate Governance
      Committee

Directors are elected at each annual meeting of shareholders
and serve until the next annual meeting or until their successors are elected or
appointed.

To the knowledge of the Company, the number of common shares of
the Company which were beneficially owned, directly or indirectly, or over which
control or direction was exercised by all directors and executive officers of
the Company as a group as at the date of this AIF was [15,602,363}
representing [17.61]%.

Cease Trade Orders and Bankruptcies

No director or officer of the Company, or a shareholder holding
a sufficient number of securities of the Company to affect materially the
control of the Company, is, or within the 10 years before the date of this AIF
has been, a director or officer of any other company that, while that person was
acting in that capacity,

| | (a) | was the subject of a cease trade or similar order, or an
      order that denied the other company access to any exemption under
      securities legislation, for a period of more than 30 consecutive
    days;
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

- 33 -

| | (b) | was subject to an event that resulted, after the director
      or executive officer ceased to be a director or executive officer, in the
      company being the subject of a cease trade or similar order or an order
      that denied the relevant company access to any exemption under securities
      legislation, for a period of more than 30 consecutive days; or     
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                  
| | (c) | within a year of that person ceasing to act in that
      capacity, became bankrupt, made a proposal under any legislation relating
      to bankruptcy or insolvency or was subject to or instituted any
      proceedings, arrangement or compromise with creditors or had a receiver,
      receiver manager or trustee appointed to hold its assets, except as
      follows:

Richard W. Warke, the Chairman of the Company, is the President
and Director of Cybercom Systems Inc. (Cybercom) and Donald B. Clark, VP
Administration of the Company, is a Director of Cybercom. Cybercom was issued a
cease trade order on October 23, 2002 due to failure to file comparative annual
financial statements and quarterly report for the period ended January 31, 2002.
Cybercoms failure to filing the above resulted from its inability to pay filing
fees associated with such filing due to a lack of funding. Cybercom is currently
inactive and remains under cease trade order.

Wildcat Silver Corporation (Wildcat) requested and received
notice from the British Columbia Securities Commission of the issuance of a
management cease trade order (the MCTO) on October 30, 2007 in connection with
the late filing of its annual audited consolidated financial statements for the
fiscal year ending June 30, 2007. Wildcats failure to make the filing within
the required time frame was due to the need to clarify potential foreign tax
obligations relating to an acquisition it made. The required filing was made on
January 7, 2008 and the MCTO was revoked on January 8, 2008. The following
director or officer or director or both of the Company is a director or officer
or both of Wildcat: Donald Clark, Michael Steeves, Robert Wares, Bruce Nicol and
Purni Parikh.

Michael Clarke, VP Exploration of the Company, was VP
Exploration for Real del Monte Mining Corporation (RMM) between October 1997
and June 1999. Within a year after Mr. Clarke ceased to act in that capacity RMM
announced insolvent liquidation. As a result RMM, was delisted from the
exchanges it was then listed on. To the best of Mr. Clarkes knowledge there
were no charges of misconduct and the bankruptcy proceedings have come to
conclusion.

Personal Bankruptcies

Other than as described below, no director or officer of the
Company, or a shareholder holding a sufficient number of securities of the
Company to affect materially the control of the Company, or a personal holding
company of any such persons has, within the 10 years before the date of this
AIF, become bankrupt, made a proposal under any legislation relating to
bankruptcy or insolvency, or was subject to or instituted any proceedings,
arrangement or compromise with creditors, or had a receiver, receiver manager or
trustee appointed to hold the assets of the director or officer.

Richard Warke filed a proposal (the Proposal) with the
Official Receiver under the Bankruptcy and Insolvency Act on September
15, 1998. Despite filing the Proposal, by letter dated August 7, 2002 the TSX
Venture Exchange confirmed that Mr. Warke is acceptable to act as a director of
the Company.

Penalties or Sanctions

No director or officer of the Company, or a shareholder holding
a sufficient number of securities of the Company to affect materially the
control of the Company, has

| | (a) | been subject to any penalties or sanctions imposed by a
      court relating to securities legislation or by a securities regulatory
      authority or has entered into a settlement agreement since December 31,
      2000 that would likely be important to a reasonable investor in making an
      investment decision, with a securities regulatory authority;
  or
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

- 34 -

| | (b) | been subject to any other penalties or sanctions imposed
      by a court or regulatory body that would likely be considered important to
      a reasonable investor in making an investment
decision.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Conflicts of Interest

Directors and/or officers of the Company serve as directors
and/or officers of other public and private companies and devote a portion of
their time to manage other business interests. This may result in certain
conflicts of interest. The laws of Canada require the directors and officers to
act honestly, in good faith, and in the best interests of the Company and its
shareholders. Please refer to the subheading entitled Risk Factors - Our
officers and directors may have potential conflicts of interest under Item 4 of
this AIF for further details.

|ITEM 9: | INTEREST OF MANAGEMENT AND OTHERS IN
      MATERIAL TRANSACTIONS
|------- | ----------------------------------------------------------------

Within the three most recently completed financial years ended
December 31, 2007 and up to the date of this AIF, none of the following (a) a
director or executive officer of the Company; (b) a person or company that is
direct or indirect beneficial owner of, or who exercises control or direction
over, more than 10% of any class or series of outstanding voting securities of
the Company; and (c) an associate or affiliate of any of the persons or
companies referred to in the above paragraphs (a) or (b), has any material
interest, direct or indirect, in any transaction that has materially affected or
will materially affect the Company other than as stated in the Companys annual
audited financial statements for the year ending December 31, 2007 which is
incorporated here by reference and available on SEDAR at www.sedar.com.

|ITEM 10: | TRANSFER AGENTS AND REGISTRARS
|-------- | ------------------------------

The registrar and transfer agent for the Company is Computershare
  Investor Services Inc., 510 Burrard Street - 3rd Floor, Vancouver, B.C. V6C
  3B9, Canada.

|ITEM 11: | MATERIAL CONTRACTS
|-------- | ------------------

Other than in the ordinary course of the Companys business,
there are no material contracts that have been entered into by the Company since
the beginning of the Companys most recently completed financial year or that
are still in effect, other than as set out below:

|1. | The Warrant Indenture dated as of March 17, 2006 entered
      into between the Company and Computershare Trust Company of Canada
      pursuant to the Special Warrant Offering described under the heading
      General Development of the Business  Three Year
  History.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|ITEM 12: | INTEREST OF EXPERTS
|-------- | -------------------

Name of Experts

The following are names of persons or companies (a) that have
prepared or certified a statement, report or valuation described or included in
a filing, or referred to in a filing made under National Instrument 51-102 by
the Company during, or relating to, the Companys most recently completed
financial year; and (b) whose profession or business gives authority to the
statement, report or valuation made by the person or company:

| | (i)  | Ernst & Young of 23rd Floor, 700 West Georgia Street,
      Vancouver BC, V7Y 1C7 provided an auditors report dated February 29,
      2008, in respect of the Companys financial statements for the years ended
      December 31, 2007 and 2006.
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                     
| | (ii) | Dr. Conrad Huss, P.E., of M3 Engineering & Technology
      Corporation was the principal author responsible for the overall
      preparation of the NI 43-101 Technical Report for
the                                                            

---

- 35 -

| |        | Rosemont Copper Project Feasibility Study, Pima County,
        Arizona, USA, dated August 24, 2007;                                                                                                                                                   
| | ------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |        |                                                                                                                                                                                                                                                        
| | (iii)  | Mr. Thomas L. Drielick, P.E. of M3 Engineering &
        Technology Corporation was a co- author of the NI 43-101 Technical Report
        for the Rosemont Copper Project Feasibility Study, Pima County, Arizona,
        USA, dated August 24, 2007;
| |        |                                                                                                                                                                                                                                                        
| | (iv)   | Mr. William L. Rose of WLR Consulting Inc., was a co-
        author of the NI 43-101 Technical Report for the Rosemont Copper Project
        Feasibility Study, Pima County, Arizona, USA, dated August 24, 2007;                                    
| |        |                                                                                                                                                                                                                                                        
| | (v)    | Dr. Michael Clarke, PhD, was a co- author of the NI
        43-101 Technical Report for the Rosemont Copper Project Feasibility Study,
        Pima County, Arizona, USA, dated August 24, 2007;                                                       
| |        |                                                                                                                                                                                                                                                        
| | (vi)   | Mr. William L. Rose of WLR Consulting Inc. was the principal
        author responsible for the overall preparation of the 2007 Mineral Resource
        Update for the Rosemont Project, Pima County, Arizona, USA, dated April
        26, 2007;     
| |        |                                                                                                                                                                                                                                                        
| | (vii)  | Mr. Shea Clark Smith, P.G., of Minerals Exploration
        & Environmental Geochemistry was a co-author of the 2007 Mineral Resource
        Update for the Rosemont Project, Pima County, Arizona, USA, dated April
        26, 2007;                
| |        |                                                                                                                                                                                                                                                        
| | (viii) | Mr. Jerry T. Hanks, P.E. was a co-author of the 2007
        Mineral Resource Update for the Rosemont Project, Pima County, Arizona,
        USA, dated April 26, 2007;                                                                                
| |        |                                                                                                                                                                                                                                                        
| | (ix)   | Michael Clarke, PhD was a co-author of the 2007 Mineral
        Resource Update for the Rosemont Project, Pima County, Arizona, USA, dated
        April 26, 2007;                                                                                     
| |        |                                                                                                                                                                                                                                                        
| | (x)    | Mark G. Stevens was a co-author of the 2007 Mineral
        Resource Update for the Rosemont Project, Pima County, Arizona, USA dated
        April 26, 2007;                                                                                          
| |        |                                                                                                                                                                                                                                                        
| | (xi)   | James A. Sturgess was a co-author of the 2007 Mineral
        Resource Update for the Rosemont Project, Pima County, Arizona, USA dated
        April 26, 2007;                                                                                        
| |        |                                                                                                                                                                                                                                                        
| | (xii)  | Donald Elkin of Mine Reserves Associates, Inc. was
        a co-author of the 2007 Mineral Resource Update for the Rosemont Project,
        Pima County, Arizona, USA, dated April 26, 2007;                                                          

Interests of Experts

To the best of the Companys knowledge, the experts named under
this Item 12 did not have any registered or beneficial interest, direct or
indirect, in any securities or other property of the Company or one of its
associates or affiliates, when the experts prepared their respective reports,
and no securities or other property of the Company or one of its associates or
affiliates were subsequently received or to be received by such experts, other
than Michael Clarke and James Sturgess who, as officers of the Company, hold
stock options, in each case representing less than 1% of the outstanding shares
of the Company.

No person or director, officer or employee of a company named
under this Item 12 is expected to be elected, appointed or employed as a
director, officer or employee of Augusta or any associate or affiliate of
Augusta other than Michael Clark and James Sturgess who are officers of the
Company.

|ITEM 13: | AUDIT COMMITTEE INFORMATION
|-------- | ---------------------------

Audit Committee Information

Under MI 52-110 companies are required to provide disclosure
with respect to their audit committee including the text of the audit
committees charter, the composition of the audit committee and the fees paid

---

- 36 -

to the exernal auditor. The text of the Companys audit
committees charter is attached as Appendix 1 to this AIF.

The Companys current audit committee is comprised of the
following directors, Robert P. Wares, Michael A. Steeves (Chair), and W. Durand
Eppler. All are independent and financially literate as defined in Multilateral
Instrument 52-110 (MI 52-110).

The education and experience of each Audit Committee member
that is relevant to the performance of his responsibilities as a member of the
Audit Committee are as follows:

Mr. Steeves, the Chairman of the Audit Committee, is a
Chartered Financial Analyst, earned at the University of Virginia, and also
earned a MSC from the University of Manitoba. He has had a long career in the
mining industry as Senior Mining Analyst for Loewen Ondaatje McCutcheon and
Scotia McLeod for six years and latterly as VP / Director Investor Relations for
various mining/resource companies for fifteen years, including Glamis Gold Ltd.
from 2002 to 2005. Since November 2007, Mr. Steeves has been President and Chief
Operating Officer and Director of Zazu Metals Corporation a TSX listed
company.

Mr. Wares earned a BSC at McGill University and a P. Geo from
the Quebec Order of Geologists. He has been Chairman and Executive VP and Chief
Operating Officer of Osisko Exploration Ltd. (Osisko) since early 2006 prior
to which he was President of Osisko since September 1998. Osisko is listed on
the TSX.

Mr. Eppler is currently CEO of Sierra Partners, LLC and
president of New World Advisors, both of which provide strategic and business
advisory services to global resource companies. Previously, he was a VP of
Newmont Mining Corp. from 1995 to 2004. He was VP Corporate Planning from 1995
to 1998; President of Newmont Indonesia from 1998 to 2001; VP Corporate
Development from 2001 to 2002; and VP Newmont Capital, Ltd. from 2002 to 2004.
Newmont is currently the second largest gold mining company worldwide. He earned
a BA from Middlebury College and a MS from the Colorado School of Mines.

Pre-approval Policy

The Audit Committee nominates and engages the independent
auditors to audit the financial statements and approves all audit, audit-related
services, tax services and other services provided by the Companys external
auditors. Any services provided by the Companys external auditors that are not
specifically included within the scope of the audit must be pre-approved by the
audit committee prior to any engagement. The Chairman of the audit committee is
permitted to pre-approve work undertaken by the Companys external auditors
between audit committee meetings of up to C$25,000 per engagement.

External Auditor Service Fees

The aggregate fees billed by the Companys external auditors in
each of the last two fiscal years are as follows:

Financial Year Ending
    Audit Fees(1)
    Audit related Fees(2)
    Tax Fees(3)
    All Other Fees2006
    $80,000
    $64,000
    Nil
    Nil2007
    $185,000
    Nil
    $13,240
    Nil


|(1) | The aggregate audit fees billed.                                                                                                                                                                                                                                                                                                                      
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | The aggregate fees billed for audit related services that
      are reasonably related to the performance of the audit or review of the
      Companys financial statements, which are not included under the heading
      Audit Fees. Services provided include work on the prospectus issued in
      2006 as well as the AMEX and TSX listings.
|(3) | Fees related to advise on tax considerations for
      inclusion in the feasibility study on the Rosemont
  property.                                                                                                                                                                                                                                 

---

- 37 -

|ITEM 14: | ADDITIONAL INFORMATION
|-------- | ----------------------

Additional information, including directors' and officers'
remuneration and indebtedness, principal holders of the Company's securities,
options to purchase securities and interests of insiders in material
transactions, where applicable, is contained in the Company's Information
Circular for its most recent annual meeting of shareholders that involved the
election of directors, and additional financial information is provided in the
Company's comparative financial statements and MD&A for its most recently
completed financial year is available on SEDAR at www.sedar.com.

In addition, copies of documents, may be obtained from the
Company by contacting the Company at Suite 400  837 West Hastings Street,
Vancouver, BC, V6C 3N6, telephone (604) 687-1717, fax (604) 687-1715.

---

APPENDIX 1

Augusta Resource Corporation(the Corporation)

Audit Committee Charter

ARTICLE 1OVERALL PURPOSE/OBJECTIVES

|1.1 | The Audit Committee (the committee) will provide
      independent review and oversight of the Corporations financial reporting
      process, the system of internal control and management of financial risks,
      and the audit process, including the selection, recommendation, oversight
      and compensation of the Corporations external auditors. The committee
      will also assist the board of directors of the Corporation (the Board)
      in fulfilling its responsibilities in reviewing the Corporation's process
      for monitoring compliance with laws and regulations and its own code of
      business conduct. In performing its duties, the committee will maintain
      effective working relationships with the Board, management, and the
      external auditors and monitor the independence of the external auditors.
      The committee will also be responsible for reviewing the Corporations
      financial strategies, its financing plans and its use of the equity and
      debt markets.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|1.2 | To perform his or her role effectively, each committee
      member will obtain an understanding of the responsibilities of committee
      membership as well as the Corporations business, operations and
    risks.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

ARTICLE 2AUTHORITY

|2.1 | The Board authorizes the committee, within the scope of
      its responsibilities, to seek any information it requires from any
      employee and from external parties, to retain outside legal or
      professional counsel and other experts and to ensure the attendance of
      company officers at meetings as appropriate. The committee will have the
      authority to engage such independent counsel and other advisers as it
      deems necessary to carry out its duties. The committee will also have
      authority to obtain advice and assistance from any officer or employee of
      the Corporation.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

ARTICLE 3FUNDING

|3.1 | The Corporation will provide appropriate funding, as
      determined by the committee, for payment of:
|--- | -------------------------------------------------------------------------------------------------------

(a)      compensation to the
Corporation's external auditors, as well as any other accounting firm engaged to
perform audit, review or attest services for the Corporation;

(b)      any independent counsel or
other adviser retained by the committee; and

(c)      ordinary administrative
expenses of the committee that are necessary or appropriate in carrying out its
duties.

The committee will promptly report to the Board its engagement
of any advisor, including the scope and terms of such engagement.

---

- 2 -

ARTICLE 4ORGANIZATION

4.1      Membership.

(a)      The Committee will be
comprised of not less than three members of the Board.

(b)      All of the members of
the committee will meet the applicable independence and experience requirements
of the law, including MI 52-110 of the Canadian Securities Administrators (MI
52-110), Sarbanes-Oxley, the rules promulgated by the Securities and Exchange
Commission (the SEC), and rules promulgated by the American Stock Exchange
(the AMEX) (except in the circumstances, and only to the extent, permitted by
all applicable legal and regulatory requirements).

(c)      One of the members of
the committee will be an audit committee financial expert pursuant to the
requirements of the SEC and AMEX (except in the circumstances, and only to the
extent, permitted by all applicable legal and regulatory requirements).

(d)      No director who serves
on the audit committees of more than three public corporations other than the
Corporation will be eligible to serve as a member of the committee.

(e)      Each member of the
committee will be appointed by the Board on annual basis immediately following
each annual general meeting of the shareholders of the Corporation, and will
serve at the pleasure of the Board or until the earlier of:

(i)      the commencement of the
next annual meeting of the shareholders of the Corporation at which the members
term of office expires;

(ii)      the death of the member;
or

(iii)      the resignation,
disqualification or removal of the member from the committee or from the
Board.

The Board may fill any vacancy in the membership of the
committee.

(f)      If not appointed by the
Board, the chairman of the committee will be elected by the committee from among
their number time to time.

(g)      A quorum for any meeting
will be a majority of the members of the committee, present in person or by
telephone or other telecommunication device that permits all persons
participating in the meeting to speak and to hear each other. Decisions by the
committee will be by the affirmative vote of a majority of the members of the
committee, or by consent resolutions in writing signed by each member of the
committee.

(h)      The secretary of the
committee will be such person as may be appointed by the committee.

4.2      Attendance at
Meetings.

(a)      The committee may invite such
other persons (e.g. the CEO and/or the CFO) to its meetings, as it deems
appropriate.

---

- 3 -

(b)      The external auditor is
entitled to receive notice of, and to be present and participate at, all
meetings of the committee, and may be expected to comment on the financial
statements in accordance with best practices.

(c)      Meetings of the
committee will be held at least on a quarterly basis. Special meetings may be
convened by any member of the committee, by either the Chief Executive Officer
or the Chief Financial Officer of the Corporation, or by the external auditors,
as required.

(d)      The proceedings of all
meetings of the committee will be minuted.

ARTICLE 5ROLES AND RESPONSIBILITIES

5.1      The committee will:

(a)      be directly responsible
for:

(i)      the selection of a firm
of external auditors to be proposed for election as the external auditors of the
Corporation,

(ii)      the oversight of the
work of the Corporations external auditors, who will be required to report
directly to the committee,

(iii)      subject to the grant by the
shareholders of the authority to do so, if required, fixing the compensation of
the external auditors of the Corporation, and

(iv)      if deemed appropriate
by the committee, the replacement of the incumbent external auditors;

(b)      consider and oversee the
independence of the external auditors, including:

(i)      reviewing the range of
services provided in the context of all consulting services bought by the
Corporation,

(ii)      requiring receipt by the
committee of an annual formal written statement from the Corporation's external
auditors delineating all relationships between the external auditors and the
Corporation,

(iii)      discussing with the
external auditors any such relationships that may impact the objectivity and
independence of the external auditors, and

(iv)      otherwise taking all
appropriate actions as required to oversee the independence of the external
auditors;

(c)      assure the regular rotation
of the lead audit partner and the concurring partner every five years (with a
five year time-out period after rotation), and the regular rotation of other
audit partners engaged in the annual audit of the Corporation every seven years
(with a two year time-out period after rotation), or as otherwise required by
law or the rules of the AMEX;

(d)      be responsible for the
pre-approval of all audit services and permissible non-audit services to be
provided to the Corporation (or any of its subsidiaries) by the external
auditors, subject to any exceptions provided by applicable laws, including the
Securities Exchange Act of 1934, as amended (the 1934

---

- 4 -

Act), and the rules of the SEC promulgated thereunder,
provided that such pre-approval authority may be delegated by the committee to
any member of the committee who is both independent and unrelated on the
condition that any such pre-approval must be presented to the committee at its
first scheduled meeting following any such approval;

(e)      consult with the
external auditors, senior management, internal auditing staff (if any) of the
Corporation and such other advisers as the committee may deem necessary
regarding their evaluation of the adequacy of the Corporation's internal
controls over financial reporting and disclosure controls and procedures (as
such terms are defined by the SEC), and make specific recommendations to the
Board in connection therewith;

(f)      be responsible for the
review and oversight of all related-party transactions, as such term is defined
by the rules of the AMEX;

(g)      establish procedures
for:

(i)      the receipt, retention
and treatment of complaints received by the Corporation regarding accounting,
internal accounting controls, or auditing matters, and

(ii)      the confidential,
anonymous submission by employees of the Corporation of concerns regarding
questionable accounting or auditing matters,

and review periodically with
management these procedures and, if appropriate, any significant complaints
received, to the extent required by the 1934 Act, the rules of the SEC or the
AMEX;

(h)      set clear hiring
policies for employees or former employees of the Corporations external
auditors;

(i)      gain an understanding of
whether internal control recommendations made by the external auditors have been
implemented by management;

(j)      gain an understanding of
the current areas of greatest financial risk and whether management is managing
these effectively;

(k)      review the Corporations
strategic and financing plans to assist the Boards understanding of the
underlying financial risks and the financing alternatives;

(l)      review managements
plans to access the equity and debt markets and to provide the Board with advice
and commentary thereon;

(m)      review significant
accounting and reporting issues, including recent professional and regulatory
pronouncements, and understand their impact on the Corporations financial
statements;

(n)      review any legal matters
which could significantly impact the financial statements as reported on by the
general counsel and meet with outside counsel whenever deemed appropriate;

(o)      review the annual and
quarterly financial statements, the related management discussion and analysis
and any related news releases and determine whether they are complete and
consistent with the information known to committee members; determine that the
auditors are satisfied that the financial

---

- 5 -

statements have been prepared in accordance with generally
accepted accounting principles, and, if appropriate, recommend to the Board that
the annual and quarterly financial statements, the related management discussion
and analysis and news releases be approved and issued;

(p)      pay particular attention to
complex and/or unusual transactions such as those involving derivative
instruments and consider the adequacy of disclosure thereof;

(q)      focus on judgmental
areas, for example those involving valuation of assets and liabilities and other
commitments and contingencies;

(r)      review audit issues related
to the Corporation's material associated and affiliated companies that may have
a significant impact on the Corporation's equity investment;

(s)      meet with management and
the external auditors to review the annual financial statements, the results of
the annual audit and any recommendations by the auditors in connection
therewith;

(t)      assess the fairness of
the interim financial statements and disclosures, and obtain explanations from
management on whether:

(i)      actual financial results
for the interim period varied significantly from budgeted or projected
results,

(ii)      generally accepted
accounting principles have been consistently applied,

(iii)      there are any actual or
proposed changes in accounting or financial reporting practices,

(iv)      there are any
significant or unusual events or transactions which require disclosure and, if
so, consider the adequacy of that disclosure;

(u)      review, prior to the
commencement of each annual audit:

(i)      the external auditors'
proposed audit plan (including the scope, focus areas, timing and key decisions,
and general approach underlying the audit plan) and ensure no unjustifiable
restriction or limitations have been placed on the scope thereof, and

(ii)      the appropriateness and
reasonableness of the proposed audit fee;

(v)      meet separately with the
external auditors to discuss any matters that the committee or auditors believe
should be discussed privately, including the results of the external auditors
review of the adequacy and effectiveness of the Corporations accounting and
financial controls;

(w)      endeavour to cause the
receipt and discussion, on a timely basis, of any significant findings and
recommendations made by the external auditors;

(x)      obtain regular updates from
management and the company's legal counsel regarding compliance matters, as well
as certificates from the Chief Financial Officer as to required statutory
payments and bank covenant compliance and from senior operating personnel as to
permit compliance;

(y)      ensure that the Board is
aware of matters which may significantly impact the financial condition or
affairs of the business of the Corporation;

---

- 6 -

(z)      if necessary, institute
special investigations and, if appropriate, hire special counsel or experts to
assist in any such investigations;

(aa)      review and assess the
adequacy of this charter, on an annual basis, and provide any suggested
amendments or updates to the Board for review and approval;

(bb)      work with the Board to
determine an appropriate annual budget for the committee and its required
activities, including but not limited to the compensation of the external
auditors and any outside counsel or other experts retained by the committee;
and

(cc)      generally, perform
other functions as may be requested from time to time by the Board.



Adopted May 20, 2006

---